U.S. Reaches 200 GW Clean Power Capacity Milestone, ACP Observes

American Clean Power Association’s (ACP) The Clean Power Quarterly 2021 Q4 Market Report shows the U.S. surpassed more than 200 GW of total operating utility-scale clean power capacity in 2021, but significant policy issues continue to hold back growth for the industry and threaten the country’s ability to meet emissions goals.

“Surpassing over 200 gigawatts of clean energy is a significant milestone for the United States and shows that we can achieve even more with strong public policy support for the industry,” says Heather Zichal, ACP’s CEO. “Although the U.S. has reached this incredible achievement, more needs to be done, at a faster pace, to reach the climate goals and targets our country needs to achieve. We urge Congress to take action to create a clean energy future that will help create more good-paying American jobs and combat the climate crisis.”

During 2021, there was a 3% decline for clean energy installations compared to 2020’s record year. Over 11.4 GW projects, originally scheduled to go online in 2021, have fallen to 2022 or 2023 because of a variety of problems. This was due to trade policies as well as lack of regulatory certainty affecting the availability of solar panel imports into the country. The policy uncertainty faced by the wind sector included the expiration tax credits for wind projects.

The pace of installation fell short of what is needed to reach the net-zero emission goal. While 27.7 GW is the second largest year on record for combined wind, solar and energy storage installations, it is only 45% of what’s required to stay on track for an emissions-free power sector.

The sector’s renewable energy sector has installed 27.7 GW worth of new utility-scale solar, wind, and energy storage capacity between 2021 and the fourth quarter. There were 10,520 MW installed in the fourth quarter. These clean power projects have amounted to $39 billion in sector investments. For 2021, wind power capacity installations totaled 12,747MW. 5,409 MW were brought online in fourth quarter. The solar sector in total installed 12,364MW for the year. This includes 3,937MW added in fourth quarter. In 2021, battery storage installations accounted for 2,599 MW. This was more than the 1,500 MW that were installed in 2020. 1,173MW of battery storage projects came online in the fourth quarter. This is the first quarter that has seen more than 1 GW of new installations.

Over 1,000 clean energy projects are currently under development in the country. This totals 120,171MW of new capacity. This includes 37,802 MW currently under construction and 82.369 MW in advanced developments.

Despite unclear policy headwinds during 2021, U.S. project owner commissioned 606 new project phases in 43 states, including 168 projects within the fourth quarter. Texas (7.352 MW), California (2.697 MW), Oklahoma (1.543 MW), Florida (1.382 MW), and New Mexico (1.374 MW) are the top five states to add new installation in 2021.

Texas (17%), California (11%), New York (7%) and Indiana (5%) are the top five states for clean energy development (in percent of projects under construction/advanced development).

Last year was a record for clean energy procurement with 28 GW signed power purchase agreements (PPAs), in 2021. For context, 28 GW of clean electricity is more than the entire U.S. Federal government’s electricity demand.

There are many factors that drive clean energy growth, including strong consumer demand. For the first time, corporate buyers outnumbered utilities in clean energy procurement. They announced deals for more than 14 GW in 2021. Utilities have signed contracts for more than 10 GW of solar, wind and battery storage.

1,871MW of power purchase agreements were signed by corporate customers during the fourth quarter. Pfizer was the largest corporate offtaker with 310 MW. Meta Platforms (Facebook), with 285 MW, and PepsiCo with 72.5 MW were next.

35% of PPA capacity was announced by utilities in the fourth quarter. There were 19 utility contracts that totaled 1,994MW. Public Service Company of Colorado (350MW), Entergy Louisiana (225MW), and Consumers Energy (225MW) led the 2021 fourth quarter utility PPA announcements.

Solar was the dominant technology used to announce utility PPAs. It was responsible for more than 70% of the new capacity. Despite record demand for power purchase agreements, prices for future projects rose almost 6% in quarter. This was due to supply chain constraints, commodity price hikes, expiring tax credits, trade barriers, and other factors that weighed on project economics. Prices for solar PPAs rose 5.7%, while prices for wind increased 6.1%. According to market data, the average PPA price increased 15.7% over the previous year.

Despite these increases in costs, renewable energy is still one of the most economical ways to produce electricity and reduce carbon pollution. The last ten years have seen significant improvements in clean energy technology. Solar costs have dropped 90% since 2009, while wind costs have fallen 70%.

The full report is available here.