Report looks at US renewable energy construction trends, ranks companies by experience

Bloomberg New Energy Finance, CohnReznick

With U.S. renewable energy capacity (excluding hydropower) expected to double by 2021, the firms that provide engineering, procurement and construction (EPC) services for solar and wind projects will need to adapt to the economic realities of a changing industry.

Faced with a scarcity of large utility-scale projects and shrinking profit margins, the largest firms will need to look at new opportunities or change their business models to avoid disappointing returns.

The findings come from a new report researched by Bloomberg New Energy Finance (BNEF) and commissioned by CohnReznick. The report also includes a ranking of major EPC companies that have brought the largest quantity of wind and solar capacity online. The rankings include: solar companies SunPower, First Solar, Mortenson and E Light Wind and Solar; and wind companies Mortenson, IEA, RES Americas and Blattner.

Key Findings:

  • Some EPC firms that have focused on wind are broadening their attention to solar, which offers a more stable policy environment. Firms that can focus on smaller utility-scale solar projects (1 to 10 MW) in states with robust incentives might find higher margins than might be gained from large-scale wind.
  • Key EPCs with significant experience as general contractors also have developed deep expertise in U.S. renewable energy, providing their clients with knowledge of financing obstacles, development trends and technology advancements. They also are becoming involved in areas such as permitting and securing the point of interconnection. Some EPC firms are providing their clients with financing or alternative payment methods to help complete projects.
  • EPC firms are beginning to look to other adjacent technologies such as advanced storage.
  • EPC costs have been falling as the increased scale and maturity of the U.S. solar and wind industries are, for the most part, driving down total project costs. In some regions, competition with the oil and gas sector for resources is reversing this trend.

The report also explores how EPC firms across the country differentiate themselves through factors such as company size and financial health, geographic focus and client services.

“From afar, the various firms that provide these services might appear to be indistinguishable,” said Michel Di Capua, head of analysis in the Americas for BNEF. “But some firms have carved specialized niches or developed impressive track records. In an environment in which the easy projects have been done and incentives are expiring, differentiation and know-how matter more than ever.”

The market for EPC services for utility-scale solar and wind is forecast to peak at $7.2 billion in 2015 before falling 28 percent to $5.2 billion in 2016 and another 52 percent to $2.5 billion in 2017, as a number of federal tax incentives effectively expire or decrease in those years.

The report also looks at the economics of providing EPC services. Estimated EPC prices (including component costs but excluding development costs) for photovoltaic solar projects range from $1.38 per watt for very large desert-based projects using thin-film modules to $1.97 per watt for projects around 5 MW in size in New Jersey. Labor is the most important variable cost. For wind, EPC costs (including balance of plant costs but excluding costs of turbines) range from 41 cents per watt in Oklahoma to 62 cents per watt in New England. 

Click here for report

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at

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