Myth Busting: Renewable Energy is too Expensive

July 10, 2015

When it comes to the environment, most of us are tired of perpetual bad news. Melting ice caps, oil spills, climate change and deforestation are not the paths we want to travel down. On the contrary, renewable energy is the cost-effective solution to our ever-surging power needs.

We cannot compare first generation solar farms to traditional coal plants that have been around for decades. Sure, when renewable energy was in its infancy, it wasn’t all that efficient, and installation costs were high. Add to that the fact that fossil fuel plants were already in place and in good working order, and what resulted was a good argument to stick with the status quo. But these days, innovations in renewable technologies coupled with aging fossil fuel plants are making renewable sources the stuff of our clean energy dreams.

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Rapidly Declining Costs

Since 2010, the price of solar energy installations has decreased by 50 percent, and solar panels cost half of what they did in 2008. What’s more, the cost of wind energy has dropped by 43 percent in the last four years.

In a recent issue of Forbes, Michael Kanellos reported that funding for renewable projects declined by $28 billion in 2013, dropping from $359 billion in 2012 to $331 billion in 2013.  The decline was not due to a lack of interest among investors, but rather the result of solar and other renewables actually becoming cheaper. According to the article, around 80 percent of the sharp fall in private renewables investment came from falling costs for technologies — particularly solar PV — where efficiency is rapidly increasing and unit costs are coming down.

The Real Cost of Fossil Fuels

There’s no denying that, on the surface, energy from fossil fuel plants is still cheaper than renewable energy, but the real cost of these forms of energy production isn’t always taken into account. When environmental impacts are factored in, their costs are on par with renewable energy generation.

Bloomberg’s Climatescope 2014 report discovered that renewable energy is as affordable and, in some cases, cheaper than fossil fuel options in 55 developing countries in Asia, Africa, Latin America and the Caribbean. This trend is also evident in the U.S., and a recent study by Lazard showed that the cost of solar energy was as low as 5.6 cents a kilowatt-hour, with wind coming in at 1.4 cents. When compared to natural gas, which costs about 6.1 cents a kilowatt-hour, and coal, which costs 6.6 cents, the renewables are looking like a good investment.

This drop in price means that large energy producers are taking renewables seriously and investing in energy that is cleaner, greener and cheaper. Solar and wind farms are popping up across the country to meet energy needs. When it comes to energy, the future’s looking pretty bright right about now.

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