The Magazine of The Sierra Club
Hey Mr. Green, How Much Does Clean Energy Cost?
Illustration by Little Friends of Printmaking
Hey Mr. Green,
How does the cost of building and operating wind farms and solar power plants compare with that of conventional power plants?
—Allan in Austin, Texas
Construction costs for wind farms and solar power plants are higher today than for natural gas or coal power plants. But if you consider annual operating costs over 30 years, solar and wind can be cheaper in the long run. Below are the latest federal cost estimates for plant construction. I also show what the share of annual operating costs would be for an average U.S. residence, which uses about 10,900 kilowatt-hours a year.
| POWER PLANT/FARM | CONSTRUCTION COST ($/kW) | ANNUAL OPERATING COST PER HOUSEHOLD |
| Solar (photovoltaic) | $2,500 to $3,900 | $30 |
| Wind (onshore) | $1,760 to $2,200 | $50 |
| Coal | $2,900 to $6,600 | $85 to $200 |
| Natural gas | $680 to $2,100 | $120 |
| Nuclear | $5,500 | $150 |
Solar and wind costs are lower over time mainly because the fuel is free. And the cost of renewable energy technology, particularly photovoltaic solar, has plummeted to historic lows. In January, Deutsche Bank predicted that solar power will reach "grid parity"—be able to produce electricity for the same cost as traditional technologies—in up to 80 percent of the global electricity market by 2017. But natural gas is so cheap now, thanks to fracking, that natural gas plants compete against renewables. Whether that lasts depends on a host of ongoing questions about fracking's safety and regulation.
