Solar Industry Update

1. 2. Five Things To Know From LBNL's Utility-Scale Solar, 2023 Edition Half of utility-scale PV capacity built during January-July 2023 is in Energy Communities and should qualify for the IRA Energy Community tax credit adder. Under IRA, the production tax credit (PTC) is more valuable than the investment tax credit (ITC) for many utility-scale PV systems, especially without bonus credits. 3. Average capacity factors by plant vintage have been flat since 2014 as installation in areas with lower solar resource has offset increases in ILR and use of tracking. 94% of utility-scale capacity installed in 2022 used tracking, the highest ever. Because of high electricity prices, the total (energy plus capacity) value of PV electricity increased 40% between 2021 and 2022, reaching a record $71/MWh. 4. 5. Annual Capacity Additions (GWAC) >5 MWAC 12 1 Project Not in Energy Community 10 Project in Energy Community Capacity Factor (in AC terms) Higher CapEx and/or lower capacity factor prefers the ITC Lower CapEx and/or higher capacity factor prefers the PTC Typical CapEx and capacity factor ranges for utility-scale PV CapEx ($/W-AC) 1.8 2.0 2.2 2.4 2.6 2.8 3.0 2 1.0 1.2 1.4 1.6 1.8 CapEx ($/W-AC) 2.0 2.2 2.4 2.6 2.8 3.0 1.0 1.2 1.4 1.6 20% 22% Typical CapEx 24% 26% 28% 30% and capacity factor ranges for utility-scale PV 32% 34% 36% 38% 40% 42% 44% 30% ITC versus 100% PTC 46% 50% ITC versus 120% PTC (Domestic Content and Energy Community) 48% (Base Case) 50% Average Capacity Factor in 2022 30% 2023 (until July) projects built in Energy Communities 25% Index of Capacity Factor Influences (2010=100) 200 Capacity factor 3 Prevalance of tracking 175 8 6 projects built in "2023 Energy Communities" in past years 69% 63% 59% 54% 20% 15% 48% 10% 150 125 ILR (DC:AC) 100 4 65% 5% 61% 73% 41% 46% 74% 58% 2 52% 75 Solar resource 37% 31% 50 74% 0% 26% 26% 42% 39% 35% 27% 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023* 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Commercial Operation Year (COD Year) Source: Bolinger et al. 2023. Utility-Scale Solar, 2023 Edition. Lawrence Berkeley National Laboratory. NREL 20

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