Solar Power Over 50% of US Power Capacity Growth in Next 3 Years

The US Federal Energy Regulatory Commission (FERC) expects that slightly more than 50% of new US power capacity in the next 3 years will come from solar power — and that’s just considering large-scale solar power projects, not small-scale/rooftop solar power installations.

According to FERC’s January 2021 to December 2023 forecast for power capacity additions, which is based on data from ABB’s Velocity Suite and The C Three Group, slightly more than 50% of new capacity is expected to come from solar power, 27% from wind power, 17% from natural gas, not quite 4% from hydropower, and a little more than 1% from nuclear power.

Those figures concern capacity additions, but not net change. Looking at expected retirements, coal is expected to see 24,024 megawatts (MW) of capacity retirements in this 3 year period, or 54% of all capacity retirements. Natural gas is expected to represent another 20% of capacity retirements, nuclear 15%, and oil 10%. Taking these retirements into account, the net change in market share is even larger for renewables than indicated by capacity additions alone.

Using the figures for expected net change and total installed capacity at the end of 2020, I then create a comparison of the latter (total installed capacity at the end of 2020) with expected total installed capacity at the end of 2023.

However, there is one more matter to roll in to consider electricity generation — capacity factor. Using 2019 capacity factors, the final chart in this article will adjust that installed capacity chart to make it relative to capacity factor. (Thanks to one of our readers, Matt, for pushing for this.) Let’s get to the fun!

The following chart shows expected capacity additions in the next 3 years in the United States:

This second chart shows expected capacity retirements by generation source:

This third chart shows expected net change in capacity in the next 3 years (capacity additions minus capacity retirements):

This fourth chart shows total installed capacity by source at the end of 2020 versus total expected capacity by source at the end of 2023:

Here’s an interactive version of that chart as well (just note that it may not show well on mobile devices):

As you can see, natural gas continues to grow and remains the top source of power capacity, coal continues its decline (but not as dramatically as hoped), wind power capacity explodes, and solar power capacity explodes even more.

This fifth and final chart comes from multiplying total capacity at the end of 2020 and expected capacity at the end of 2023 by 2019 capacity factors for each energy source:

Here’s an interactive version of that chart as well (just note that it may not show well on mobile devices):

As you can see, relatively speaking, the results are similar, but wind power does retain a somewhat higher influence than solar power in this scenario at the end of 2023 — whereas, simply looking at capacity without considering capacity factor, solar power inched its way above wind power.

Overall, looking more closely at the figures in this last comparison, solar power grows from 2.5% of the market to 8.4%; wind power grows from 8% to 11.7%; hydropower drops from 7.6% to 7.3%; nuclear power drops from 18.6% to 16%; natural gas drops from 38.9% to 37%; and coal drops from 21.7% to 17.2%.

Naturally, one important thing to note is that 2020 and 2023 capacity factors may not match 2019 capacity factors very closely. If fossil fuel power plants are used less and less, their capacity factors could drop. Similarly, if renewable energy technologies get better and better, their capacity factors may improve.

Any thoughts on these expected trends?

Naturally, adding in rooftop solar power would make the story look considerably better for solar power. Rooftop solar has gotten increasingly competitive year after year, and it is currently a very appealing product from a purely financial point of view. For more on this, see:




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