Utility-Scale Solar CapEx Trends – Berkeley Lab Report Analysis Part 2

As utility-scale solar reshapes the energy landscape, understanding its evolving costs remains crucial for industry decision-makers. HeatSpring instructor Tim Taylor examines Berkeley Lab’s latest “Utility-Scale Solar, 2024 Edition” report, uncovering notable trends in installed CapEx – including some findings that diverge from other market analyses.

In this second installment of our video series, Tim breaks down the shifting cost dynamics and explores how the choice between fixed-tilt and tracking systems impacts deployment strategies.

Click here to check out Breaking Down Berkeley Lab’s Annual Utility-Scale Solar Report – Part 1.

Hey everyone, Tim Taylor here again. In a previous video, I reported on the growth in utility-scale solar as described in a Berkeley Lab report released around the end of October. Berkeley Lab is a great resource on utility-scale solar. Because it’s a U.S. government lab, all their reports and data are publicly available. Go to their website if you want to get more details about the summary of points in this video.  

Let’s look at the installed CapEx costs for utility-scale solar. This graph shows the cost has declined over the last 13 years. This graph is showing the different projects for which data has been made available and the size of the circles is representative of the capacity of the projects. The solid line is the capacity weighted mean. 

Now, keep in mind that Berkeley Lab gets their data from a number of sources, including FERC Form 1, state regulatory filings, and EIA 860 (which is actually confidential, but Berkeley obtains the data with a non-disclosure agreement).

These are capacity weighted costs representing the average cost of the capacity, and it’s only for projects greater than 5 MWs.  

Some key points… 

The cost from 2022 to 2023  dropped from $1.56/W AC to $1.43/W AC, and that is an 8% decrease. The data that Berkeley Lab has compiled with respect to 2022 and 2023 is different than other industry sources, which have actually reported some cost increases in real dollar terms. 

For those of you that think in terms of DC watts, $1.43/W AC is equivalent to $1.08/W DC. That’s according to how Berkeley Lab calculates that. 

Since 2010, costs for installed utility-scale solar have fallen by 75%.  That’s a key reason why we are seeing that the dominant source of new generation on the system is solar PV. 

Another key point that I found very relevant in the Berkeley Lab report was the comparison of fixed tilt versus tracking CapEx cost. As you can see by these two curves here, there is roughly the same order of magnitude reduction for both fixed tilt and tracking. As Berkeley Lab found, 96% of all new capacity uses trackers.

Fixed tilt runs about $1.20/W AC, while tracking is running about $1.40/W AC. That’s about 17% greater than fixed tilt. 

Of course, the increased production from tracking projects justifies the higher capital costs and potentially higher O&M costs associated with tracking. Other data compiled by Berkeley Lab shows that tracking increases capacity factors, approximately 5% in high solar insolation regions. 

That’s it for this video. I’ll be talking about a few other key aspects of this report in future videos. To learn more about transmission interconnections, scan the QR code here or head over to Heatspring. Thank you for watching.