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With wind, solar, why are electric rates rising?

28 July 2008 | Market Watch: News From Around The Web | Source: istockanalyst.com
Q: My power company is raising rates and blaming soaring coal and natural gas prices. But given all the new wind farms and solar projects I read about, shouldn't electricity rates be falling?

A: Wind and solar power is growing at a rapid pace in the United States. Wind-generated electricity grew 45 percent between 2005 and 2006, and 21 percent between 2006 and 2007, the Department of Energy says. Solar power generation grew by 19 percent between 2006 and 2007. The photovoltaic, or PV, solar panel industry has grown by an average of 25 percent a year over the past 10 years, according to the Solar Energy Industries Association.

"However, this rapid growth is from a very small base," the SEIA notes on its Web site. "PV still accounts for a small percentage of electricity generation worldwide."

Indeed, there lies the problem with wind and solar power: Even at breakneck growth rates, renewable energy sources will account for only 12.6 percent of U.S. electricity generation by 2030, up from 9.5 percent in 2006, the Energy Department says. Worldwide, renewable energy's share of electricity generation will actually fall to 16 percent in 2030 from 19 percent in 2004, the department says. 

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