What's now the cheapest source of US electricity?

Wind.

That's as measured by current power purchase agreements (PPAs), which are contracts between generators and buyers of power that specify how much power is to be delivered and at what price.

Solar power isn't far behind wind. Natural gas is third-cheapest. The numbers come from the 2018 Wind Technologies Market Report, one of three reports on wind energy just out from the US Department of Energy.

The others are the 2018 Offshore Wind Technologies Market Report and the 2018 Distributed Wind Market Report. ("Distributed wind" refers to power generation that occurs close to where the power is consumed. That can include anything from small turbines powering individual homes to fairly large projects owned by municipalities or Indian tribes.)

All three reports summarize the wind energy market as it stood at the end of  2018.

Natural gas prices have fallen over the past decade. Prices for wind and especially solar energy have dropped much more steeply. The report projects that wind prices will continue to drift down over the next three decades as natural gas prices slowly rise.

"With the support of federal tax incentives," the Wind Technologies report says, "both wind and solar PPA prices are now below the projected cost of burning natural gas in existing gas-fired combined cycle units."

The federal tax credit is expiring. Projects that begin construction after the end of this year will not be eligible. (Projects can claim the credit for the first 10 years of energy generation, so some owners will still get tax breaks for another decade.)

The report says loss of the tax credit will slow the growth of wind generation starting in 2021. "At the same time," it says, "the potential for continued cost reductions may enhance the prospects for longer-term growth."

Additional power transmission lines should also help. "New transmission in some regions is expected to open up high-quality wind resources for development," the report says.

That's important. It's technically feasible to put a conventional fossil-fuel power plant just about anywhere. But wind turbines make sense only in areas with lots of wind. You need transmission lines to connect them to the grid, plus additional high-voltage lines within the grid itself to distribute that wind power to distant regions that use it to balance other power sources.

This map shows the average annual wind speed 80 meters above the surface level. Darker colors indicate greater speed. Sources: AWS Truepower, National Renewable Energy Laboratory (NREL)

The highest average US wind speeds are in what the Wind Market report labels the Great Lakes states (Wisconsin, Illinois, Indiana, Ohio, and Michigan) and especially the Interior states (from Montana, North Dakota, and Minnesota in the north to New Mexico and Texas in the south).

The Southeast is something of a wind desert. Consequently, it contains few wind farms and produces little wind energy.

Altogether, the US wind industry employed 114,000 full-time workers by the end of 2018, a new high. By comparison, the US Bureau of Labor Statistics figures for July 2019 say US utilities employed 554,400 workers. The mining and logging industries combined employed 752,000.

Here are some other tidbits from the reports:

  • The average capacity factor (percentage of the time that wind turbines are producing their maximum rated power) reached 35% in 2018, an all-time high. Among wind projects built in recent years (2014-2017), it hit 41.9%.
  • The US added 7,588 megawatts of wind power capacity in 2018, representing an investment of $11 billion. That brought total wind power capacity to 96,433 MW. Texas remained the leading wind-power state, with 2,359 MW added in 2018 and a cumulative capacity of 24,895 MW.
  • Turbines are getting huge. The average rated capacity of new turbines was 2.43 MW. The average rotor diameter was 115.6 meters (379 feet). In 2008, no turbine rotors reached 100 meters in diameter. In 2018, 99% of new turbines used rotors of at least that diameter.
  • The average total height for turbines installed in 2018 was 479 feet. In the first few months of 2019, 44% of permit applications called for heights of more than 500 feet.