Sustainable Energy
Do Renewables Really Push Up Power Prices? What the Data from the US, Europe and India Actually Shows
An extensive analysis of electricity markets across the United States, the European Union, Australia, and India shows that high penetration of wind and solar is not associated with higher power prices
For more than a decade, a familiar argument has echoed through political speeches and policy debates: wind and solar power are unreliable, require costly backup systems, and ultimately make electricity more expensive. From Washington to Westminster, critics of clean energy have repeatedly framed renewables as an economic burden rather than a solution.
But a growing body of real-world data tells a very different story.
An extensive analysis of electricity markets across the United States, the European Union, Australia, and India shows that high penetration of wind and solar is not associated with higher power prices. “In many cases, it is linked to below-average electricity costs, directly challenging the claim that renewables drive up consumer bills,” according to an analysis, titled The myth of renewables pushing up power prices, by Zero Carbon Analytics.
The claim versus the evidence
Opponents of renewable energy often argue that variable sources like wind and solar require “parallel systems” of fossil-fuel backup, making the overall grid more expensive. This argument has been voiced at the highest levels of politics.
In a September 2025 speech to the United Nations, US President Donald Trump described wind power as the “most expensive energy ever conceived” and said renewables are “unreliable” and “too expensive.” Similar claims have been made in the UK, where Conservative Party leader Kemi Badenoch argued that renewables and decarbonisation policies are “driving up the cost of energy” .
However, when electricity prices are examined alongside generation data, these assertions do not hold up.
“Claims that renewables drive up total costs are unsubstantiated when looking at hard data from numerous markets,” the report notes. In regions leading the transition to wind and solar, end-user electricity prices have “in most cases not climbed any faster than in places still more dependent on fossil fuels”.
Renewables versus fossil fuels: a cost reality check
At the level of generation economics, the advantage of renewables is already clear. According to the International Renewable Energy Agency (IRENA), nine out of ten new grid-scale renewable projects in 2024 produced electricity more cheaply than the cheapest new fossil-fuel alternatives.
Onshore wind now has the lowest average levelised cost of electricity (LCOE) globally at USD 0.034 per kWh, followed by solar photovoltaics at USD 0.043 per kWh. Power from new onshore wind farms is 53% cheaper than the most affordable fossil-fuel-based alternatives, IRENA reports.
Crucially, renewables paired with battery storage are also approaching cost parity with fossil fuel generation in key markets—undermining the argument that intermittency automatically means higher system costs.
The United States: cheaper power where renewables lead
In the world’s largest electricity market, the data is striking. Most US states with above-average shares of wind and solar in their electricity mix also have below-average residential power prices.
In the first nine months of 2025, three states—Iowa, South Dakota and New Mexico—generated more than 50% of their electricity from wind and solar. All three had household electricity prices below the national average. Among the ten US states with the lowest residential electricity tariffs, seven have above-average renewable integration, including Oklahoma, one of the country’s wind power leaders. The few exceptions—Louisiana, Arkansas and Washington—reflect local market dynamics rather than renewable costs.
California and Hawaii are often cited as counter-examples: both have high renewable shares and high electricity prices. But the report stresses that renewables are not the main driver.
In Hawaii, high prices stem largely from reliance on expensive imported petroleum. In California, electricity bills are pushed up by “significant and increasing wildfire-related costs” and grid infrastructure spending, according to the state’s Legislative Analyst’s Office .
Notably, despite these high absolute prices, electricity price inflation in both states has been well below the national average in 2025. While US residential prices rose 4.9% year-on-year, prices in California remained flat even as wind and solar shares increased by 5.8 percentage points. In Hawaii, residential prices fell 6.6% as renewable penetration rose further.
A separate study by Lawrence Berkeley National Laboratory reinforces this picture, finding that US power generation costs declined in real terms between 2019 and 2024, with rising bills driven instead by grid upgrades, supply-chain constraints and climate-related damage—not renewables.
Europe: breaking the link between gas and power prices
In the European Union, where the energy transition is further advanced, the relationship between renewables and prices is even clearer.
Most EU countries with above-average shares of wind and solar have below-average household electricity prices (pre-tax). Denmark, a global leader in variable renewables, exemplifies this trend.
The reason lies in how electricity markets work. In Europe, wholesale prices are set by the most expensive generator needed at any given moment—often fossil gas. In 2022, gas set day-ahead electricity prices around 60% of the time, despite supplying only 20% of electricity, according to the International Energy Agency (IEA).
As wind and solar expand, fossil fuels are needed less often, reducing their ability to dictate prices.
Spain offers a powerful case study. Wind and solar accounted for 44% of Spain’s electricity generation in the first half of 2025, compared to 31.4% across the EU. As a result, fossil fuels set Spanish power prices only 19% of the time, down from 75% in 2019. Spain’s wholesale electricity prices were 32% lower than the EU average during this period.
