U.S. Construction Costs for Natural Gas-Fired Generators Dropped by 18 Percent in 2021: EIA

The average construction costs of natural gas-fired generators, wind turbines and solar PV systems declined in the U.S. during 2021 relative to 2020, according to an Oct. 3 report by the U.S. Energy Information Administration.  Average construction expenditures declined by 18 percent for gas fired generators, 5 percent for wind turbines and by 6 percent for solar photovoltaic systems during 2021, compared to 2020.

Solar, wind and gas accounted for more than 90 percent of the generation capacity added to the U.S. power grid in 2021. Moreover, investment in new power generating capacity rose by 10 percent in 2021, compared to 2020, reaching $50.8 billion.

Average U.S. solar construction expenditures across all solar panel categories declined by 6 percent to $1,561 per kilowatt (kW) in 2021. The decline in solar construction costs can be directly linked to the 10 percent decrease in the construction expenditure for crystalline silicon tracking panels, which have declined to their lowest average level since 2014 and were valued at $1,423/kW. The average construction costs for solar panels can vary depending on the type. For example, crystalline silicon fixed tilt panels actually increased by 5 percent to $2,047/kW in 2021, compared to the prior year. In contrast, the average expenditure for Cadmium telluride panels declined by 1 percent to $1,626/kW during 2021, relative to 2020.

Average U.S. onshore wind turbine construction costs declined by 5 percent to $1,428/kW in 2021, compared to 2020. The average cost of construction declined for all three wind turbine size groups. For wind farms over 200 megawatts (MW) of capacity, costs fell by 1 percent to $1,382/kW. Wind farms varying from 100-200 megawatts witnessed a 4.4 percent decline to $1,464/kW in average building expenditures. Costs of projects in the size range of 1-100 MW of capacity declined by 22 percent to $1,949/kW.

Average construction expenditures for gas fired production assets declined 18 percent in 2021 compared to 2020. The fall in gas fired generation costs can be directly attributed to a decline in the average cost for combustion turbines, which declined by 19 percent to $512/kW over the same period.