Will solar and wind energy lead the growth in US power generation?

Solar and wind energy will lead the growth in U.S. power generation for at least the next two years, according to EIA estimates. This report uses data from the EIA to analyze solar and wind capacity and generation over the past decade (2014 to 2023) in all 50 states and the District of Columbia.

How do wind and solar energy sources affect the value of electricity?

The value of electricity generated from wind and solar sources declines as supply increases. This decline in value has varied over time and across regions, indicating that strategies to mitigate value decline will need to be carefully targeted.

What causes wind and solar value decline?

We evaluate the causes of wind and solar value decline, calculated from energy and capacity potential revenues at plants across the US. We show that the dominant cause of value decline (output profile, transmission congestion, or curtailment) varies between wind and solar, and by region.

Does congestion affect the capacity market for wind and solar?

In most regions, value differences in the capacity market for both wind and solar were sensitive to the output profile of the plants, but not to congestion or curtailment. One exception was in NYISO, where congestion reduced the capacity value for both wind and solar.

How has wind capacity changed over the last decade?

The U.S. added more than 83 GW of wind capacity during the last decade — an increase of around 130%. This means that wind capacity more than doubled from 2014 to 2023 (Figure 6). The amount of electricity produced from wind increased at a similar rate.

How do wind and solar value differences affect capacity markets?

Wind and solar value differences in capacity markets are dependent on the market rules defined by each ISO. In ERCOT, for example, there is no capacity market, as scarcity pricing in the energy markets is used to provide incentives for the maintenance of sufficient capacity.