These savings reached consumers. Spanish households paid an average of EUR 0.18 per kWh, 13.1% below the EU average in early 2025.
The IEA estimates that EU consumers saved around EUR 100 billion between 2021 and 2023 due to new wind and solar replacing expensive fossil fuel generation—and that savings could have been 15% higher with faster deployment.
India: early transition, emerging signals
India’s power system remains dominated by coal, which supplied 73.6% of electricity in 2024, according to Ember. At this stage, the report finds no clear nationwide relationship between renewable penetration and power prices, largely because many states still have negligible wind and solar capacity.
However, early signals are emerging. In Rajasthan, where renewable deployment is more advanced, the average price paid by distribution utilities is below the national median.
A peer-reviewed study in the journal Energy Policy suggests that rising renewable integration in Madhya Pradesh could reduce power purchase costs by up to 11%, with savings increasing as demand grows and technology costs continue to fall.
Australia: complexity, but clear daily signals
Australia presents a more complex picture. In the third quarter of 2025, renewables-laggard Queensland recorded the lowest wholesale prices, while renewables-leader South Australia recorded the highest.
But the report stresses that South Australia’s high prices predate its energy transition, which only accelerated around a decade ago. Structural issues—such as a concentrated market for “on-demand” electricity and limited transmission—play a major role.
Daily data tells a different story. When wind and solar make up a large share of South Australia’s electricity mix, prices tend to fall. On days when renewables exceed 85% of generation, wholesale prices sometimes turn negative, reflecting abundant low-cost supply.
Looking ahead, Australia’s Energy Market Commission expects national residential electricity prices to fall by around 5% by 2030—but warns that prices could rise again if renewable deployment slows.
What the global data really says
Across markets with vastly different political systems, grid structures and fuel dependencies, one pattern is consistent: renewables are not driving up electricity prices.
“There is ample evidence that renewables have shielded consumers from energy price spikes during global crises,” the report points out. With the cost of wind, solar and battery storage continuing to fall, countries have an opportunity to build more resilient, affordable and stable electricity systems—provided supportive policy frameworks are in place
The myth that renewables make power expensive persists in political rhetoric. The data, however, tells a quieter but far more compelling story—one where clean energy increasingly acts as a buffer against volatility, rather than its cause.
Sustainable Energy
Can India Finally Turn Waste Into Fuel? INR 23,731-Crore CBG Push
India invests INR 23,731 crore on compressed biogas (CBG) to reduce fossil-fuel dependence, manage organic waste and strengthen energy security. With 217 plants commissioned and 339 under construction as of August 2026, the new GOBARdhan scheme aims to scale production nearly ten-fold—but can it overcome the infrastructure and feedstock challenges that have slowed the sector so far?
India is putting INR 23,731 crore behind an effort to make compressed biogas (CBG) a larger part of its energy system, with the government targeting nearly ten-fold growth in domestic CBG production by 2035-36. The GOBARdhan scheme will combine assured demand, price support, capital assistance, pipeline connectivity and credit guarantees to expand the industry.
The push comes as India remains heavily dependent on imported gas. The government says nearly 50% of the country’s natural gas requirement is met through imports, while about 55–60% of India’s LNG imports pass through the Strait of Hormuz. This dependence makes domestically produced alternatives more relevant to energy security.
From 5,000 Plants to 217
India’s CBG ambitions are not new. The Sustainable Alternative Towards Affordable Transportation (SATAT) initiative, launched in 2018, envisaged 5,000 CBG plants producing 15 million tonnes annually by 2023-24. The target was missed.
The sector has nevertheless grown. As of August 6, 2026, 1,908 CBG/Bio-CNG plants were registered, of which 217 had been commissioned and another 339 were under construction.
The numbers show both progress and the scale of the challenge: only a fraction of registered projects have reached operation, while hundreds remain under construction.
What is Different This Time?
The new scheme attempts to address one of the industry’s central problems: making CBG projects financially predictable.
City Gas Distribution companies will face a CBG blending obligation of 3% in 2026-27, 4% in 2027-28 and 5% from 2028-29 for CNG transport and domestic PNG. The government will also provide an administered CBG price of INR 2,110 per MMBTU, with a minimum ten-year horizon. Eligible greenfield projects can receive capital assistance of up to INR 2 crore per tonne per day of installed capacity.
The scheme also provides pipeline support and a credit guarantee mechanism, aimed at reducing infrastructure and financing barriers.
In other words, the government is trying to create not just more plants, but a predictable market for the gas those plants produce.
Where is the Industry Growing?
CBG development remains concentrated geographically. Uttar Pradesh is among the leading states, while Gujarat, Haryana, Karnataka and Maharashtra also have significant numbers of projects. The new scheme could allow these existing hubs to expand while opening opportunities in states with large agricultural and municipal-waste streams but limited CBG infrastructure.
