Renewable Energy May Soon be Cheaper Than Existing Fossil Fuel Plants
Experts forecast that prices will drop by about 50 percent due in part to industry expansion and technological advancements.
Check out to see how much do solar panels cost.
Vishal Shah, clean energy expert and former Managing Director at Deutsche Bank, expects “utility-scale solar to offer the lowest cost option for new power generation in most parts of the world and [that] distributed solar power costs would be almost 50% lower compared to the price of current grid electricity.” In many parts of the US, the combination of renewable energy and storage is approaching or achieving grid parity, which means that the levelized cost of renewable energy is equivalent or lesser than that of existing energy sources.
As grid parity becomes a reality for renewable energy resources across the country, grid planners are being forced to reevaluate their portfolio planning strategies.
Around 500 gigawatts on the grid will near retirement age in 2030. The industry has recently turned to natural gas as a potential solution to address the grid’s aging infrastructure. A glut of cheap natural gas helped it surpass coal as the largest electricity source in America for 2017.
However, a recently released report from the Rocky Mountain Institute found that the cost-effectiveness of a combination of renewable energy, distributed energy resources, and storage is beginning to undercut natural gas plants in many areas. According to the Rocky Mountain Institute’s Alex Engel, “Over the next 10-20 years, clean energy costs are predicted to decline to the point where it’s cheaper to build the clean energy portfolios than it is to run an existing gas plant.”
While cost-effectiveness currently varies across the US, areas that have traditionally been fossil-fuel friendly are being enticed by cheap, renewable energy. Within the next two to three decades, it’s likely that a renewables-heavy portfolio will soon dominate the entire grid.
