U.S. Energy Information Administration logo
Skip to sub-navigation

Electricity Monthly Update

With Data for October 2021 Release Date: December 23, 2021 Next Release Date: January 26, 2022

Highlights: October 2021

  • Wholesale natural gas prices rose in October compared to the previous month at all selected hubs except Southern California.

  • Electricity system daily peak demand was lower on eight of nine selected electricity systems from September to October.

  • Total U.S. coal stockpiles had a month-over-month increase of 5.5%, reaching 85 million tons in October 2021. However, despite this month-over-month increase, total U.S. coal stockpiles remain at an extremely low historical level.

Key indicators

Solar power and battery storage will likely account for most of the 78 GW of capacity additions in 2022 and 2023

Source: U.S. Energy Information Administration, Preliminary Monthly Electric Generator Inventory, October 2021, .

Note: Data are for utility-scale plants with capacities of 1 megawatt (MW) or greater. Additions denote new capacity additions exclusive of any planned retirements. Data for 2021 are preliminary.

The United States is expected to add 78 gigawatts (GW) of new generating capacity to the power grid from 2022 to 2023, 62% (49 GW) of which will be from solar power and battery storage. Depending on the configuration and charging sources, both solar power and battery storage resources may be eligible for the Investment Tax Credit, slated to phase down by 2024. This trend is consistent with 2021 when the United States started seeing significant deployment of battery storage along with large amounts of renewable capacity.

Utility-scale solar will account for 49% (38 GW) of the total installed capacity expected to be added in the next two years. Utility-scale solar photovoltaic (PV) has added more capacity (19 GW) to the grid than natural gas (11 GW) since 2020, and that trend is expected to continue over the next two years. In 2022, solar is expected to add 21 GW to the grid, significantly more than the 16 GW expected for 2021. Large additions of utility-scale solar capacity are likely to continue because of falling solar technology costs and a 2020 extension of the Solar Investment Tax Credit (ITC), which extended the credit to 26% in 2021 and 2022, 22% in 2023, and 10% in 2024 and thereafter.

Battery storage capacity is expected to add 10 GW in the next two years, and over 60% of this capacity will be paired with solar facilities. In 2020, battery storage grew by 48% when the year-end capacity reached 1.5 GW. In 2021, battery storage capacity will likely grow by 300% when 4.5 GW is added to the grid. Declining cost for battery storage applications, favorable economics when deployed with renewable energy (predominantly wind and solar PV), and value-added additions in regional transmission organization (RTO) markets have helped drive the expansion of battery storage.

Wind capacity additions are expected to be 11 GW, which is a considerable decrease from the prior two years. By comparison, expected capacity additions from natural gas are 16 GW. Wind and solar combined are estimated to add about three times more new generating capacity than natural gas during this time period.

Three states account for more than 52% of the 49 GW of U.S. solar power and battery storage capacity slated to be added in the next two years. California has the largest share at 23% (11 GW), followed by Texas at 22% (10 GW), and New York at 8% (4 GW).