How solar swept the U.S. power grid

Photo: Justin Sullivan, Staff / Getty Images SAN FRANCISCO, CA - MAY 09: Luminalt solar installers Pam Quan (R)...

A new report by the U.S. Energy Information Administration explains how a dramatic fall in the cost of solar panels has allowed that technology to sweep the U.S. power grid.

The second largest source of new power generation in 2016, solar energy costs came down by close to a third between 2013 and 2016, at the same time construction costs for natural gas plants rose slightly, according to the EIA.

With construction costs of $2,436 per kilowatt, solar has turned into a relative bargain for developers, who can not only claim a federal tax benefit but also avoid the long-term and volatile fuel costs associated with coal and gas plants. Gas plant construction averaged $895 per kW.

"Crystalline silicon has become the most widely used photovoltaic technology as the technology has matured and construction cost have dropped. Its installed costs declined $400-$500/kW per year to $1,000/kW lower than that of thin film as a result of demand and economies of scale," the report reads.

Wind power, the largest source of new generation in 2016, came down from close to $2,000 per kW in construction costs in 2013 to $1,630 in 2016.

RELATED STORY: Does Donald Trump have it in for solar?