Is Solar Or Wind Growing Faster?

In recent years, solar and wind power have experienced rapid growth around the world. These renewable energy sources are seeing increasing deployment as countries seek to reduce greenhouse gas emissions and transition away from fossil fuels. Based on current trends, wind and solar are expected to continue expanding their share of the global electricity mix in the coming decades.

This article provides an in-depth comparison of the growth trajectories for solar photovoltaic (PV) and wind power. It analyzes capacity additions, cost declines, policy support, grid integration challenges, and future projections for both technologies. By evaluating the key factors driving deployment, we can better understand the outlook for these two pillars of the clean energy transition.

Solar Power Growth

Solar power capacity in the United States has seen rapid growth in recent years. According to Statista, annual solar PV installations grew from 2,072 MW in 2010 to 23,624 MW in 2021.^[1] In 2022, the U.S. added 19,559 MW of solar capacity, bringing the cumulative installed capacity to over 122 GW.^[2] This growth has been driven by declining costs and supportive government policies like tax credits and renewable portfolio standards. The Solar Energy Industries Association projects the U.S. will install 174 GW of new solar capacity by 2025, more than doubling the current capacity.

Wind Power Growth

Wind power capacity has grown substantially worldwide in recent years. According to the International Renewable Energy Agency (IRENA), wind power capacity additions reached 54 GW in 2017, bringing total installed capacity to over 539 GW globally. The majority of the growth occurred in Asia, especially China. Europe and North America also saw steady capacity additions (IRENA, 2018).

Overall, global wind power capacity has grown at an average annual rate of over 17% since 2000. The most growth occurred between 2008-2012, when annual capacity additions exceeded 40 GW per year. Growth rates have moderated slightly in recent years as markets mature, but wind power remains one of the fastest growing sources of renewable energy worldwide (IRENA, 2018).

Government Policy

Government incentives have played a major role in the growth of both solar and wind energy. Historically, wind energy has received more federal tax incentives than solar. The wind industry benefited from the federal production tax credit (PTC), which provided wind facilities with a tax credit per kilowatt-hour of electricity generated. This incentive helped drive substantial growth in wind power generation over the past two decades. According to Columbia University’s Center on Global Energy Policy, the PTC has provided an estimated 60% of the wholesale value of wind power since 2000 (1).

The solar industry has relied more heavily on the investment tax credit (ITC), which provides a percentage-based credit for capital expenditures on solar installations. The ITC has helped spur massive growth in solar generation capacity over the past decade. However, research shows that tax incentives for wind and solar primarily benefit large banks and corporations rather than supporting a true energy transition (2). On a per-MWh basis, wind and solar receive over $50 in subsidies, far higher than fossil fuels (1).

Cost Declines

The costs of both solar and wind power have declined substantially in recent years. According to a 2017 report by IRENA, solar PV module prices decreased by 80% between 2009 and 2016, while the LCOE from utility-scale solar PV fell by 73% over the same period.[1] Onshore wind turbine prices also declined substantially, with the LCOE from new wind projects falling by about 23% between 2010 and 2016.[1]

An analysis by Our World in Data found that between 2009 and 2019, the costs of utility-scale solar declined by 89%, while onshore wind declined by 70%.[2] Both solar and wind are now cheaper than fossil fuels in most of the world. The key drivers behind these cost declines have been economies of scale, technological improvements, and competitive procurement practices.

While costs have fallen dramatically for both technologies, some analyses suggest solar has seen slightly faster cost declines in recent years. According to Forbes, utility-scale solar costs fell by 89% between 2009 and 2019, compared to a 70% decline for onshore wind over the same period.[3] However, wind and solar costs are now so low, that small differences in relative cost declines have less impact on growth and competitiveness.

Grid Integration

Integrating more solar and wind energy onto power grids can pose challenges due to the variable and uncertain nature of these renewable sources compared to traditional generation like coal and natural gas (https://greeningthegrid.org/Grid-Integration-Toolkit/quick-reads). The main issues are variability, uncertainty, location constraints, and non-dispatchability (https://www.vox.com/2015/6/19/8808545/wind-solar-grid-integration).

