Is Renewable Energy Truly Costly?

The argument against renewable energy usually comes down to the assertion that it’s just too expensive. But I have learned that this argument too often relies on scary and inflated cost estimates that don’t stand up to scrutiny.

When Delaware was debating the Bluewater Wind project, the opponents of wind power offered big estimates of the so-called green premium we would be forced to pay if the project went forward. One prominent legislator spoke darkly of electric bills going up by as much as $75 a month. As it turned out, the final Public Service Commission estimate of the cost of the Bluewater Wind project was 0.07 cents a kilowatt hour, which would come to not much more than a dollar a month for the average Delaware household using 1,550 kilowatt hours a month.

Why rehash this old argument? Because we’re hearing it again.

Last week, opponents of renewable energy lobbied hard for a bill to end Delaware’s participation in the Regional Greenhouse Gas Initiative (RGGI). The Caesar Rodney Institute and the 9/12 Delaware Patriots jammed a House hearing room arguing that RGGI cost too much and infringed on the rights of citizens.

Happily some well-prepared environmental advocates were on hand to set the record straight on the program’s costs and benefits. It turns out that RGGI, which opponent called “a threat to freedom and liberty,” costs the average household about 38 cents a month—about 0.285 percent of household electricity bills.

The cost of renewable energy policies may be minimal, but the benefits could be very large indeed. According to Delmarva Power’s Integrated Resource Plan (IRP), now before the Public Service Commission, the projected economic benefits of shifting from coal power to renewable energy are enormous: $1.8 billion to $4.3 billion in reduced health and mortality costs over the next ten years—roughly $2,000 to $4,750 for every Delaware resident.

The IRP’s estimated benefits includes the environmental impact of Delaware’s Renewable Portfolio Standard, the Energy Efficiency Resource Standard, the state’s participation in RGGI, the Bluewater Wind project, other renewable energy sources coming on line, and expected reductions in emissions from coal burning power plants in and around Delaware.

These projected benefits represent 12 percent to 30 percent of Delaware’s 2008 retail electricity sales—far more than the combined cost of Delaware’s renewable energy policies and programs. A look at the overall costs and benefits underscores the view that Delaware is on the right track in shifting to renewable energy.

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn

About the Contributor

Tom Noyes

Tom Noyes


  •  Great post! You have certainly become the “go to” guy on these matters.  You know your stuff.