BCSE and BloombergNEF claim solar PV was the leading renewable energy technology in the US in 2024
Strong demand from corporates and utilities makes it one of the cheapest sources of new bulk generation in the country, even without tax credits
The government must look into tackling the slow permitting process for infrastructure projects that the report writers see as the key obstacle to energy deployment here
Renewable energy sources met a record volume of the US energy demand in 2024 as these were the 2nd largest source of power generation supplying 1,063 TWh, next to natural gas’ 1,885 TWh. This growth among renewables was led by solar PV which added a record 49 GW to the grid, including 39.6 GW of utility-scale PV and 10 GW of distributed rooftop generation capacity, compared to 35 GW in the previous year.
In comparison, the US commissioned only 5 GW of wind capacity last year compared to 7 GW in 2023, while expanding its battery energy storage systems (BESS) capacity by 55% year-on-year (YoY) with 11.9 GW.
Solar PV capacity, along with other renewables, expanded despite the challenges around high costs of debt, constraints in site permitting, and grid connection bottlenecks, according to the latest annual edition of the Sustainable Energy in America handbook. The handbook is prepared by the Business Council for Sustainable Energy (BCSE) and Bloomberg New Energy Finance (BloombergNEF).
Renewables, led by record levels of solar capacity additions, accounted for 24% of the power generation in the US. According to the handbook, even without tax credits, solar PV is one of the cheapest sources of new bulk generation in the country now, thanks to strong demand from utilities and corporates.
The volume of corporate power purchase agreements (PPA) also set a record with a 66% YoY jump from 16.8 GW in 2023 to 28 GW in 2024. Solar was the preferred technology as corporates contracted 22.3 GW of PV capacity last year, followed by 4 GW of wind among other technologies.
Technology companies led the corporate procurement drive last year, accounting for 84% of all the deals struck at 22.1 GW. Solar dominated the deals with 80% or 22.3 GW of all transactions related to this technology.
The handbook lists Amazon as the largest offtaker with 5.95 GW capacity, split into 4.7 GW of solar and 1.25 GW of wind. Meta, Google and Microsoft, along with Amazon, were jointly responsible for 19 GW or 68% of the total corporate PPA activity.
“Amid growing expectations of AI data center demand, and consequent electricity demand, these companies have been purchasing clean energy at record rates to both meet future demand and stay on top of their sustainability targets,” observe the analysts, who added that corporates are also investing in new nuclear projects as they seek clean firm capacity.
Investment in clean energy generation capacity continues to climb the charts thanks to the focus on decarbonization. Out of more than $2 trillion spent globally, the US invested $338 billion, growing 0.8% YoY including renewable energy, electric vehicles (EV), and power grid investment.
The levelized cost of electricity (LCOE) for most power-generating technologies rose in 2023, with costs associated with PV tracking projects seeing the largest increase (30%) from H2 2022. Despite the fall in module prices, the LCOE of fixed-axis solar went up by a benchmark 27% YoY to $63/MWh during H2 2023 due to higher interest rates and hardware costs.
Analysts cite a slow permitting process for infrastructure projects as the key obstacle to energy deployment.
“Moving forward, the United States can capitalize on this momentum through smart policy and regulatory reforms, such as maintaining federal energy tax credits, enacting permitting reform, and continuing investment in innovation through RDD&D initiatives. These policies will catalyze private sector dollars and unlock further American energy prosperity,” said BCSE President Lisa Jacobson.
The complete handbook is available for free download on BCSE’s website.
Going forward, the US Energy Information Administration (EIA) forecasts 63 GW of new utility-scale electricity generation capacity to be added to the grid in 2025, representing a 30% YoY increase over the 48.6 GW in 2024. Solar and battery storage are expected to account for 81% of this capacity.
According to the EIA, utility-scale solar additions in 2024 totaled a record 30 GW, accounting for 61% of capacity additions. In 2025, it is likely to bring online another 32.5 GW capacity accounting for 52% of new capacity, including 11.6 GW in Texas, and 2.9 GW in California.