Reality Check: The Green Inflation Myth

This fact sheet by RMI argues that renewable energy is a disinflationary force rather than a driver of inflation. It contrasts the experience curves of solar and wind technologies, which lead to falling costs as deployment increases, with the volatile commodity-based pricing of fossil fuels. The document asserts that accelerating the transition to renewables is the most effective way to reduce energy costs and mitigate inflation.

• Renewable energy technologies are 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). At a gas price of $5 per MMBTU, gas electricity costs exceed $70 per MWh.
• Solar and wind power benefit from experience curves where costs drop as deployment doubles—by approximately 30 percent for solar and 16 percent for wind. Over the last ten years, costs have fallen by 90 percent for solar and 60 percent for wind. Oxford University researchers forecast that solar prices could reach approximately $10 per MWh by 2050.
• Unlike renewables, fossil fuels are commodities without a learning curve, meaning their prices fluctuate and are subject to the depletion of accessible reserves and the pricing power of suppliers. While COVID-19 caused temporary supply chain disruptions and price increases for renewables, structural drivers for falling costs remain intact.
• Short-term increases in material costs, such as polysilicon for solar panels, are typical of rapid growth and are addressed by capacity expansion. For instance, Chinese firms plan to increase polysilicon production to support 900 GW of solar panels annually by 2023, which is over three times the current year's expected demand.
• Renewables act as a disinflationary force that could lower global energy expenditures from 3.2 percent of GDP to under 1.6 percent of GDP by mid-century, according to DNV. They provide cheap local energy to the 80 percent of the world in fossil fuel importing countries and represent about 90 percent of expected electricity deployment for those currently without access.

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} }