Kerala illustrates the latter challenge. The state recently moved into the sector with the Brahmapuram CBG plant in Kochi, commissioned in February 2026 and designed to process 150 tonnes of source-segregated biodegradable municipal waste every day.
This points to one of CBG’s central propositions: waste that would otherwise require disposal can become both fuel and a source of organic manure.
The Waste-to-Energy Opportunity
CBG can be produced from agricultural residue, cattle dung, press mud and biodegradable municipal waste. The process also generates organic fertiliser, potentially creating an additional revenue stream for producers.
But the availability of biomass alone does not guarantee a viable plant. Feedstock must be collected, transported, stored and supplied consistently. This is particularly important for agricultural residues, which are seasonal and geographically dispersed.
The new scheme therefore includes provisions for feedstock mapping and aggregation infrastructure, alongside a district-level challenge fund.
What Does the Government Expect?
The government estimates that the scheme could displace 10 million tonnes of fossil fuel over the next decade and generate around 40,000 crore rupees in foreign-exchange savings. It projects an additional 75,000 crore rupees contribution to GDP, more than 1.5 lakh jobs, over 40 million tonnes of CO₂-equivalent emissions avoided, and production of more than 250 million tonnes of organic fertiliser. These are government projections, not realised outcomes.
The projections underline the government’s broader ambition: CBG is being positioned not simply as an alternative fuel, but as a link between energy security, waste management, agriculture, employment and emissions reduction.
The Implementation Test
India now has a growing pipeline of CBG projects, a policy-backed market and financial incentives. But its earlier experience shows that ambitious targets do not automatically translate into operational plants. The success of GOBARdhan will ultimately depend on whether developers can secure reliable feedstock, obtain financing, connect plants to gas markets and operate them sustainably.
India has no shortage of organic waste. The challenge is turning that resource into a reliable, commercially viable and geographically widespread source of renewable gas.
Sustainable Energy
Can Floating Solar Help India Expand Renewables Without More Land?
India’s new Pradhan Mantri Surya Sarovar Yojana aims to add 5,000 MW of floating solar capacity by 2030–31. By using reservoirs and other water bodies, the scheme could help expand renewable energy while easing pressure on scarce land. Its battery-storage requirement also aims to make solar power more reliable and useful during peak demand.
India is adding solar power rapidly. But as more panels are installed, another question is becoming harder to ignore: where will all of them be installed? Floating solar offers one possible answer. Large ground-mounted solar projects require vast, contiguous parcels of land. This is easier in states such as Rajasthan and Gujarat, which have abundant land and high solar radiation. But the model is harder to replicate in densely populated, land-constrained states such as Kerala.
The Union Cabinet’s approval of the Pradhan Mantri Surya Sarovar Yojana, a ₹5,070-crore scheme, seeks to address this constraint by expanding solar generation to reservoirs and other water bodies. The programme will provide central financial assistance of up to ₹1 crore per MW for floating solar projects and aims to add 5,000 MW by 2030–31. It will be implemented by the Solar Energy Corporation of India (SECI). India currently has only around 0.7 GW of installed floating solar capacity, despite an estimated potential of 102 GW.
How Is This Beneficial for Small States?
India’s solar expansion has been concentrated largely in Rajasthan and Gujarat, where large areas of relatively inexpensive land and strong solar radiation have supported utility-scale projects. But land acquisition can involve rehabilitation and resettlement, while large solar parks can compete with agriculture and other land uses.
Floating solar offers another option: generating electricity from suitable water surfaces without occupying large areas of land. This could be particularly relevant for states with limited land availability. Kerala, for example, faces much greater competition for land from settlements, agriculture and infrastructure than states with large open tracts.
But not every reservoir can become a solar park. Water bodies have multiple uses, including drinking water, irrigation, fisheries and power generation. Projects would therefore need careful site selection and environmental assessment.
Addressing The Storage Dilemma
The programme does not stop at adding solar panels. Projects receiving support will have to include battery energy storage equivalent to at least two hours of generation. Across the programme, this is expected to amount to around **10,000 MWh of storage. That addresses another challenge facing India’s renewable-energy transition.
Solar generation peaks during the day, while electricity demand can remain high into the evening. Batteries can store excess solar power and release it when demand rises. Storage could also reduce renewable-energy curtailment, when available electricity is not used because the grid cannot absorb all the generation. The scheme therefore combines two priorities: adding renewable capacity and making that power more useful to the grid.
The 278-MW Omkareshwar floating solar park on the Narmada River in Madhya Pradesh’s Khandwa district is currently the country’s largest floating solar project. Plans are in place to scale it up to 600 MW. However, the project does not have on-site battery storage. The new scheme could encourage a different model, where floating solar and storage are developed together from the beginning.
