Solar Capacity On The Rise
The addition of new solar capacity is a major driver of our US electricity generation forecast for the next two years. In its latest Short-Term Energy Outlook, the US Energy Information Administration (EIA) expects solar will be the leading source of growth in generation by the electric power sector, as 36 GW of new capacity come online in 2024 and 43 GW in 2025. US solar generation grows from 163 billion kWh in 2023 to 230 billion kWh in 2024 and 286 billion kWh in 2025. The new capacity will boost the solar share of total generation to 6% in 2024 and 7% in 2025, up from 4% in 2023. Wind generation also grows in the forecast, increasing by 30 billion kWh in 2024 and 17 billion kWh in 2025. Wind’s share of total generation reaches 12% in 2025, up from 11% last year. Battery storage that helps smooth the variable nature of solar and wind generation rises by 14 GW (80%) in 2024 and by 9 GW (29%) in 2025, to reach an installed capacity of 40 GW by the end of the forecast.
When the resources are available, solar and wind plants are almost always called on to generate electricity because they do not incur fuel costs like coal and natural gas. Increased renewable generation in the forecast will mostly affect coal-fired generation, which the EIA expects will fall by 9% in 2024 and 10% in 2025.
