Let’s Pay $2,500 More for Our Electricity

...Let’s Pay $2,500 More for Our Electricity

We could be paying at least $2,500 more per year for our electricity if we add wind and solar to the grid. This would be the result if we followed Germany’s example with its increased use of wind and solar.

Today, the average American family uses 10,800 kWh of electricity per year, and, at 12 cents per kWh, spends  $1,290 for it.

The average German will spend $3,810 for the same amount of electricity.

So far, only 22% of Germany’s electricity came from wind and solar in 2017. How much more will Germans pay when even more wind and solar are added to its grid as the result of Germany’s Energiewende, i.e. transition, program?

Chart from Clean Energy Wire, Anna-Louisa-Karsch-Str. 2, 10178, Berlin

The price of electricity in Germany has more than doubled since 2000.

The accompanying chart shows that the price of electricity, in €-ct per kWh, doubled from 2000 to 2013. It was over 30 €-ct per kWh in 2017.

Chart is from, Energy Costs in Germany and Europe,
by Prof. Dr. Andreas Löschel Westfälische Wilhelms‐University Münster

Even Germans are beginning to object. 

At an EU meeting on June 11, 2018, Germany’s Energy Minister, Peter Altmaier, objected to a proposal by other EU countries to increase renewables across the EU to 33-35% by 2030. He said, “Our share has to be more than doubled,” and “the current cost [for Energiewende] to German tax payers is over $29 Billion dollars per year.”

In spite of all the money spent on wind and solar, Germany’s CO2 emissions are not falling by very much, beyond what happened as the result of Germany’s Reunification and the closing of inefficient East German industries. In fact, CO2 emissions increased in 2016 and, based on preliminary data, hardly changed in 2017.

Since 2000, Germany has only cut its CO2 emissions by 13%.

Chart from Clean Energy Wire, Anna-Louisa-Karsch-Str. 2, 10178, Berlin

In other words, Germans have incurred considerable financial pain, a doubling in the cost of electricity, by using wind and solar, while achieving very little gain in cutting CO2 emissions.

If we follow Germany’s example, our cost for electricity will also double, and increase even more if wind and solar become an even larger part of our energy mix.

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8 Replies to “Let’s Pay $2,500 More for Our Electricity”

  1. Follow the money…..shut down society….follow the money.

    Let’s be honest. If saving the environment was real, the environmentalists would limit their driving to 55 mph, they would shun central air and heat, they would live in grass huts, they would not use technology products that need recharging, they would farm sustainably on their 50’x100′ plot of land, they would walk (not bike ride because that requires roads), and….

    Follow the money.

  2. Dear Donn

    While I agree with you about the general point you are making, your comparison here is actually somewhat misleading.

    The average German electricity consumption per household is around 3,079 kWh, i.e. about a third of US households (see http://bit.ly/2zfvBso). At $.12 or €.10 that would be only $369 / €308 per annum.

    Electricity prices in the EU in general are higher than in the USA at €.1283 / $.1583. Germany in particular has very high prices, with the cost of electricity for households (net of taxes and levies) at €.14 (i.e. ca. $.16). Germans pay lots of taxes and levies on top (part of the cost of the “Energiewende”) and end up paying a total of €.30 / kWh (see http://bit.ly/2zbuoSS). Again though, due to the greatly lower consumption of their energy efficient properties the average German household pays €924 / €1,100 per annum for their electricity (incl all taxes). So yes, electricity is vastly more expensive in Germany, no doubt for the many reasons you mention, however, the total cost for German households is less than half than that in the USA.

    Finally, the average cost of electricity to retail households may well be $.12 or rather $.1289 to be precise according to the EIA (see http://bit.ly/2zfTLTC). However, if you look at the EIA table there is a large disparity in $ / kWh in the contiguous states between $.097 in Washington and $.2234 in Massachusetts (Hawaii’s cost is even higher at $.3121). On a household weighted basis the average cost of electricity would be $.1356. This is also net of taxes, so the gross final cost to the average US household will be around $1,600.

    Again, I do agree with many of the points you make about renewables. But in order to reduce the financial burden on US households it would seem to me that great progress could be made by making homes more energy efficient.

    Best regards

    • Thanks. Excellent comments.
      Unfortunately, it’s not accurate to compare American households with European Households for electricity usage. I highlighted this in my book Carbon Folly a few years ago. While the data in the book is out of date, Europeans still have fewer appliances than do Americans. While the vast majority of Americans own dishwashers, only a fraction of Europeans do. Similarly, over 80% of American homes have clothes dryers while only a third of Europeans do. Similar disparities exist for other appliances, especially air-conditioning. Another basic factor is the size of dwellings. Americans have twice as much living space per person as do Europeans. If Europeans had the same appliances and used the same amount of air-conditioning their electricity bills would be much higher.
      You are correct in that US electricity rates for electricity vary between states. I avoided getting into that factor in this article because it leads to a discussion of how much-added cost is the result of adding wind and solar to the grid. The argument then becomes who saves more and who saves less. People living in states using fossil fuels will save more than people who live in states using wind and solar, which is an entirely different discussion.
      I wanted to keep it simple and merely compare German with American costs.
      Yes, it’s always good to use energy efficiently, which is why LED lighting is so good.

      • Hi Donn
        Well that’s exactly my point – the comparison is somewhat misleading. Yes, Europeans may have less appliances that Americans. Dishwashers and tumble dryer prevalence is around 46% and 54%, growing around 1% per annum. But if they do, their appliances will be on average 50% more efficient than models in the USA. Europeans also typically do not have domestic air conditioning (even in new homes), although demand is rising particularly in Southern European countries and due do global warming. When Europeans have air conditioners, these will usually be more energy efficient than US systems, due to the EU’s energy efficiency legislation. In the USA, as you will know, over 90% of households have air conditioners, although this makes up only some 20% of energy usage.
        Finally, other than for instance in countries like the UK with a large old (if not to say ancient) housing stock, European homes are vastly more energy efficient than US homes. Again here, EU legislation has driven both the refit of older homes and also the increasing construction of energy-efficient-by design homes, such as the German “Passivhaus”, which generates as much (usually renewable) energy as it consumes. The EU has already outlawed incandescent lighting and most households, companies and municipalities already use LED lighting.
        So again, there is no real like-for-like comparison in cost. Yes, electricity prices are higher and adding renewables into the mix will be a factor. However, the average European pays far less for their actual energy consumption (electricity and also heating) than a comparable US household.
        Best regards from a (thankfully air conditioned) office in hot London.

        • Thanks for your comments.
          I’m in the process of reading Heat Supply in Denmark – Who What Where and Why
          Published by: The Danish Energy Authority

          It’s interesting to note that the cheapest CHP in Denmark is from coal. Over half the homes in Denmark rely on distributed heating. Such an approach is not possible in most of America, except possibly in big cities, but probably not there either since the underground space for piping probably isn’t available. Only about 8% of homes in the UK use distributed heating. Denmark even uses straw for fuel. I mention this merely because it shows how different Europe is from the US. While Denmark uses distributed heating, Americans mostly use cheap natural gas that emits CO2. However, in Europe, the emphasis is on cutting CO2 emissions no matter what the cost.
          The fundamental fact, which was the purpose of my article, is that electricity in Germany costs a great deal more because of Germany’s, and Europes, emphasis on cutting CO2 emissions by using wind and solar.
          Wouldn’t the average German be better off if he didn’t have to pay such a high price for electricity, no matter how little he used?

  3. Donn, excellent piece. Have you thought of doing a short tutorial on why higher costs must be the case to counter advocates arguments that the cost of wind and solar are falling?

    • I have attempted to do this on a number of occasions. My article, Picking and Choosing on May 15, attempted to address the issue by showing how only the most favorable data is used by proponents of wind and solar when comparing their usage with natural gas and coal-fired power generation.
      My intent is to continue to find ways to make it clear that wind and solar are, by their nature, more expensive than natural gas and coal-fired power generation.