Suddenly, inflation seems to be everywhere – including in our household energy bills. Consider:
- Gasoline prices have reached $3.50 per gallon, about 60% higher than a year ago.
- Home heating oil is expected to cost 41% more this winter.
- Natural gas used for home heating is expected to cost 30% more, and propane, 54% more, according to the U.S. Energy Information Administration.
- Meanwhile, global oil prices have topped $93 per barrel for the first time since 2014, putting added pressure on energy consumers all around the globe.
Don’t Blame Renewables!
So what gives? With renewables on the march and pressure building to end investments in fossil fuels, some business leaders and politicians put the blame for these recent energy price spikes squarely on renewables. They say the world is moving too fast to phase out traditional energy systems that drive the global economy, even though they make up the bulk of the world’s greenhouse gas emissions that cause global warming.
But nothing could be further from the truth. Here’s why:
- Price volatility in fossil energy markets is really of its own doing. Fossil fuels still make up more than 80% of the world’s energy supply, compared to less than 5% for wind and solar. There’s no “tail wagging the dog” here!
- Unlike fossil fuels, renewables have no variable fuel costs and very little price volatility. So, while fossil energy costs soared in 2021, renewable energy costs remained very stable – and low – compared to the others.
- At $3.50 per gallon, gasoline now costs twice as much as electricity, on average, to propel a vehicle the same distance down the road. And if solar is charging your EV, your vehicle’s fuel bill falls all the way to zero.
- On a life-cycle basis, solar power is now the “cheapest electricity in history,” with wind power not far behind, according to the International Energy Association. Because solar power is now on track to be 20-50% cheaper than previously thought, the IEA’s main energy scenario forecasts 43% more global solar output by 2040 than it projected just four years ago.
- And contrary to arguments that fossil fuels are being phased out too quickly, the world’s largest economies are still on track to produce more than double the amount of coal, oil and gas in 2030 than the limit required to hold global warming under 1.5°C relative to preindustrial levels. This “emissions gap” in fossil energy reductions needs to be filled with more renewables, not less.
Renewables Are an Inflation Hedge
Here’s the best part. Instead of adding inflation to home energy bills, renewable energy policies that aim to halve U.S. emissions by 2030 would save households an average of $500 a year in energy costs, according to a report from the Rhodium Group, a New York-based research firm.
And that doesn’t factor in adoption of electric vehicles, which would save consumers even more money. Researchers from University of California, Berkeley and Energy Innovation found consumers could save $1,000 per year per household, or a total of $2.7 trillion in 2050, by accelerating EV deployment in the coming decade.
So, when someone wants to debate the ongoing move to renewables and EVs, arm them with these facts. Whereas fossil fuels are subject to whipsaw price movements and shifts in global geopolitics, wind and sunshine will always be free and be able to put this vicious cycle of dependance on fossil fuels to an end. In the end, these investments in a renewable electricity future are really just a down payment that locks in ultra-low fixed prices for household energy bills for decades to come.
Solaflect is your home energy management partner.
We help you install clean and affordable solar electricity and home battery systems for a more resilient and climate-friendly future. Contact us, or email us or call (802) 649-3700. The power is in our hands to make a difference!