The Plummeting Cost of Renewables

A timely transition to renewable energy is imperative to curbing harmful emissions. One of the main arguments against this is economics - renewable energy is more expensive than traditional fossil fuels. However, this is no longer the case. In fact, the paradigm has flipped and it is now cheaper to build and use a combination of renewables than it is to build new natural gas plants.

Our World in Data, a data aggregation effort in collaboration with Oxford University, estimates that the average price of PV solar has dropped from $359 per megawatt hour to $40 between 2009 and 2019. Onshore and offshore wind are following a similar trend as technologies improve and manufacturers can take advantage of economies of scale. 

The price of renewable projects will continue to trend down, while it is very unlikely that other traditional fuel sources will become more cost-effective. The technologies and scale of nuclear, coal, and natural gas generation are mostly optimized and even with significant improvements would not be able to keep pace with renewables. Further, the cost of coal and natural gas generation are dependent on the price of the raw materials themselves, which can be very volatile. 

The proposed Virginia Green New Deal was met with criticism because of the inclusion of a moratorium on new fossil fuel infrastructure. While it is important to consider how we bridge our current electricity generation and the ultimate goal of renewable generation, any fossil fuel infrastructure built now would have to be operational for decades to justify the expenditure. There is no longer an economic justification for investing in dated energy resources. And the faster we deploy renewables the more benefits we’ll see and cheaper they will become.