Renewables Will Keep Beating Fossil Fuels on Cost

Note: This article was originally published here.

The adoption of clean energy continues to drive down the overall cost of electricity. As the chart shows, the cost of generating solar and wind power has been plummeting, dropping from hundreds of dollars per megawatt-hour to under $50. At the same time, California has transitioned more than a quarter of its electric grid to solar and wind sources, which now account for 27.8% of our power, according to 2022 data from the CA Energy Commission (1).

Experts agree that the prices of solar and wind will continue to drop. As a Canary Media reporter lays out, “By 2030, technology improvements could slash today’s prices by a quarter for wind and by half for solar.” (2)

Therefore, as the cost of renewable energy drops, Californians should be reaping those rewards in their electricity bills. The conversion to green energy should not only benefit our climate, but our pocket books.

Instead, we’re seeing the opposite.

A report released last week by the Legislative Analyst’s Office has been generating headlines: California has the second highest residential electricity rates in the nation (behind only Hawaii). And our rates continue to climb — faster than the rate of inflation and faster than in other states. Moreover, climbing electricity rates endangers the state’s important climate goals of increasing electrification, the LAO points out in its report (3).

To understand more about the factors that feed into California’s high electricity rates, check out this KQED article (https://lnkd.in/gRMFAweb) or read the LAO’s report, but the key takeaway we want to point out is:

Our current system fails to harness the ability of the free market to influence the quantity, quality and price of electricity in this state. Energy is a complicated sector where public interests intersect with profit motives, but we need to create the right incentives to help us transition rapidly towards a green, carbon-neutral future.

📚 Background reading:

(1) CEC 2022 data: https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2022-total-system-electric-generation  

(2) Chart: Renewables are on track to keep getting cheaper and cheaper: https://www.canarymedia.com/articles/clean-energy/charts-renewables-are-on-track-to-keep-getting-cheaper-and-cheaper 

(3) LAO report: https://lao.ca.gov/Publications/Report/4950

— Dave Welch