But Water Is Not Empty Space
Floating solar can ease pressure on land, but it comes with its own environmental and technical questions. Large installations can affect aquatic ecosystems, water quality, fisheries and other uses of reservoirs. The technology can also be more expensive and technically complex than ground-mounted solar. This makes site selection critical. The question is not simply how much floating solar India can install, but where it can be installed without creating new environmental or social costs.
A New Option For India’s Energy Transition
The government’s 5,000-MW target is small compared with India’s estimated 102 GW floating solar potential. But the scheme could help move the technology from a niche application towards a larger role in India’s renewable-energy system. Its significance lies elsewhere.
India’s renewable transition is increasingly about where clean-energy infrastructure can be built and how the electricity can be delivered when it is needed. Floating solar could help address both challenges — using suitable water surfaces to reduce pressure on scarce land while pairing solar generation with storage.
For land-constrained states such as Kerala, that could open another avenue for renewable-energy expansion. Nationally, the scheme could help India find new spaces for clean energy — without assuming that every available piece of land must become a solar park.
Sustainable Energy
India’s Power Grid Gets Greener: Green Energy Break a New Record
India’s solar and wind energy crossed the 100 GW mark for the first time, supplying nearly half of the country’s electricity at one point. The milestone highlights the growing role of renewables in meeting India’s rising power demand—and the storage challenges that could shape the next phase of the energy transition.
As India grappled with another summer of soaring electricity demand, the country’s power grid quietly reached a milestone. For the first time, solar and wind together generated more than 100 gigawatts (GW) of electricity, supplying nearly half of the country’s power at one point.
According to Grid Controller of India Ltd. (GRID-INDIA), utility-scale solar and wind generation reached 103.7 GW at 12.05 pm on July 13, the highest recorded so far. A few minutes later, the two sources supplied 42.79% of the electricity flowing through the national grid. The following day, generation crossed the 100 GW mark again, showing that the achievement was not a one-off event.
The record comes at a time when rainfall has been lower than usual. According to the India Meteorological Department (IMD), the southwest monsoon is expected to bring about 90% of the country’s normal rainfall this year. With lower inflows into reservoirs, hydropower generation can come under pressure, making solar and wind even more important in meeting electricity demand.
The achievement signals a broader shift. Renewable energy is no longer just expanding on paper through new projects—it is increasingly helping power homes, businesses and industries during periods of high demand.
Solar and Wind Energy: India’s Growing Demand for Electricity
India’s appetite for electricity continues to grow.
According to Power Minister Manohar Lal, the country’s peak electricity demand has already reached about 271 GW this year. The government expects it to touch around 300 GW by 2027, driven by rising use of air conditioners, electric vehicles, data centres and industrial activity.
Meeting that demand has traditionally meant relying on coal-fired power plants. This year, however, solar and wind energy has played a larger role. According to GRID-INDIA, solar generation reached a record 81 GW during the April heatwave, helping ease pressure on conventional power plants during the middle of the day.
The International Energy Agency (IEA) expects India to remain one of the world’s fastest-growing renewable energy markets through the rest of the decade. But it also warns that investment in electricity grids and storage must grow alongside renewable energy.
The Challenge Begins After Sunset
The July record was achieved around noon, when solar panels generate their highest output. Electricity demand, however, often remains high long after sunset.
That is why many experts say the next phase of India’s clean energy transition will depend less on building more solar parks and more on storing the electricity they generate.
“The achievement shows the national grid can absorb much larger volumes of renewable electricity than before. The next priority is expanding energy storage so surplus solar power generated during the day can be supplied after sunset,” said Shreya Jai, Energy Lead at Climate Trends.
Solar Energy and Storage Challenges
Research points in the same direction. A recent study by researchers from the University of California, Berkeley, the India Energy and Climate Center and partner institutions found that expanding battery storage and making the grid more flexible would allow India to integrate much larger shares of solar and wind while maintaining a reliable electricity supply.
Disha Aggarwal, Fellow at the Council on Energy, Environment and Water (CEEW), said the milestone shows renewable energy is becoming a larger part of the country’s actual electricity supply, rather than just its installed capacity. She said the next priority should be scaling up energy storage, strengthening reserve capacity and creating electricity markets that can better support evening demand.
Storing renewable energy, however, remains one of India’s biggest challenges. Battery systems are still expensive, while pumped hydro projects require suitable terrain, long construction periods and multiple regulatory clearances. Expanding transmission networks to carry renewable power from generation centres to demand hubs is another hurdle.
Crossing the 100 GW mark shows that India can generate renewable electricity at an unprecedented scale. The bigger challenge now is ensuring that clean power generated during the day can be stored and delivered when homes, hospitals and industries need it most.
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