However, there are solutions to overcome these integration challenges. grid operators can forecast wind and solar output to plan ahead, use demand response to shift load, utilize energy storage, increase transmission connections, and implement advanced power electronics and smart inverter technology. Synthetic inertia and fast frequency response can also help stabilize the grid with high renewable penetration. The challenges require an evolution of grid management and market practices but integrating high shares of renewables is technically feasible (https://core.ac.uk/download/pdf/70609781.pdf).

Projected Growth

Both solar and wind power capacity are expected to see significant growth in the coming years. According to the U.S. Energy Information Administration (EIA), utility-scale solar power capacity is forecast to grow from 14 GW in 2020 to 44 GW in 2025, an increase of 214%. Wind power capacity is projected to reach 153 GW in 2025, up 32% from 2020 levels.

A report from the Solar Energy Industries Association and Wood Mackenzie predicts that over the next 5 years, annual U.S. solar PV installations will more than double, with annual installations reaching 20 GW in 2025. This is driven by strong demand from utilities and corporates signing power purchase agreements for large solar projects.

The American Wind Energy Association forecasts wind capacity additions averaging over 17 GW per year from 2022 to 2025 as more than 50 GW of new wind projects are under construction or in advanced development. Supportive policies like production tax credits have helped drive continued wind growth.

While solar is growing from a smaller base, wind energy currently accounts for a larger share of renewable generation in the U.S. The outlook is for both technologies to significantly expand their capacity, playing important roles in the transition to clean energy.

(Sources: https://www.ercot.com/files/docs/2011/04/22/04___aws_john_zack_ercot_workshop_25apr11.pdf, https://www.eia.gov/electricity/generatorcosts/)

Key Factors

There are several key factors that are driving the growth of solar and wind power. For solar power, the dramatic decrease in costs is a major factor. According to this study, the average utility-scale PV system cost fell 89% between 2009 and 2020. Government incentives like tax credits have also fueled growth in solar adoption. At the consumer level, solar panels have become much more affordable and accessible in recent years.

When it comes to wind power, larger turbines able to generate more electricity have driven down the cost and increased efficiency. According to the Department of Energy, the average turbine generating capacity has increased dramatically in recent decades. Government policies like state renewable portfolio standards have also boosted wind power growth. Wind energy potential is highest in certain geographic regions, so the quality of wind resources plays a role as well.

In summary, the growth of both solar and wind has been propelled by plummeting costs, supportive government policies, and technological advances. However, unique factors like solar panel accessibility for homeowners and geographic constraints for wind also impact their growth trajectories.

Conclusion

Based on the analysis in this article, it appears that solar power capacity is growing at a faster rate than wind power globally. Though wind power saw impressive growth in the early 2000s, solar power capacity has expanded rapidly in the last decade. In 2021 alone, solar power capacity increased 23% while wind increased 12%.

There are a few key reasons that help explain why solar is seeing faster growth: dramatic cost declines in solar panel production, favorable government policies like tax credits, and the modular nature of solar which makes adoption easy. Utilities are finding solar power integration into the grid more seamless as well. This has paved the way for larger solar installations across the world.

Though wind power is still an important renewable source and will continue expanding, the evidence points to solar power seeing the fastest growth in upcoming years. As solar panel technology continues improving and costs keep decreasing, we can expect strong increases in solar power capacity.

References

[1] International Energy Agency (IEA). Renewables 2019 Report. https://www.iea.org/reports/renewables-2019

[2] International Renewable Energy Agency (IRENA). Renewable Power Generation Costs in 2019 report. https://www.irena.org/publications/2020/Jun/Renewable-Power-Costs-in-2019

[3] U.S. Energy Information Administration (EIA). Electric Power Monthly Report (February 2020). https://www.eia.gov/electricity/monthly/

[4] American Wind Energy Association (AWEA). U.S. Wind Industry Annual Market Report Year Ending 2019. https://www.awea.org/resources/publications-and-reports/market-reports/2020-u-s-wind-industry-market-reports

[5] Solar Energy Industries Association (SEIA). Solar Industry Research Data. https://www.seia.org/solar-industry-research-data