Do household energy expenses outweigh the cost of renewable energy?
Most people know that making the switch to a clean energy plan or investing in renewable energy solutions can help protect the environment by reducing greenhouse gas emissions and slowing the pace of climate change. Yet, many consumers are hesitant to make the switch, often assuming choice is limited and plans expensive.
Times have changed.
Investing in clean energy could not only help you reduce household energy costs by an average of $500 annually, the long-term benefits of a clean energy solution far outweighs the initial investment and any price difference you might encounter. Technology is making the initial investment in clean energy infrastructure less expensive and clean energy generators and suppliers, like Energy Harbor, are offering more and more plans comparable to – and competitive with – traditional energy and electricity rates generated from fossil fuels.
Does clean energy cost more than fossil fuels?
While several factors come into play when comparing clean energy prices, such as location, regulatory environment, and available incentives, recent advances in technology, increased investment in clean and renewable energy, and the Inflation Reduction Act have hastened the affordability of renewable energy and lowered the cost of clean energy.
The ICF Climate Center, a global consulting firm, calls the Inflation Reduction Act “a dense piece of legislation” with an “impact on the energy sector [that] can be summarized succinctly: clean energy economics just got a whole lot better.”
The costs of renewable energy resources, like sunlight and onshore wind, which are abundant, free and do not require expensive components like transportation and storage, have been steadily decreasing. Associated costs for solar power, for example, have dropped by more than 55% over the last five years, according to Solar Energy Industries Association, and the U.S. Energy Department reports that, by 2030, solar could cost as little as $26 per MWh, down between 20% to 35%. In its report Renewable Power Generation Costs in 2021, the International Renewable Energy Agency (IREA) reported that renewable energy costs less than the cheapest coalfired options in several countries across the globe. And, Francesco La Camara, Director-General of the IREA, called renewables “the cheapest source of power.”
Then there’s clean energy from nuclear power, which can more effectively compete with fossil fuels in terms of capacity and costs. “If carbon pricing is factored in, it drops even lower, making nuclear an economical long-term choice,” explains analyst firm Canada West Foundation. “Exponentially less fuel is needed than coal or gas to generate comparable wattage, [and nuclear power is] also reliable, which makes it valuable for the money.”
So is clean energy more expensive? When you include savings through incentives, tax credits, grants, and subsidies that promote clean energy technology adoption, you can see how clean energy is quickly becoming more economical to generate.
What does this mean for individual households?
Although clean energy plans were once sold at a premium, those prices are quickly becoming a thing of the past. As generation capabilities and priorities continue to transform, and as demand for carbon-free energy grows in tandem, chances are great future prices will go from comparable to competitive to unbeatable.
What’s the difference between renewable energy and clean energy?
You’ll often hear people talk about clean energy and renewable energy interchangeably, but there are small differences between the two.
- Renewable energy, also called green energy or green power, refers to energy that comes from natural resources, such as small hydro, solar and wind. There’s an infinite supply of these resources and since they produce very little to no carbon emissions, all renewable resources are considered “clean.”
- Clean energy, also called sustainable energy, refers to all energy produced with little to no greenhouse gas emissions (GHG). It’s the umbrella term for energy generated from low-carbon and carbon-free energy sources. This includes all renewable energy resources as well as non-renewable energy sources such as nuclear.
All sources of renewable energy are also considered sustainable. While nuclear energy is not always considered renewable, it is widely considered sustainable due to its lack of pollution and abundant supply.
4 sustainable choices that can lower household costs
Making the switch to a clean energy plan might help lower energy bills, but savings don’t stop there. Consumers who adopt the clean energy mindset can save in other ways as well. Here are four ways to do that:
1. Invest in an electric vehicle
Consumers who trade gasoline powered cars for electric vehicles (EVs) will say goodbye to oil changes and engine maintenance (since there isn’t one in an EV). And with fewer parts to wear down over time, maintaining an EV costs about half as much per mile as a gas guzzler. Not ready for an EV? Even a hybrid vehicle will help you save money and reduce your carbon footprint.
2. Switch to electric appliances
While the overall cost to operate both natural gas and electric appliances remains about the same today, electric appliances are becoming less expensive to operate as renewable and clean energy choices overtake natural gas fuel prices. Plus, tax incentives make transitioning from natural gas to electric easier, too, by lowering the overall investment in new appliances.
3. Install an electric heat pump
Households that switch from a traditional furnace or resistance heater to an electric heat pump can save hundreds of dollars a year, according to the U.S. Department of Energy. By transferring heat instead of converting it from fuel, electric heat pumps provide up to three times more heat to a home than the electrical energy it consumes, reducing overall costs.
4. Upgrade windows, doors and more
Want to save even more? Consider these energy efficient upgrades:
- Replace single-pane windows with dual-pane windows
- Ensure your home is properly insulated
- Choose steel doors to prevent conditioned air from escaping
- Install a smart thermostat
- Pick water conservation bathroom fixtures
While they may seem like small steps, collectively they can have a big impact on energy savings.
Create your own clean energy system and save even more
If you choose to generate renewable electricity for your home by installing solar panels or a residential wind turbine, you can save even more. As your energy system produces power, it will reduce the need to pull electricity from the grid, lowering your electricity bill – sometimes significantly. In fact, if you produce more clean energy than you can use, you may be able to make money by selling it back to the grid.
Like electric vehicles, solar panels and wind power turbines are built with fewer moving parts – solar panels have none – and thus require far less maintenance compared to traditional energy systems. A solar panel array, for example, can work almost maintenance free for more than 25 years, according to experts.
Household savings that might surprise you
Clean energy savings extend beyond your electric bill. By helping reduce greenhouse gas emissions, your investment also reduces environmental impacts brought on by GHGs and climate change, like air pollution, volatile weather patterns, wildfires and more. That impact extends to personal savings in the form of reduced health care expenses, household insurance premiums, and more.
How to compare clean energy rates
To compare clean energy options, start by reviewing your current energy budget. If you know what your cost of electricity and natural gas is – as well as how that price is determined – you can make a more informed decision when choosing a clean energy rate.
Once you find the clean energy supplier that matches your needs and your budget, making the switch is easy. In fact, your new supplier will manage the entire process for you.
Ready to see what clean energy rates Energy Harbor has to offer?