Study finds when utilities add renewables consumer costs drop

April 9, 2015

U.S. News & World Report recent­ly shared an analy­sis that shows states with the high­est share of elec­tric­i­ty gen­er­a­tion from renew­able ener­gy sources pay less for pow­er. These find­ings con­firm what many believe: increas­ing renew­ables will bring down cus­tomers’ elec­tric­i­ty bills.

With the EPA set to issue final rules this sum­mer for its Clean Pow­er Plan to cut pow­er plant emis­sions, there has been greater scruti­ny of the costs asso­ci­at­ed with increas­ing util­i­ties’ per­cent­age of renew­able pow­er sources, like wind and solar. Along with that scruti­ny have come oppos­ing claims about how these new reg­u­la­tions would affect cer­tain pop­u­la­tions, par­tic­u­lar­ly low-income fam­i­lies and senior citizens.

To answer this ques­tion, DBL Investors com­pared the 10 states with the most and the 10 states with the least renew­ably-sourced ener­gy against the nation­al aver­age. What DBL Investors found was that states with the high­est per­cent­age of renew­ables actu­al­ly saw the small­est increase in their elec­tric­i­ty costs over a 10-year peri­od. Mean­while, states with the least renew­able ener­gy paid sig­nif­i­cant­ly more than aver­age. Notably, both Ten­nessee and South Car­oli­na are in the bot­tom 10 states.

This find­ing refutes the claim made by indus­try oppo­nents of the Clean Pow­er Plan that requir­ing reduced emis­sions and increased renew­able ener­gy sources will dri­ve up elec­tric­i­ty costs, par­tic­u­lar­ly for those least able to pay.

As clean ener­gy takes off, it is crit­i­cal to under­stand how elec­tric­i­ty prices have fared,” wrote the report’s authors, Nan­cy Pfund and Anand Chhabra. “On aver­age, states that have led on renew­ables over the past ten years have had cheap­er aver­age retail elec­tric­i­ty than both the nation­al aver­age and states that lag ingener­a­tion from renewables.”

The full report from DBL Investors, a San Fran­scis­co-based ven­ture cap­i­tal firm spe­cial­iz­ing in renew­able ener­gy, is avail­able here.