What’s The Real Cost Of Renewable Energy?
This is a totally reasonable question, especially if you’re considering going green.
But it’s also a pretty complex one. The answer isn’t uniform across the board. The cost of renewables for consumers depends on plenty of variables, such as electricity prices in your state, what kind of power you’re receiving, and installation costs for equipment like solar panels.
However, we can give you some insight into how much renewable generation costs on the whole. Hint: it’s cheaper than fossil fuels.
Let’s take a look at the numbers, shall we?
The price of renewables continues to plummet, and that trend isn’t showing any signs of slowing. Onshore wind costs fell by 15% in 2021, offshore wind by 13%, and solar PV by 13%.
More specifically, the global weighted average levelized cost of electricity (LCOE) of new onshore wind projects added in 2021 fell to USD 0.033/kWh, while that of new utility-scale solar PV is USD 0.048/kWh. The LCOE of offshore wind declined to USD 0.075/kWh.
What is the LCOE? It’s the total cost of building and operating a power plant over an assumed lifetime. So we’re not talking about the cost of solar panels you’d put on your roof. We’re talking about the solar energy (or wind) you buy from suppliers, where the implementation costs are distributed.
In short, this means that green energy is economically competitive with fossil fuels.
So what does that mean for you, the consumer?
Again, this depends. What you pay for green energy will depend largely on where you live and the types of green programs available.
According to the National Renewable Energy Laboratory (NREL), the average residential premium for participating in a green power program is around $0.018/kilowatt-hour (kWh), or about $195/year based on an average home’s energy use.
In the case of residential solar panels, initial implementation prices are high—but the ROI for solar is a lot higher than investing in fossil fuels. For example, solar panels in Massachusetts cost about $2.87 per watt. For a standard 6-kW system, you’d pay about $16,440.
However, those solar panels will start to pay off in the long run. The average household saves $1,500 a year with solar power. Monthly energy bills can go from $200 to around $20.
Also: we’d be remiss not to talk about the environmental cost of not investing in renewables.
As you’ve probably noticed (or even witnessed firsthand), we’re in a bit of a climate catastrophe. Crazy weather instances, fires, flash floods, and other disasters will progressively worsen if the world doesn’t switch to renewables soon. Renewable energy sources don’t emit the carbon emissions that cause climate change and threaten human health.
So, maybe the real question is not what the cost of renewable energy is. Perhaps a better way to put it: what’s the cost of not investing in renewables?
There’s only one planet, and we can’t afford to lose it.
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