Unit 2: Renewable Energy Use in Your Life
Section B: Comparing Renewable and Non-Renewable Energy Costs

The availability and use of energy resources influence the economic growth and well-being of society. Many occupations, businesses, and public services - such as utilities - result from the development and use of energy resources. The market price of energy includes the cost of energy resource exploration, recovery, refining, pollution control, distribution, and transportation, as well as taxes and other fees. Other costs that are not part of the market price of energy, called externality costs, are due to factors such as environmental damage, property damage, civil unrest, war, and health care. The rate of energy consumption is influenced by energy prices and externality costs. The cost of energy is a factor in Wisconsin's economic development and affects the household budget of Wisconsin citizens.

Wind is the least expensive renewable technology that we can develop on a large scale in Wisconsin. In 2015, wind power prices were just $0.025 per kilowatt-hour. By comparison, solar electricity is somewhat more expensive than wind. In 2015, the average price of electricity from residential solar rooftop systems was $0.12 per kilowatt-hour (source: US Energy Information Administration), while the cost for utility scale solar electric farms was $0.05 per kilowatt-hour (source: Lawrence Berkeley National Lab). This represented a 70 percent decline in power costs from solar electricity since 2009. Electricity produced from nonrenewable sources, like coal and natural gas, costs about $0.04 per kilowatt-hour to produce. The national average residential electric customer is billed at $0.124 per kilowatt hour.

When consumers consider purchasing a renewable energy system, they are often concerned about the payback. Payback refers to recovering the initial cost of purchasing and installing a renewable energy system through its production of energy. With the current prices of energy, some decentralized renewable energy systems will accomplish a full payback within their lifespan. Factors that influence payback include the type of technology, resource used, and location. If demand, production, and technological advances in renewable energy increase, equipment and installation prices will be reduced and the likelihood of payback will increase.

When comparing the cost of renewable energy to non-renewable energy, externality costs associated with non-renewable energy should be considered. Many occupations, businesses, and public services (such as utilities) result from the development and use of renewable energy resources. Most renewable energy sources are free. Therefore, development and production investments go toward materials and labor rather than purchasing fuel. This money is often spent within the United States and is frequently spent within the same state or town where the resource is located. Using renewable energy allows the United States to become more energy independent.


Read this example of a wind and solar system that is being used by homeowners who live near Lake Superior.


Go back to Section A: Benefits of and Barriers to Renewable Energy

Continue on to Section C: Green Energy Programs in Wisconsin