Power plant developers and operators expect to add 85 GW of new generating capacity to the U.S. power grid from 2022 to 2023, 60% (51 GW) of which will be made up of solar power and battery storage projects, according to data reported in U.S. Energy Information Administration’s (EIA) Preliminary Monthly Electric Generator Inventory. Many projects combine these technologies.
The United States saw a significant increase in battery storage capacity and renewable capacity between 2021 and 2022, partly due to tax credits, but also because of falling technology costs, particularly for batteries. Depending on the configuration of the battery storage unit and the charging source, both solar power or battery storage units may qualify for the solar investment credit (ITC), which will be phased down by 2024.
Three states will account for more than half of the 51 gigawatts of solar and battery storage capacity that is planned within the next two-years. Texas will host 12 GW (23%), which is the largest. The next largest, 11 GW (21%), is in California. New York will have 4 GW (7%)
48% of the planned capacity for the United States in the next two-years will be attributable to utility-scale solar. This is 41 GW. Between 2020 and 2021, more utility-scale solar photovoltaic capacity (24 GW) was added to the U.S. grid than natural gas (12. GW), a trend that will likely continue in the coming years as the demand for sun power grows.
Power plant operators and developers expect to add 22 gigawatts of solar capacity to the grid in 2022. This is significantly more than the 13 gigawatts added in 2021. Due to falling solar technology costs, large additions to utility-scale solar capacity will continue. Also, the 2020 extension to the solar ITC (which extended credit to 26% in 2021, 2022, 22% 2023, and 10% 2024, respectively) is likely to continue.
In the next two decades, power plant operators and developers will add 10 GW to their battery storage capacity. More than 60% will be paired together with solar facilities. In the United States, there was a 200% increase in battery storage capacity to 3.1GW in 2021. Battery storage has seen an increase in popularity due to lower costs and economic benefits when it is used with renewable energy (predominantly, wind and solar PV).
The remaining 34 GW of capacity additions planned for the next two-years will largely be from natural gas (16GW) and wind (15GW). The amount of wind capacity planned has fallen by almost half compared with the previous two year, when 29 GW of new capacity was added.