When it comes to wind and solar power, there isn’t a straight bottom line—it’s kind of wavy. Figuring out the economic costs and benefits of renewable energy presents challenges not found in the conventional energy sector.
One issue, for example, is that wind and solar have peaks and valleys of productivity, depending on whether or not the sun is shining or the wind is blowing. Building the transmission infrastructure to handle this is among the costs incurred by renewables.
Estimates of that cost range anywhere from $0.05 to $10 per megawatt-hour (MWh), according to Andrew Mills, a researcher at Lawrence Berkeley National Laboratory who led a 2016 study looking at the various planning processes across the country for integrating solar power into grids.
This illustrates how difficult it is to nail down the cost of even a single, physical aspect of setting up renewables. When it comes to trying to calculate the monetary value of more qualitative social and environmental aspects, it’s even trickier.
Economists can make renewable energy look like either an economic boon or a disaster, depending on which factors they decide to include.
And yet, public policy depends on such analyses.
Even a presidential executive order can only proceed if the Office of Management and Budget reviews cost-benefit analyses and determines that the benefits justify the costs.
