I came across the following chart (that looks like an overhead shot of the game, Ker Plunk!) very confusing) recently and wanted to share it because it is very telling regarding the tectonic shift that is taking place in the power generation industry.
The chart highlights the massive drop in the cost to produce electricity from solar – 89% in the last 10 years! The cost went from $359 to $40. Wind dropped quite a bit as well, from $135 to $41, a not too shabby decrease of 70%.
These two power sources are now so much cheaper than fossil fuels and nuclear to produce electricity. The cheapest fossil fuel, coal, is $109. That is over 270% more expensive than wind or solar. Just 10 years ago, the opposite was true. That is amazing progress.
We still have to improve our energy storage ability for times when there is no wind or sun, but these renewables are cost-effective now and will be providing a much bigger portion of our electricity needs going forward.
Please let me know if you have any questions.
Joe Baker, CFP®
Baker Asset Management, LLC
joebaker@bakerassetmanagement.com
