Construction Cost for Solar Projects Fell by 50% in the US During 2013-18

The latest report published the U.S. Energy Information Administration (EIA) shows that the annual capacity-weighted average construction cost for solar and onshore wind decreased considerably between 2013 and 2018.

Natural gas generation costs also decreased slightly in 2018.

Construction Cost for Solar Projects Fell by 50% in the US During 2013-18

Between 2013 and 2018, the construction costs for solar, wind, and natural gas-based power projects fell by 50%, 27%, and 13%. These three power generation technologies accounted for more than 98% of the total capacity added to the electricity grid in the United States in 2018.

The average construction cost for PV generators is higher than wind and natural gas generators on a dollar-per-kilowatt basis. However, the gap is narrowing as the cost of solar falls rapidly.


Between 2017 and 2018, the average construction cost of solar in the United States fell 21% to $1,848/kW. The decline was induced by falling prices of crystalline silicon fixed-tilt panels, which were at their lowest average construction cost of $1,767/kW in 2018.

Crystalline silicon fixed-tilt panels accounted for more than one-third of the solar capacity added in the United States in 2018, at 1.7 GW. These panels had the second-highest share of solar capacity additions by technology.

Crystalline silicon axis-based tracking panels had the highest share, with 2.0 GW (41% of total solar capacity additions) of added capacity at an average of $1,834/kW.

Construction Cost for Solar Projects Fell by 50% in the US During 2013-18

The total wind capacity additions increased by 18% between 2017 and 2018 as the average construction cost of wind projects dropped by 16% to $1,382/kW. All wind project size classes had lower average construction costs in 2018.

The largest decreases were seen at wind farms with 1 MW to 25 MW of capacity where the costs decreased by 22.6% to $1,790/kW.

Construction Cost for Solar Projects Fell by 50% in the US During 2013-18

Natural gas received the most investment in 2018, accounting for 46% of total capacity additions for all energy sources.

The United States installed 3.6 GW of new solar capacity in the first quarter of 2020, according to the latest report published by the Solar energy Industries Association and Wood Mackenzie. This is the largest Q1 number in terms of installations for the country, with a 42% increase year-over-year.

Meanwhile, in the wake of the coronavirus outbreak, the Treasury Department and the Internal Revenue Service of the United States of America announced tax relief for those who have installed renewable energy projects. This relief would apply to renewable projects using sources such as solar, wind, biomass, geothermal, landfill gas, trash, and hydropower, fuel cells, microturbines, and combined heat and power systems.

Image Credit: Rocky Mountain Power