Sun and Wind Dominate New US Power Generation

In the early part of 2025, we saw a notable shift in US power generation, with solar and wind energy taking the lead. The Federal Energy Regulatory Commission (FERC) reported that 15 Gigawatts (GW) were added, breaking down to 11.5 GW from solar, 2.3 GW from wind, and 1.3 GW from gas. Figures like Stephanie Bosh from the Solar Energy Industries Association have praised this trend, claiming that solar energy is “faster and cheaper than any other source.” But can we take that at face value?

As we move toward a grid that increasingly relies on wind and sunlight, a closer look reveals some troubling realities. While renewable energy can lower electricity costs, there are hidden expenses that might jeopardize both reliability and affordability.

The core issue lies in the inconsistent nature of solar and wind. Solar doesn’t produce energy at night, and its output dwindles during early mornings and late afternoons, often struggling against cloudy or rainy conditions. Wind energy, while also intermittent, contributes unevenly, forcing the need for less efficient backup systems. It’s not just a matter of replacing fossil fuels like natural gas and coal; it’s also about how these renewable sources alter the dynamics of energy production.

Referring to fossil fuel backups as part of a renewable infrastructure might be misleading—it almost feels like mislabeling a starting pitcher in baseball for someone who only shows up when conditions are favorable.

When we look at the finances, hydrocarbons and coal, alongside natural gas plants, account for a large portion of operational costs, sometimes up to 75%. This means that to lower prices, utilities may need to hike rates. Interestingly, during peak production, renewable sources can temporarily decrease wholesale prices, yet those prices reflect the subsidized nature of renewables, not necessarily their overall value. In environments where renewables dominate, they can even secure the highest rates.

However, the costs associated with peaker plants—those that kick in during high demand—are a concern. In regions where the wind and sun are abundant, such as California, energy prices can soar to around 30 to 35 cents per kilowatt-hour. This is roughly double the national average, even as renewables supply a substantial portion of the grid. Comparatively, prices in Germany and other regions further highlight the financial burden imposed by such transitions.

These ambitious energy shifts often reveal misconceptions. While wholesale prices may dip with increased renewable contributions, those savings are masked by rising retail costs linked to taxes, subsidies, and grid enhancements.

In California, the demand from electric vehicles and data centers further complicates the energy landscape. This intermittent demand adds stress, leading to more frequent use of peaker plants, which are often inefficient and can increase overall costs for consumers.

For grids that rely on dependable sources like hydro, nuclear, gas, and coal—essentially dispatchable sources—there is a need to reduce reliance on peaker plants. These sources can adjust more predictably, addressing peak demands without the unpredictability associated with renewables. Hydro and nuclear provide steady power, while fossil fuels can ramp up as needed.

Yet, solar-heavy areas often find peaker plants underutilized. For example, California’s systems show that these plants are only active a limited percentage of the time. Introducing more renewable energy leads to an increase in both costs and the need for additional peaker plants, which unfortunately undermines the environmental benefits we hope to achieve.

On top of this, transmission expenses contribute to the overall issue. Many renewable installations are situated far from where energy is consumed, necessitating investment in expensive high-voltage power lines. These costs can add significantly to overall energy prices.

Looking ahead, the US estimates a $450 billion price tag for integrating renewables by 2035, potentially adding at least 2 cents to the rate per kilowatt-hour. For countries like Germany, the necessary upgrades could similarly elevate costs. The narrative that renewables are “cheap” often overlooks these hidden expenses.

While FERC predicts a significant increase in grid capacity in the coming years, concerns over reliability and rising costs remain prevalent. As ambitious policies are pursued, it’s imperative we take an honest perspective on our energy landscape. Ignoring the limitations of wind and sunlight could lead to increased power outages and transportation prices.