Energy Innovation researchers conducted interviews with industry experts and analyzed publicly accessible data to understand recent renewable price data trends. Wind, solar, and hybrid projects continue to find ample market value at or around these prices nationwide. Recent price fluctuations result from a combination of short-term and enduring trends.
Several factors are driving recent inflation in the power sector and specifically for renewable energy. These include supply chain disruptions, trade issues, and raw material prices. Rising interest rates and labor constraints have also complicated the landscape, affecting clean energy project financing and development. Moreover, interconnection costs, transmission constraints, and project
delays have slowed industry growth.
Ultimately, the forces driving cost increases are already abating and that the overarching trend of economies of scale for renewable energy and storage will continue to lower costs. Furthermore, fossil fuels are not a refuge from rising prices: The same near-term trends driving inflation in the wind and solar industries are largely present in other industries, including fossil fuel extraction and infrastructure construction. Policymakers can deploy several tools to reduce overall costs by ensuring clean energy resources encounter lower risk and lower the future costs of clean electricity resources.
Access the paper “Tools for Energy Regulators to Manage Power Sector Inflation” here
