Dive Brief:
- According to the U.S. Energy Information Administration (EIA), last year the average U.S. wholesale price for solar electricity was $83/MWh — more than double the price paid to producers of electricity generated by wind, fossil fuels, or nuclear.
- The United States' use of renewable energy grew for the fourth consecutive year, to account for 11% of total energy consumption in 2019, according to the agency.
- California's high prices largely skewed the national average — roughly a third of U.S. solar capacity is located in California, where the average wholesale price of electricity is more than double the the national average of $36/MWh.
Dive Insight:
The cost of energy is driven by where and when it is produced — which helped push the price of solar electricity higher in 2019. In California, where the largest share of the nation's solar capacity is located, the average wholesale electricity price across all technologies was $74/MWh in 2019. But the weighted average wholesale solar PV price in California was $100/MWh, about 20% higher than the national average for solar.
"Because California had the most PV capacity in the country, the state’s higher wholesale electricity prices contributed to solar PV’s higher national average price," EIA explained.
Wholesale prices paid to fossil fuel generators averaged $34/MWh across the nation and $43/MWh in California.
Wind wholesale prices "are similarly affected by geography," EIA noted — but wind-powered electricity tends to be generated in markets with relatively lower wholesale electricity prices.
And solar panels only generate electricity in the daytime, the agency added, "when electricity demand and wholesale power prices tend to be higher." Wind turbines, on the other hand, generate electricity whenever the wind blows, and their output tends to peak at night.
EIA said that in 2019 more than half of wind generation occurred at night, "resulting in lower average wholesale prices for wind-powered electricity than solar-powered electricity."
EIA data shows wind farms in Texas, Oklahoma and Kansas collectively produced 45% of total U.S. wind generation in 2019 and in those states the average wholesale wind price was $26/MWh compared with $47/MWh for wind generation in the remaining states.
Wholesale wind prices in Texas, Oklahoma, and Kansas "tend to be lower because their favorable wind resources lower wind generation costs," EIA noted.
Prices for renewable energy are falling, and the United States is consuming more solar and wind than ever before.
Wind energy accounted for about 24% of U.S. renewable energy consumption in 2019, EIA said. The resource passed hydroelectricity as the most prolific source of renewables on an annual basis. Solar energy made up about 9% of U.S. renewable energy consumption last year.
Hydroelectric power accounted for about 22% of the nation's green energy consumption. Biofuels accounted for about 20%, while wood and waste accounted for about 24%.
