One of the frequent criticisms about renewable energy is that it’s more expensive than energy generated from fossil fuels. Going renewable just doesn’t make financial sense, critics say. Well, allow us to make like Dwight from The Office and drop some facts about the cost of renewable energy — and the true cost of fossil fuels.
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Renewable energy costs less than even the cheapest fossil fuels
When it comes to the cost of new power generation, onshore wind and solar are now the cheapest sources of energy, even less than gas or coal. Onshore wind and solar can cost as little as $0.04 per kilowatt-hour (kWh), while fossil fuels can cost around $0.18 per kWh.
The International Renewable Energy Agency found that the majority of US coal capacity (61%) costs more than renewable energy capacity. If we retired those more expensive coal plants, we could save an estimated $5.6 billion per year on generating electricity. We’d also avoid 332 million tons of CO2 emissions.
It’s true that renewable energy used to be more expensive. But as technology has improved, the cost to construct new generation has dropped dramatically. The cost to construct new solar installations has come down about 90% in the last decade, for instance. The lifetime costs of onshore wind farms have fallen about 71% over the same period.
Another reason that renewable energy has become cheaper than fossil fuels? The energy sources themselves — the sun, the wind, hydropower — don’t cost a thing. Can’t say the same thing about an oil well.
Fossil fuels cost us a lot in other ways
Even if energy from fossil fuels didn’t cost more to generate, it comes with a lot of other costs.
Price volatility and energy insecurity
Energy from fossil fuels is subject to the whims of global fossil fuel markets. That’s something we’re all too familiar with these days. Global events, from the pandemic to Russia’s invasion of Ukraine, have sent energy prices on a rollercoaster over the last few years. Last year, electricity costs rose faster than they have since 2008. Costs per kWh jumped 4.3% from 2020. And then there are prices at the gas pump. According to AAA, average gas prices as of April 14 were $4.07 per gallon, up from $2.86 a year ago.
Burning fossil fuels doesn’t just release greenhouse gasses. It also releases other forms of pollution, including particulate matter. Why is that important? Because it can cause negative health effects, including respiratory problems like asthma and reduced lung function, heart disease, premature births, and premature deaths. Last year, experts reported that air pollution is responsible for a shocking one in five deaths around the world — double previous estimates. Burning fossil fuels is a huge contributor to that air pollution. And those health effects disproportionately affect communities of color and low-income communities.
Of course, health problems come with their own costs. The health impacts of fossil fuel-generated electricity total an estimated $886.5 billion a year in the US alone. The American Lung Association found that transitioning away from fossil fuels to clean energy could have public health benefits totaling $1.2 trillion by 2050.
Last but certainly not least, burning fossil fuels for power and transportation is a huge source of the greenhouse gas emissions that cause global warming. Together, transportation and electricity account for more than half of greenhouse gas emissions in the US.
Global warming is directly tied to increased extreme weather events and natural disasters. Climate-fueled natural disasters cost the US $145 billion in 2021. In the last five years, climate disasters have cost us a total of $742.1 billion. That’s one-third of the total disaster cost of the last 42 years.
Be part of the clean energy transition from home
So what can you do with all this information? In short, anything that you do to fight fossil fuels matters. But one solution we’re very excited about — our CEO, Kiran, even calls it “the best energy product out there” — is community solar. Community solar is kind of like a CSA (community-supported agriculture) for solar power. You subscribe to a share of a local solar farm instead of installing your own rooftop panels. That’s one of the reasons we love it — it’s available to anyone who pays a power bill.
Your solar farm puts renewable energy right into your state’s power grid, decreasing the need for energy from fossil fuels. It’s one of the most direct actions you can take to help kick fossil fuels out of the power supply. As an added bonus, you’ll save on your power bill thanks to solar credits.
A number of states have started community solar programs to encourage the development of clean energy. Check if yours is one of them!