Image: Business Wire
Utility-scale solar and battery energy storage are set to become the dominant new source of energy capacity additions in the United States. Over the next two years, the US Energy Information Administration (EIA) predicts that the two technologies will jointly account for 60% of new capacity added to the US grid.
Of the total 85GW of capacity set to come online through 2023, solar and energy storage represents 51GW. The EIA said that in many cases, solar and storage are paired together in the same projects.
Rapidly falling battery prices and rising demand have driven the increase of energy storage attachment and standalone storage projects. Dependent on charging sources and the configuration of a project, battery energy storage units could be eligible for the solar investment tax credit (ITC), which is another driver of growth. The ITC is set to phase down by 2024. It is scheduled to be 26% in 2022, 22% in 2023, and 10% in 2024 and beyond.
Three US states will dominate the total share of new solar and energy storage capacity. Texas is expected to contribute 23% of new capacity with 12GW, while California will come second with 11GW, and New York will rank third with 4GW.
Utility-scale solar accounts for 48% of planned capacity in the United States over the next two years, said the EIA. The 22GW planned for 2022 is dramatically more than the 13GW added in 2021. In 2020 and 2021, utility-scale solar doubled natural gas, adding 24GW versus 12GW, respectively.
Over the next two years, the EIA expects 10GW of utility-scale battery storage capacity to be added, more than 60% of which will be co-located with solar installations. Roughly 3.1GW of battery storage was deployed in 2021.
The remainder of planned projects over the next two years, about 34GW, will come from natural gas (16GW) and wind (15GW). Wind capacity additions have notably dropped.
The EIA also recently said that it expects US energy use to rise through 2050, as population and economic growth outpace efficiency improvements. The EIA’s annual energy outlook for 2022 projects petroleum and natural gas will remain the highest sources of energy consumption through 2050, with transportation being the greatest contributor to fuel use.