Interconnection costs for solar and battery storage projects tend to be higher than for many fossil fuel projects but generally lower than or comparable to onshore wind projects, with significant variation depending on project status, location, and technology type.
Comparison of Interconnection Costs by Technology
- Onshore Wind: Typically faces the highest interconnection costs among renewable resources. For example, in ISO-New England (ISO-NE), onshore wind interconnection costs average around $909/kW, making it the costliest to interconnect.
- Solar: Solar interconnection costs are generally lower than onshore wind but still substantial. In ISO-NE, average solar interconnection costs are about $450/kW, which has doubled in recent years compared to earlier periods. In other regions such as PJM, costs range broadly but average around $240-$335/kW, with recent trends showing increases leading to some project withdrawals.
- Battery Storage: Battery storage projects tend to have interconnection costs lower than solar and significantly less than wind. For instance, ISO-NE data shows storage at approximately $230/kW, while in PJM it averaged around $335/kW from 2017-2022, still much higher than natural gas but lower than solar or wind in many cases.
- Natural Gas and Other Fossil Fuels: These projects usually have the lowest interconnection costs. Natural gas projects averaged $91/kW in ISO-NE and as low as $24/kW in PJM, substantially less than renewable projects.
Influence of Project Status and Trends
- Projects that have withdrawn from the interconnection process often face significantly higher costs. Withdrawn solar projects reported costs as high as $394/kW, and withdrawn projects in general can have interconnection costs constituting 30-37% of total project costs, compared to just 6-8% for completed solar and wind projects.
- Overall, interconnection costs have been rising over time, notably for projects that eventually withdraw, indicating increasing barriers and financial risks for renewable developers.
- While completed projects see moderate interconnection costs (e.g., completed solar projects around $73-$81/kW), the risk of escalating costs during the process is driving some developers to abandon projects.
Summary
| Technology | Approximate Interconnection Cost (per kW) | Relative Cost Rank | Notes |
|---|---|---|---|
| Onshore Wind | ~$909 (ISO-NE) | Highest | High withdrawal rates linked to cost |
| Solar | ~$240-$450+ (varies by region) | Mid-high | Costs doubled recently; withdrawals rising |
| Battery Storage | ~$230-$335 | Lower than solar and wind | Costs rising but still below most renewables |
| Natural Gas | ~$24-$91 | Lowest | Consistently lower interconnection costs |
In conclusion, solar and battery storage interconnection costs are generally higher than those for natural gas but lower than onshore wind, with battery storage often cheaper than solar. Rising costs and variability, especially for projects that do not complete the process, pose challenges for renewable energy deployment.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-interconnection-costs-for-solar-and-battery-storage-projects-compare-to-other-types-of-projects/
