EIA report: Solar power and Battery Storage accounting for 62% of new Generation in 2022 and 2023

Dec. 30, 2021
More than 60% of battery storage capacity to be combined with solar facilities

The U.S. Energy Information Administration recently released its Electric Monthly Update, which predicts solar power and battery storage is likely to account for 62% (49 GW) of the 78 GW of new generating capacity added to the power grid in 2022 and 2023. The EIA has made this estimation based on data for October 2021.

Utility-scale solar is expected to account for 49% (38 GW) of the total installed capacity, continuing the trend since 2020, during which period utility-scale solar photovoltaic added more capacity (19 GW) to the grid than natural gas (11 GW). Specifically, solar is expected to add 21 GW of solar to the grid, up from an estimated 16 GW added to the grid in 2021. The rise in solar installations is attributed to the declining costs of solar technology and the extension of the Solar Investment Tax Credit (ITC).

Battery storage capacity is expected to add 10 GW in 2022 and 2023 and more than 60% of the capacity will be combined with solar facilities. In 2021, battery storage capacity is expected to grow by 300%, adding 4.5 GW to the grid. The expansion of battery storage is driven by the declining costs of battery storage, favourable economics when combined with renewable energy and value-added additions in regional transmission organization (RTO) markets.

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Wind and solar is expected to together add about three times more new generating capacity than natural gas in 2022 and 2023. Wind capacity addition is expected to decline from the prior two years to 11 GW. Meanwhile, natural gas is expected to add 16 GW.

California, Texas and New York are expected to account for more than 52% of the 49 GW of U.S. solar power and battery storage capacity that will be added in the next two years. California has the largest share of 23% (11 GW), followed by Texas at 22% (10 GW), and New York at 8% (4 GW).

Solar and battery storage resources will be eligible for Investment Tax Credit depending on the configuration and charging source.