Most people believe that it’s the opposite but the fact of the matter is in the last 10 years the price of solar panels per watt declined 75%, and price of wind turbines per watt declined 50%. The price of electricity in areas around the world that deployed significant quantities of renewables increased.
The theories behind the prices of electricity
It could be that while solar and wind electricity became cheaper, nuclear and natural gas became more expensive which eliminated any savings and raised the overall price of electricity.
Another theory might be that the closure of nuclear plants, like those in California and Germany, resulted in higher energy prices. As we know, nuclear energy leaders France, Sweden and South Korea have the advantage of enjoying the cheapest electricity in the world.
Germany closed 5 nuclear plants including 4 reactors at currently operating plants and the results are that France has 45% cheaper electricity than Germany.
On the other hand, prices of fuels, natural gas and coal remained low, despite increased demand for those 2 fuels in Germany.
The reasons behind cheaper solar panels and wind turbines making electricity expensive?
Well, it’s only logical that the economic value of wind and solar would decline as they become an important part of our electricity supply. The reason behind this is because both solar and wind produce more energy when society does not need it, and not enough when they do.
So solar and wind require that natural gas plants, hydro-electric dams or other forms of reliable power, be ready to dish out electricity when the natural forces like wind or sun are not about. The above “unreliable” effect requires solar and wind-abundant places like Germany to pay other neighbouring nations to take their energy when they are producing too much of it.
A German economist namely Lion Hirth predicted that:
The economic value of wind on the European grid would decline 40% once it becomes 30% of electricity while the value of solar would drop by 50% when it got to just 15%… the economic value of wind would decline 40% once it reached 30% of electricity, and that the value of solar would drop by 50% when it reached 15% of electricity.
A couple of years back, the share of electricity coming from wind and solar was 26% in Germany and 23% in California. Note that Germany has one of the top and most expensive electricity in Europe.
Solar and Wind Energy in late 2019
Controlling renewables for low-carbon electric power generation was considered uneconomical before but now the costs are continuously decreasing and this is the reason why global renewable energy capacity is being boosted.
These renewable sources are helping to reduce carbon emission and also helping against the effects of global warming. More proof of these positive effects can be seen by reading about the ozone layer being on a recovery course, and you can see some of the nations worldwide that are participating in this great accomplishment today.