| Vol. 8 | No. 1 | March 2006 |
 |
Dialogue
Can renewable electricity standards do anything to lower my electricity and heating costs? |
Though the cost of electricity generated from the sun, wind, plant matter, and other renewable resources has dropped 80 to 90 percent over the last two decades (and continues to decrease), it is still a bit more expensive on average than electricity generated from fossil fuels. This does not mean, however, that increasing an electric utility's use of renewable resources—as required by renewable electricity standards—will lead to higher costs for consumers. In fact, it can actually help lower costs over the long term.
Electricity and heating costs are rising throughout the United States primarily as a result of natural gas prices, which have tripled compared with historic levels due to growing demand, declining domestic production, and hurricane damage. Increasing our supplies of renewable energy would create competition for traditional power plants, helping reduce the demand for—and price of—natural gas. The slightly higher costs associated with renewable energy generation would therefore be offset by lower natural gas prices.
The U.S. Department of Energy has found that for every one percent decline in demand for natural gas, long-term prices can decline as much as two percent. So the more renewable energy reduces natural gas demand, the greater the benefits for consumers.
To learn more about renewable energy policy, visit the Clean Energy section of the UCS website.
Also in this issue of Earthwise:
Close to Home
A Hybrid Story
