In the first four months of this year, fossil fuels have almost disappeared as a source of new US power generation, with solar energy taking a dominant role, driven by federal climate law incentives under President Joe Biden.
According to the Federal Energy Regulatory Commission (FERC), new natural gas installations totaled just 67 megawatts compared to 5.1 gigawatts during the same period last year. Despite natural gas comprising 43.5% of the country’s 1.3 terawatts of installed generation capacity, solar installations soared to 7.9 gigawatts, accounting for 80.6% of new capacity, up from the previous year’s 3.8 gigawatts. Wind power added 1.8 gigawatts, down from 2 gigawatts the previous year, with other sources contributing 12 megawatts.
The increase in solar energy and the decline in new gas projects are largely due to Biden’s federal climate law incentives, aiming for a carbon-free power grid by 2035. This shift has sparked controversy, particularly in energy-rich states like Texas, which rely on both fossil fuels and renewables. Last November, Texas voters approved a $10 billion energy fund to support new natural gas power plants and other grid improvements.
The Department of Energy forecasts that natural gas will continue to be a power source beyond 2035, but it will serve as a backup for renewables with carbon capture and storage, provided the technology becomes cost-effective.
As of April 30, the US had 564.5 gigawatts of natural gas capacity installed, more than double that of coal at 204.5 gigawatts, followed by 152.5 gigawatts of wind, 111 gigawatts of solar, 104.3 gigawatts of nuclear, and 101.5 gigawatts of hydro. Other sources include biomass, fuel oil, and geothermal energy.
Solar energy’s rapid growth is fueled by the 2022 climate law, offering significant tax credits and flexibility, making it more cost-effective than natural gas in many areas. According to Wood Mackenzie, the cost of new solar with storage is between $40 and $60 per megawatt-hour, compared to $70 to $95 per megawatt-hour for new natural gas combined cycle, and $115 to $125 per megawatt-hour for combined cycle with carbon capture.
FERC forecasts that solar will see net high probability additions of 88.1 gigawatts between May this year and April 2027, more than three times the 23.8 gigawatts expected for wind, the second-fastest-growing resource. Growth is projected for 554 megawatts of hydropower, 400 megawatts of geothermal, and 88 megawatts of biomass. In contrast, no new nuclear capacity is anticipated, and coal, natural gas, and oil capacities are expected to decline by 20.2 gigawatts, 3.8 gigawatts, and 2 gigawatts, respectively.
If these forecasts hold, by May 1, 2027, solar will account for over one-seventh of the nation’s installed utility-scale generating capacity, surpassing both coal (13.33%) and wind (12.75%).
