Is renewable energy cheaper than fossil fuels today? Yes. Renewable energy is cheaper than, or the same price as, fossil fuel energy today.
This is true even though renewable energy, such as solar and wind, represents only around 20% of all the energy we use in the U.S., including fossil fuels.1
And the up front cost of commercial solar panels continues to drop while the life expectancy of commercial solar is up to 30 years.
Indeed, in 2018 solar was only 1.59% as a percentage of total energy used (including fossil fuels) in the U.S. and 2 approximately 7% of total renewable energy production in the U.S.
As can be seen in the chart below on the right showing all types of energy used in the U.S. including fossil fuels, hydroelectric power and biomass represented the largest portion of renewable energy at 6.98% each.
Wind is the next largest source of energy at 6.58% of total energy, including fossil fuels.
Solar is 1.59% and is followed by biomass and geothermal at 1.5% and 0.40%, respectively.
The future is bright for solar and wind developers as more utility, commercial and community solar on-shore and offshore wind farms are brought online.
Indeed, the shift from fossil fuels to cleaner, renewable energy is one of the biggest business opportunities of our lives.
Lazard Finds Renewable Energy Cheaper Than Fossil Fuels
According to Lazard’s 2019 Levelized Cost of Energy (LCOE) Report utility scale solar PV is at cost parity with fossil fuel.
The report states, “…when US government subsidies, such as the ITC, are included, the cost of building new onshore wind and utility-scale solar (with values averaging $28/MWh and $36/MWh, respectively) is competitive with the marginal cost of coal and nuclear generation (with values averaging $34/MWh and $29/MWh, respectively).”
While the Lazard report finds renewable energy cheaper than fossil fuels, the report emphasizes that continued innovation in solar project development is very important for us to continue to reduce costs…
The report observed that, “…regional differences in resource availability and fuel costs can drive meaningful variance in the LCOE of certain technologies, although some of this variance can be mitigated by adjustments to a project’s capital structure, reflecting the availability, and cost, of debt and equity.”
Based on the potential for solar PV and energy storage to grow in the U.S., solar project finance, such as solar tax equity, and development has massive growth potential…
Demand for solar project financing, such as solar tax equity, is increasing each year as the cost of solar energy falls relative to fossil fuels.
While renewable energy is cheaper than fossil fuels, solar power has a long way to go as it is still only a tiny fraction of the energy we use in the U.S. each year.