by Dan Roscoe, President of Renewall
As fossil fuel prices remain unpredictable and the costs of wind and solar energy continue to decline, both businesses and homeowners are recognizing that renewables offer not only a cleaner future but also a more affordable present. This article examines the key cost factors, demonstrating that in 2025, renewable energy isn't just competitive—it is the smarter financial decision.
When comparing energy sources, assessing cost involves more than a single price tag. Several critical factors determine the true affordability of renewables versus fossil fuels.
LCOE serves as the standard metric for comparing energy costs. It calculates the total cost of building and operating a power plant over its lifetime, divided by the amount of electricity it generates. Over the past decade, renewables have experienced significant reductions in LCOE. The cost of solar and wind energy has decreased by more than 80%, making them more affordable than coal, gas, and even some nuclear power plants. In many regions, and in some regions, the LCOE for wind and solar is now below $40 USD per megawatt-hour (MWh), whereas new natural gas plants range between $50 USD to $100 USD/MWh, depending on fuel prices.
Capital and Operating Costs
Building a wind or solar farm requires substantial initial investment. However, the long-term costs are considerably lower than those of fossil fuel power plants. Renewable energy sources do not incur ongoing fuel costs, and their maintenance requirements are minimal compared to coal or gas plants. In contrast, fossil fuel plants necessitate continuous fuel purchases, equipment maintenance, and compliance with increasingly stringent environmental regulations, all of which escalate costs over time.
Oil and gas markets are notoriously unstable. Supply chain disruptions, geopolitical tensions, and fluctuating global demand contribute to unpredictable costs for fossil fuel-generated electricity. Conversely, wind and solar energy have no fuel costs, resulting in stable electricity prices that can remain consistent for decades. This stability allows businesses and consumers to benefit from fixed rates, insulating them from energy market shocks.
Technological advancements and economies of scale have driven renewable energy prices down faster than anticipated.
Solar and Wind Cost Trends (2020-2025)
The cost of solar panel production continues to fall due to improved manufacturing processes and widespread adoption. Similarly, wind turbine advancements have led to larger, more efficient models capable of generating more electricity at lower costs.
Energy Storage and Grid Integration
One longstanding criticism of renewables has been their variability. However, in 2025, this argument is becoming outdated. The costs of lithium-ion batteries have dropped by over 85% since 2010, making large-scale energy storage more feasible. Additionally, artificial intelligence-driven grid management systems optimize energy distribution, reducing waste and maximizing reliability.
Governments worldwide are accelerating the transition to renewable energy through supportive policies. Subsidies and tax credits for solar and wind power make renewable investments increasingly attractive. Moreover, the implementation of carbon pricing is raising the cost of fossil fuels, thereby enhancing the competitiveness of renewables.
While fossil fuels may appear cost-competitive at times, they entail hidden costs that impact businesses, governments, and individuals.
Environmental and Health Costs
Air pollution from coal and gas plants leads to billions of dollars in healthcare expenses. Additionally, the costs associated with climate change mitigation—from rising insurance rates due to extreme weather events to disaster recovery efforts—are becoming significant financial burdens.
Infrastructure and Fuel Costs
Fossil fuel infrastructure is aging, with many coal and gas plants requiring costly upgrades to remain operational. Furthermore, expenses related to fuel transportation, including pipelines, shipping, and rail, add long-term costs that renewables do not incur.
The Risk of Stranded Assets
As the global community transitions away from fossil fuels, investments in coal and gas plants are becoming financial risks. Utilities and businesses are moving away from fossil fuels to avoid being left with obsolete infrastructure. Financial institutions are also divesting from fossil fuels, recognizing that renewable energy presents a more stable long-term investment.
Several nations have already demonstrated that renewables are the most affordable energy source. For instance, Germany and the United Kingdom have seen wind and solar energy outcompete fossil fuels, leading to low electricity prices. China, as the world's largest solar producer, has driven down global costs, making renewables more accessible worldwide.
Large corporations are also making the switch to renewable energy, not just for sustainability but for financial reasons. Companies like Amazon, Apple, and Google have committed to 100% renewable energy, citing cost predictability and long-term savings. Locally, businesses in Nova Scotia are recognizing that securing predictable renewable rates is a prudent economic decision.
The evidence is compelling: renewable energy is now the most affordable, stable, and future-proof electricity option. Both LCOE and operational costs favor renewables over fossil fuels. Fossil fuels remain subject to volatile prices and hidden environmental costs. Technological advancements and supportive policies will only continue to enhance the affordability of renewables.
For governments, businesses, and homeowners, the message is clear: investing in renewables today is not just about sustainability—it is about financial stability. By making the switch, Nova Scotians can secure lower costs, predictable pricing, and a future powered by clean, locally generated energy. It is time to embrace a smarter, more affordable energy future.
Start your transition with Renewall today.
