Can Solar Coupled with Battery Storage System Compete with Natural Gas as Baseload?
A U.S. LCOE Analysis
Abstract
This article evaluates whether utility-scale solar photovoltaic systems combined with battery energy storage can economically and operationally compete with natural gas combined cycle (NGCC) plants as baseload power sources in the United States. Using updated cost data and real-world performance metrics, the analysis compares the levelized cost of electricity (LCOE) for NGCC, solar PV plus 4-hour, 8-hour, and 12-hour battery storage configurations. The study finds that PV plus 4-hour storage now achieves LCOE parity with NGCC in high-solar-resource regions, while longer-duration storage systems, though more expensive, significantly enhance grid reliability and capacity value. The article also discusses the implications of discount rates, degradation, and ancillary service revenues, concluding that solar plus storage is emerging as a viable and increasingly competitive option for future baseload generation in the evolving U.S. energy landscape.
Keywords: Levelized cost of electricity (LCOE), Solar photovoltaic (PV), Battery energy storage system (BESS), Natural gas combined cycle (NGCC), Baseload power, Grid reliability, Capacity value, Energy transition, Ancillary services, U.S. electricity market
1. Introduction
There is a discussion ongoing about whether utility scale solar PV power plants coupled with energy storage can replace the gas-fired thermal power plants as baseload or not. The analysis mainly focuses on the levelized cost of electricity, while ensuring that grid reliability requirements remain a top priority.
This discussion does not cover carbon footprint or environmental impact, as economics primarily drive the choice between systems that provide grid stability, ramp rate control, and grid-forming capabilities.
Levelized cost of electricity (LCOE) is one of the top metrics for investment decisions as it allows for a direct comparison of technically qualified systems, at least for now.
Natural gas combined cycle (NGCC) plants have long served as dependable baseload generators, providing around-the-clock electricity with high thermal efficiency and dispatchability. Combined cycle is selected because it is more efficient than simple cycle technologies or coal, which have lower efficiency and are being rapidly phased out in the U.S. In recent years, utility-scale solar photovoltaic (PV) systems coupled with battery energy storage systems (BESS) have emerged as strong contenders for reliable, continuous power delivery.
BESS, specifically Li-Ion batteries, was chosen because it is the most widely deployed energy storage system so far globally.
This article explores whether solar + storage can economically and operationally rival NGCC power plants, particularly in high-solar-resource markets. Using real-world cost inputs, performance data, and market dynamics, a levelized cost of electricity comparison alongside an evaluation of grid reliability, capacity value, and emissions is presented.
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