Natural Gas Boom Won’t Stall U.S. Renewables

This briefing by RMI analyzes the impact of low natural gas prices, driven by hydraulic fracturing, on the growth of renewable energy in the United States. While low wholesale gas prices create near-term financing challenges for utility-scale projects, the document argues that distributed solar PV and long-term cost declines in wind and solar will ensure continued renewable energy expansion.

• Low natural gas prices resulting from hydraulic fracturing ("fracking") create an oversupplied domestic market, which depresses long-term power sale contract pricing and challenges the financing of new utility-scale renewable power projects.
• Natural gas prices are expected to face upward pressure from supply-side factors—including increased regulation, underperforming production wells, and higher drilling lease costs—and demand-side factors such as LNG exports, CNG vehicle use, and the replacement of coal in electrical generation.
• Utility-scale wind power is projected to compete head-on with wholesale natural gas in more locations by 2016, supported by a 14 percent average annual decline in wind turbine pricing since the mid-1980s.
• Distributed solar photovoltaic (PV) development is less impacted by low wholesale gas prices because it competes against rising retail power rates rather than wholesale prices.
• Solar PV installation costs have fallen by more than 50 percent since 2007. By early 2013, crystalline solar module costs were predicted to reach 70 cents/watt, bringing commercial installation costs to approximately $2.70/W and residential costs to about $3.60/W.
• Grid parity has already been reached in Hawaii and California due to high retail electricity rates, signaling that more areas will reach this tipping point as solar PV costs continue to drop.

APA

RMI (2012). Natural Gas Boom Won’t Stall U.S. Renewables. https://rmi.org/resources/natural_gas_boom_wont_stall_us_renewables/

Chicago

RMI. Natural Gas Boom Won’t Stall U.S. Renewables. 2012. https://rmi.org/resources/natural_gas_boom_wont_stall_us_renewables/.

Wikipedia

{{cite report |author=RMI |title=Natural Gas Boom Won’t Stall U.S. Renewables |date=16 February 2012 |url=https://rmi.org/resources/natural_gas_boom_wont_stall_us_renewables/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2012natural, author = {{RMI}}, title = {{Natural Gas Boom Won’t Stall U.S. Renewables}}, institution = {RMI}, year = {2012}, month = feb, url = {https://rmi.org/resources/natural_gas_boom_wont_stall_us_renewables/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }