Construction costs for U.S. gas generation fell in 2022, while solar and wind construction costs rose slightly

Nov 06, 2024

Solar, wind and natural gas comprised 86% of the capacity added to the U.S. electric grid in 2022.

The average cost of construction for U.S. natural gas-fired generation in 2022 fell 11% from 2021, while the average construction costs for U.S. solar PV systems and wind turbines rose slightly, according to the U.S. Energy Information Administration (EIA).

Generator cost data are reported to EIA through the EIA-860, Annual Electric Generator Inventory. Average construction costs for solar generators increased by 1.7% in 2022, and for wind turbines they increased by 1.6%, EIA said.

Solar, wind and natural gas comprised 86% of the capacity added to the U.S. electric grid in 2022.

Between 2021 and 2022, EIA said the average construction cost for natural gas-fired generators decreased by 11%, primarily due to a significant drop in costs for combined-cycle facilities. In 2022, the average cost for generators at combined-cycle facilities fell by 42%, reaching $722/kW.

In contrast, costs for other natural gas technologies rose in 2022. The average construction cost for a combustion turbine nearly doubled to $1,006/kW, while costs for natural gas-fueled internal combustion engines increased by 27% to $1,677/kW, the agency said.

The slight increase in solar construction was primarily driven by a 13% increase in the construction cost for crystalline silicon tracking panels, which increased to $1,605/kW, the highest price since 2018. Average overall U.S. solar construction increased to $1,588/kW.

The average construction cost for crystalline silicon fixed-tilt panels decreased by 13%, but they remained the most expensive of the major solar technologies at $1,788/kW, according to EIA. The average cost for Cadmium telluride panels also decreased by about 6% to $1,529/kW in 2022.

More generally, the average cost of U.S. solar construction has fallen in the last decade, as more utility-scale solar capacity has increased.

The average construction cost for U.S. onshore wind turbines increased in 2022 to $1,451/kW. This was driven by increases in construction costs for wind farms greater than 100 MW in nameplate capacity, EIA reported. The cost for wind farms between 100 MW and 200 MW of capacity increased by 10% to $1,614/kW.

In 2022, construction costs for the largest wind farms—those exceeding 200 MW—rose by 1.4%, reaching an average of $1,402/kW. Meanwhile, for wind farms with capacities between 1 MW and 100 MW, construction costs continued to decline, dropping by an average of 7.3% to $1,806/kW.