For the first time, the nation’s electric grid will see utility-scale solar power grow at a faster rate than wind energy, the Energy Information Administration said in its latest Short-Term Energy Outlook.
The power sector will add about 21 gigawatts of solar capacity this year and an additional 25 GW next year, according to the Jan. 11 report. Small-scale solar will rise by about 5 GW this year and the same amount next year. Residential solar will make up about 70% of that capacity in 2022 and 64% in 2023.
Those solar additions will account for about half of the 46.1 GW of all new utility-scale electric generation, according to EIA’s Preliminary Monthly Electric Generator Inventory released Jan. 10. Natural gas comes in at 21% and wind at 17%.
EIA forecasts that wind energy will grow by 7 GW in 2022 and 4 GW in 2023, a significant drop from the record 17 GW added in 2021 and 14 GW the previous year.
Supply chain issues likely didn’t affect solar buildouts, the report said, but shipping problems as well as the “phasedown of the production tax credit” are partly to blame for slower growth for wind.
As the economy continues to recover from pandemic-related disruptions, electricity use is expected to rise by 0.6% this year and 1.4% in 2023.
“Preliminary data indicate that electricity consumption grew by 2.0% in 2021, and year-over-year growth was fastest in the first half of last year when the economy began to return to pre-pandemic patterns,” according to the report.
EIA predicts that total U.S. retail sales of electricity will remain relatively unchanged in 2022 and grow by 1.4% in 2023. Last year, sales grew by 2.2%, mostly due to higher sales to the commercial and industrial sectors.
Henry Hub natural gas spot prices are expected to average $3.82 per million British thermal units (MMBtu) for the first quarter of 2022, $3.79/MMBtu for all of 2022 and $3.63/MMBtu in 2023. Last year, spot prices averaged $3.91/MMBtu.
“Monthly average prices reached $5.51/MMBtu in October, but they declined in November and December as mild weather prevailed across much of the country, resulting in less natural gas used for space heating,” the report said.