TOOLS FOR ENERGY REGULATORS TO MANAGE POWER SECTOR INFLATION

The report finds that while wind, solar, and battery prices have recently leveled off or risen due to supply chain disruptions, trade issues, and high interest rates, they remain competitive with fossil fuels. It argues that the long-term trend of cost reduction will continue and recommends that regulators use competitive procurement, leverage Inflation Reduction Act (IRA) incentives, and reform interconnection and transmission planning to lower costs.

• Recent price increases in wind, solar, and battery storage have been relatively modest, and these resources continue to maintain significant market value across the United States.
• Inflation in the power sector is driven by a combination of supply chain disruptions, trade policies (such as the Uyghur Forced Labor Prevention Act), raw material price volatility, rising interest rates, and labor constraints.
• Interconnection processes have become a major bottleneck and cost driver, with the average time to complete the study process doubling over the last decade to four or five years.
• Renewable energy remains more cost-competitive than fossil fuels, as the latter are subject to the same inflationary pressures on materials and additional volatility in fuel prices.
• Future cost projections from the National Renewable Energy Laboratory (NREL) suggest a return to declines, with solar-plus-storage costs potentially falling 25-30% and wind costs falling more than 50% by the 2030s.
• Regulators can reduce costs by utilizing Inflation Reduction Act (IRA) bonuses for energy and low-income communities, improving transmission planning via grid-enhancing technologies (GETs), and diversifying the energy mix with offshore wind and geothermal.

APA

O’BOYLE, M., GOLDSTEIN, R., & SOLOMON, M. (2023). TOOLS FOR ENERGY REGULATORS TO MANAGE POWER SECTOR INFLATION. Energy Innovation. https://energyinnovation.org/wp-content/uploads/Tools-for-Energy-Regulators-to-Manage-Power-Sector-Inflation-FINAL.pdf

Chicago

O’BOYLE, MIKE, RACHEL GOLDSTEIN, and MICHELLE SOLOMON. TOOLS FOR ENERGY REGULATORS TO MANAGE POWER SECTOR INFLATION. Energy Innovation, 2023. https://energyinnovation.org/wp-content/uploads/Tools-for-Energy-Regulators-to-Manage-Power-Sector-Inflation-FINAL.pdf.

Wikipedia

{{cite report |last1=O’BOYLE |first1=MIKE |last2=GOLDSTEIN |first2=RACHEL |last3=SOLOMON |first3=MICHELLE |title=TOOLS FOR ENERGY REGULATORS TO MANAGE POWER SECTOR INFLATION |publisher=Energy Innovation |date=October 2023 |url=https://energyinnovation.org/wp-content/uploads/Tools-for-Energy-Regulators-to-Manage-Power-Sector-Inflation-FINAL.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{oboyle2023tools, author = {O’BOYLE, MIKE and GOLDSTEIN, RACHEL and SOLOMON, MICHELLE}, title = {{TOOLS FOR ENERGY REGULATORS TO MANAGE POWER SECTOR INFLATION}}, institution = {Energy Innovation}, year = {2023}, month = oct, url = {https://energyinnovation.org/wp-content/uploads/Tools-for-Energy-Regulators-to-Manage-Power-Sector-Inflation-FINAL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }