Solar

EIA: Solar and wind to lead U.S. generation growth for next two years

EIA: Solar and wind to lead U.S. generation growth for next two years
A portion of the Eleven Mile Solar Center under construction. (Courtesy: Ørsted)

In its latest Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that wind and solar energy will lead the growth in U.S. power generation for the next two years.

As a result of new solar projects coming online this year, the EIA forecasts that U.S. solar power generation will grow 75% from 163 billion kWh in 2023 to 286 billion kWh in 2025. The administration expects that wind power generation will grow 11% from 430 billion kWh in 2023 to 476 billion kWh in 2025.

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), January 2024

In 2023, the U.S. electric power sector produced 4,017 billion kWh of electric power. Renewable sources—wind, solar, hydro, biomass, and geothermal—accounted for 22% of generation, or 874 billion kWh, last year, the EIA said. Annual renewable power generation surpassed nuclear generation for the first time in 2021 and coal generation for the first time in 2022.

In contrast to the growing generation from renewables, the EIA forecasts that coal power generation will decline 18% from 665 billion kWh in 2023 to 548 billion kWh in 2025. Additionally, it forecasts natural gas will continue to be the largest source of U.S. electricity generation, with about 1,700 billion kWh of annual generation in 2024 and 2025, similar to last year. It expects nuclear power generation will stay relatively flat, rising from 776 billion kWh in 2023 to 797 billion kWh in 2025.

Data source: U.S. Energy Information Administration, Short-Term Energy Outlook (STEO), January 2024

The EIA says new installations of generating capacity support the increase in its renewable generation forecast. Wind and solar developers often bring their projects online at the end of the calendar year, and the new capacity tends to affect generation growth trends for the following year.

Solar is the fastest-growing renewable source because of the larger capacity additions and favorable tax credits policies, EIA said. Planned solar projects increase solar capacity operated by the electric power sector 38% from 95 GW at the end of 2023 to 131 GW by the end of 2024. It expects wind capacity to stay relatively flat at 156 GW by the end of 2024, compared with 149 GW in December 2023.

Late last year, the EIA estimated the U.S. energy sector emitted about 4,790 million metric tons of carbon dioxide (CO2) in 2023, a 3% decrease from 2022, with much of the decline resulting from lower electricity generation from coal-fired power plants due to higher generation from renewable sources such as solar power, the EIA said.

The EIA expected this trend to continue into 2024, with CO2 emissions declining 1% relative to 2023.

Additionally, the EIA forecasts solar power as the fastest-growing generation source and the largest source of new generation in 2023, as noted in a review by the SUN DAY Campaign, a non-profit research and educational organization.

Solar grew by 14.3%, compared to the same period in 2022 – more than any other energy source. This was driven in large part by growth in “estimated” small-scale (e.g., rooftop) solar PV, whose output increased by 19.8% and accounted for nearly a third (30.8%) of total solar production, SUN DAY Campaign said. For the nine-month period, solar was 5.8% of total U.S. electrical generation. A year earlier, solar’s share was 5.0%

The forecast reduction in CO2 emissions is largely due to lower power generation from coal-fired power plants, the EIA said, which it expects to contribute to an 18% decline in coal-related CO2 emissions in 2023 and a 5% decline in 2024. The electric power sector has been retiring significant coal-fired generating capacity in response to economic competition from natural gas and new renewable generating capacity.