A new study by NERA Economic Consulting, commissioned by the Corporate Energy Buyers Association (CEBA), reveals that placing permitting restrictions on new solar and wind energy projects could significantly increase electricity costs across the United States. By modeling a constrained market environment against an unconstrained scenario, researchers found that limiting the deployment of renewable resources leads to a greater reliance on natural gas, which in turn drives up consumer prices. Between 2027 and 2033, these constraints are projected to raise national average electricity prices by approximately 6%, with some regions experiencing substantially higher cost increases.
The analysis evaluated four scenarios, considering both business-as-usual and high-demand electricity forecasts. When solar and wind deployment is restricted, the resulting gap in generation capacity is largely filled by new natural gas combined cycle (CC) plants. This shift not only increases costs for households and commercial and industrial (C&I) customers but also creates potential reliability risks. The study notes that constraining renewables necessitates natural gas capacity additions that are 60% to 72% higher than current projections from the U.S. Energy Information Administration (EIA), potentially straining supply chains and exposing the grid to greater fuel price volatility.
Regional impacts vary significantly, with ERCOT and NYISO facing the most pronounced electricity price increases, estimated at up to 22% and 11% respectively under constrained conditions. In contrast, cost-of-service regions see more moderate price fluctuations. Beyond the direct impact on electricity bills, the study highlights that restricting renewable deployment raises economy-wide household energy costs by an average of $11.6 billion annually. These findings underscore the economic role of low-cost solar and wind resources in mitigating the financial pressure caused by rising electricity demand, particularly as data center expansion drives significant load growth across the country.