Reality Check: The Green Inflation Myth

The document refutes the 'green inflation' myth, asserting that solar and wind are the cheapest forms of new electricity generation in 90% of the world. It contrasts the 'experience curves' of renewable technologies, where costs drop as deployment doubles, with the volatile commodity pricing of fossil fuels. While short-term supply chain disruptions and material shortages, such as polysilicon, have caused temporary price hikes, the long-term structural trend remains downward. The text concludes that transitioning to renewables will reduce global energy expenditures from 3.2% of GDP to less than 1.6% by mid-century.

• Renewable energy is significantly cheaper than fossil fuel-based electricity generation in most of the world. In the United States, the average cost per megawatt hour (MWh) for solar is $36 and wind is $38, compared to $108 for coal and $60 for gas (before recent price spikes).
• Solar and wind power costs follow 'experience curves' where costs decrease by approximately 30% and 16% respectively for every doubling of deployment. Over the last ten years, solar costs have fallen by 90% and wind by 60%. Oxford University forecasts solar prices could reach $10 per MWh by 2050.
• Unlike renewable technologies, fossil fuels are commodities without a learning curve, meaning their prices fluctuate and can rise as accessible reserves are depleted. This allows suppliers to extract high profits during demand surges or supply curtailment.
• Recent increases in renewable costs are attributed to short-term COVID-related supply chain disruptions and material shortages, such as polysilicon. However, capacity is expanding to meet demand, with Chinese companies planning polysilicon production for 900 GW of solar panels annually by 2023.
• Renewables act as a disinflationary force that is projected to lower energy expenditures from 3.2% of GDP to under 1.6% of GDP by the middle of the century, according to DNV.

APA

RMI (2022). Reality Check: The Green Inflation Myth. https://rmi.org/resources/reality-check-the-green-inflation-myth/

Chicago

RMI. Reality Check: The Green Inflation Myth. 2022. https://rmi.org/resources/reality-check-the-green-inflation-myth/.

Wikipedia

{{cite report |author=RMI |title=Reality Check: The Green Inflation Myth |date=16 February 2022 |url=https://rmi.org/resources/reality-check-the-green-inflation-myth/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2022reality, author = {{RMI}}, title = {{Reality Check: The Green Inflation Myth}}, institution = {RMI}, year = {2022}, month = feb, url = {https://rmi.org/resources/reality-check-the-green-inflation-myth/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }