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More than 40 years ago, President Jimmy Carter solar panels installed on the roof of the White House. In his speech unveiling the panels, Carter warned that this technology could become “a curiosity, a museum piece, an example of the road not taken,” or, he said optimistically, a defining moment for the country, “harnessing the power of the sun to enrich our lives , as we move away from our crippling dependence on foreign oil.”
With the dramatic growth of solar energy In recent years, technology has certainly become much more than a curiosity. It’s starting to live up to its promise of clean, cheap, abundant power.
“When Carter put solar panels on the White House, it was a moment, but solar panels were super expensive. It was a symbol of what it stood for. It was not an economic decision,” said Arvin Ganesan, CEO of Fourth power, a manufacturer of energy storage systems. “What has happened since then is that the cost of renewable energy is now the cheapest way to generate new electrons on the grid.”
While renewable energy is now a cheaper way to generate electricity than climate warming fossil fuels, your electricity bill may still be rising. So what gives and when will the tide turn?
Electricity costs continue to rise
It’s pretty cheap to turn solar energy into electricity. But it doesn’t feel like energy is cheap when electricity bill arrives
Average electricity prices increased by nearly 3% between February 2023 and February 2024, according to US Bureau of Labor Statistics. This increase was not universal, depending on the state, thanks to widely varying policies and economic factors. For example, North Carolina saw the largest increase of 17 percent during that period, while spending in New Hampshire fell 17.7 percent.
These costs matter. The National Association of Energy Assistance Directors and the Center on Energy Poverty and Climate are expecting domestic cooling costs to rise up 7.9% from last year, largely thanks to rising temperatures.
At the same time, we collect more clean electricity than ever before. In 2023, the U.S. generated 238 terawatt hours of electricity from solar power in 2023, eight times the amount generated a decade earlier.
The problem: We still don’t have enough of this cheap renewable energy. About 60 percent of U.S. electricity still comes from fossil fuels — including 43 percent from natural gas — according to US Energy Information Administration.
This means that most of the network is susceptible to fluctuations in oil prices, which can be affected by wars all over the world, meteorological events and other chaos.
Meanwhile, the portion of our electricity that comes from renewable sources is getting cheaper. In 2022, a report by the International Renewable Energy Agency found that the cost of electricity from wind and solar sources fell 13% or more worldwide.
“Renewables are the cheapest form of energy today,” Francesco La Camera, Director General of IRENA, said in the report. “2022 is a prime example of how economically viable new renewable energy production has become. Renewable energy frees economies from volatile prices and fossil fuel imports, curbs energy costs and increases market resilience – even more so if today’s energy crisis continues.”
Ganesan, whose company develops thermal battery technology, credits the technological developments that have brought us to this point.
“The efficiency of solar panels it’s just significantly better at this point,” he said. “The output of the solar panel is now very efficient. And what has caused this is many projects catalyzed by the government over these 20 years to reduce the cost of renewables. So government R&D, government intervention started this revolution to bring low-cost, high-efficiency solar panels to market. And the same goes for the wind.”
Who should pay for the energy transition?
Despite the shift to cheaper, cleaner, renewable energy sources, consumers still do not rate the energy system highly. A recent report from the global accounting and consulting firm Ernst and Young in detail reducing confidence in the energy system and the feeling among consumers that the responsibility for change lies with them as individuals. Instead, Americans believe that the burden of the energy transition should fall more heavily on the energy industry.
The survey of 3,000 US consumers found that only 30% of Americans “feel confident that their energy will remain affordable” and saw a drop in “consumer confidence in the US energy system” to 56.9% from 65.8% in 2022. It also found that most Americans (68%) believe they are “doing everything they can to be sustainable” and that energy providers (65%), local governments (42%) and oil and gas companies (38 %) must take the lead in the transition to cleaner energy.
EY Global Energy & Resources Customer Experience Transformation Leader Greg Guthridge, the lead author of the report, said the findings did not shock him. “There’s this big gap, and that’s exactly what we expected to see,” he said. “The early adopters have moved on, and now we need to find a way to enable those who either can’t or don’t want to move right now through the energy transition.”
Even those willing to switch to cleaner energy don’t always have the ability to do so, making it even more challenging for consumers to drive the market, said Chris Ventura, executive director of the Midwest branch of Consumer Energy Alliance. While programs like public solar energy and Solar energy for all are looking to expand access to solar energy beyond rooftop solar systemsfor example, they are not available to everyone.
“For the vast majority of people out there, it’s going to take some time,” Ventura said. “Unlike the iPhone, where it doesn’t matter where you live, if you love renewable energy and want to put a solar panel on your roof, you can do it if you own your home. But if you’re a renter or living in a multi-family housing unit or apartment, you don’t have those options.”
Like the consumers polled by Ernst & Young, Ganesan said there should be less demand from individuals and more emphasis on systemic change to solve “systemic problems”.
“I absolutely resonate with the idea that people feel overwhelmed in general and they don’t want it to fall on their shoulders,” he said. “One in five people cannot afford to pay their electric bill in the United States, so for the decision to fall solely on their shoulders is not fair, especially when governments and utilities are much better equipped to provide the solutions.” ”
When will renewables lower energy prices?
In an industry that is catching up with technology, demand and infrastructure, when will consumers see a difference in theirs energy costs? Experts hope that we are not far away and that momentum is on their side.
“Simply put, if the (capital cost) of building new renewables plus storage is cheaper than … building a new natural gas plant plus the cost of the fuel, then you’re building clean energy every time,” Ganesan said. “This cost reduction will ultimately result in cost savings for consumers.
One of the factors affecting clean energy is the initial cost. from solar panel installation to electric vehiclesthe promise of return on investment can be a tough sell. But as these initial costs decrease with better technology, introduction becomes easier.
Investing in renewable energy “sounds too good to be true,” said Albert Gore, executive director of Zero Emissions Transport Association (and son of former Vice President Al Gore). “And it also requires the ability to invest, in the case of a solar system, $30,000 knowing that you’re going to break even in maybe eight years, depending on where you live.” But public sentiment has improved dramatically.”
And for all these uses of electricity, one thing is certain: stability is a good thing. And whether you’re plugging in your electric vehicle or powering your home, it’s easier to rely on the wind and the sun than it is to collect fossil fuels and transport them around the world.
“Renewables, along with other technologies … have the potential to help stabilize the grid in the long term and thereby reduce costs,” said Ben Prochazka, executive director of the non-partisan nonprofit The Electrification Coalition. “That’s where the costs come from: erratic energy and erratic demands.”
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