On the plains of West Texas, new wind farms can be built for just $22 a megawatt-hour. In the Arizona and Nevada deserts, solar projects are less than $40 a megawatt-hour. Compare those figures with the U.S. average lifetime cost of $52 for natural-gas plants and about $65 for coal.
Environmental rules and government subsidies are no longer the key drivers for clean power. Economics are.
That’s why Donald Trump will have limited influence on the U.S. utility industry’s push toward renewable energy, according to executives and investors. Companies including NextEra Energy, Duke Energy and others that invest billions in power plants are already moving forward with long-term plans to generate electricity with cleaner and more economic alternatives.
“We said before the election that whoever is elected president, we would be continuing our efforts to go to a low-carbon fleet and also pursue renewables,” said Tom Williams, a spokesman for Duke, the second-largest U.S. utility owner.
Wind and solar have been the two biggest sources of electricity added to U.S. grids since 2014 as utilities closed a record number of aging coal-fired generators.
And it’s not just cost that makes clean energy attractive to utilities — it’s time. A solar farm can go up in months. It takes years to permit, finance and build the giant boilers and exhaust systems that make up a coal plant, and they can last for a generation.
Over the next four years, utilities have announced plans to close 12 gigawatts’ worth of coal plants, largely because cheap natural gas has made them uneconomical — the equivalent of switching off a dozen nuclear reactors.
Trump will have some levers at his disposal to influence how they’ll be replaced. He has vowed, for instance, to kill President Obama’s Clean Power Plan, which would require states to reduce emissions from power plants. And two federal subsidies — the investment tax credit and the production tax credit — remain key components to making solar and wind affordable.
Trump hasn’t indicated whether he’ll push to repeal the tax credits for wind and solar. And the Clean Power Plan, which has been suspended pending a U.S. Supreme Court ruling, isn’t to take effect until 2022.
Utilities, meanwhile, are marching ahead.
“We are moving forward with plans that call for replacing some of our coal generation with natural gas, low-cost wind energy and expanding solar options for customers,” said Frank Prager, vice president of policy and federal affairs for Xcel Energy, which owns utilities in eight states.
More than half of U.S. states require utilities to incorporate renewable energy into their generation mix. California and New York have set goals to source half their power from clean energy by 2030.
Even if renewable energy loses West Wing support, it remains popular in corner offices across America.
“Wal-Mart will continue to build stores, and Apple will continue to build energy-intensive data centers that will be powered by renewables,” said Kyle Harrison, a Bloomberg New Energy Finance analyst.