The Myth of Renewables Pushing Up Power Prices

The document challenges the narrative that wind and solar power drive up electricity costs, asserting that real-world data from multiple global markets often shows an inverse relationship. It highlights that in the US and EU, regions with higher-than-average renewable shares frequently have lower-than-average household power prices. While acknowledging that factors like transmission costs, wildfire mitigation, and market liquidity can influence prices, the briefing concludes that renewables generally lower wholesale costs by displacing expensive fossil fuels.

• Global data from 2024 indicates that 90% of new grid-scale renewable energy projects were cheaper than the most affordable new fossil fuel alternatives. Onshore wind is the cheapest new electrical energy source globally at an average LCOE of USD 0.034/kWh, which is 53% cheaper than the cheapest fossil fuel-based options.
• In the United States, most states with above-average wind and solar shares have below-average household electricity prices. This includes Iowa, South Dakota, and New Mexico, where variable renewables exceeded 50% of the mix in the first nine months of 2025. Seven of the ten states with the lowest residential tariffs have above-average renewable integration, including Oklahoma.
• In the European Union, the growth of variable renewables is decoupling power prices from fossil fuel costs. In Spain, wind and solar made up 44% of generation in the first half of 2025, resulting in a wholesale electricity price 32% lower than the EU average and a pre-tax household price of EUR 0.18/kWh, which is 13.1% below the EU average.
• In Australia, while South Australia has high prices due to an "illiquid and highly concentrated market for ‘on-demand’ electricity," daily data shows that prices tend to decrease as the share of wind and solar rises. When these renewables exceed 85% of the mix, wholesale prices occasionally become negative for the entire day.
• In India, the relationship between renewables and prices is less clear because coal still provides 73.6% of power output as of 2024. However, in Rajasthan, the average price paid by distribution utilities is below the national median, and in Madhya Pradesh, increased renewable integration could reduce utility power purchase costs by up to 11%.

APA

Hedley, N. (2025). The Myth of Renewables Pushing Up Power Prices. Zero Carbon Analytics. https://zerocarbon-analytics.org/energy/the-myth-of-renewables-pushing-up-power-prices/

Chicago

Hedley, Nick. The Myth of Renewables Pushing Up Power Prices. Zero Carbon Analytics, 2025. https://zerocarbon-analytics.org/energy/the-myth-of-renewables-pushing-up-power-prices/.

Wikipedia

{{cite report |last1=Hedley |first1=Nick |title=The Myth of Renewables Pushing Up Power Prices |publisher=Zero Carbon Analytics |date=17 December 2025 |url=https://zerocarbon-analytics.org/energy/the-myth-of-renewables-pushing-up-power-prices/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hedley2025myth, author = {Hedley, Nick}, title = {{The Myth of Renewables Pushing Up Power Prices}}, institution = {Zero Carbon Analytics}, year = {2025}, month = dec, url = {https://zerocarbon-analytics.org/energy/the-myth-of-renewables-pushing-up-power-prices/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }