An April 2025 report from the Pacific Research Institute (PRI) analyzing California’s ambitious climate goals and radical energy transition plans finds that, left unchecked, they will lead to significant costs for Golden State families and businesses.
Since enacting SB 100 in 2018, California has mandated “renewable energy resources and zero-carbon resources supply 100% of retail sales of electricity to California end-use customers and 100% of electricity procured to serve all state agencies by December 31, 2045.”
In The Cost of Going Green: How the Green Energy Transition Will Hurt Californians, PRI estimates that this policy will cost, at minimum, somewhere between $231.7 billion and $268.7 billion through 2050—or between $17,398 and $20,182 for every single California household over the next 25 years. This amounts to annual costs between $695.92 and $807.28 per household.
The report estimates that most of the cost will come from “constructing and installing the alternative energy infrastructure, the largest and most visible of which will be the purchase of the requisite solar panels, wind turbines, electric vehicles (EVs), and battery infrastructure.”
There will also be “heavy costs for the decommissioning and dismantling of perfectly good but politically disfavored oil development, natural gas plants and nuclear plants…Relatedly, there are the losses created by stranding assets that don’t need to be replaced. Consumers will be forced to cover the costs of the new alternative energy investments as well as those for removing existing infrastructure. Consequently, they will be paying the costs of two repetitive energy systems – the new ‘green’ energy generation framework and the prematurely disfavored generation facilities.”
Furthermore, the increase in reliance in wind and solar electricity generation sources will require, due to the intermittency of these sources, backup from traditional electricity generation facilities like coal, nuclear, hydroelectric, and natural gas, or from battery storage.
Accordingly, this means that Californians are paying “significantly more expensive electricity bills because of the energy transition policies. To get a sense of these costs, the average price per kWh [kilowatt hour] of electricity in 2023 was 24.87 cents in California but 12.68 cents for the U.S. If California’s average price premium relative to the U.S. between 2001 and 2009 (46.8 percent) were still applicable rather than California’s actual 96.1 percent price premium, then Californians would have spent 18.61 cents per kwh rather than 24.87 cents. Given that the state’s total consumption of electricity in 2023 was 281,140 GWh [gigawatt hours], this translates into an additional $17.6 billion in extra costs that Californians are paying. Unlike the construction and decommissioning costs, these burdens are recurring each and every year.”
Finally, there are disposal costs and “issues with the politically preferred [i.e. solar and wind] electricity infrastructure that must be addressed. Alternative energy is not magical. In fact, in many ways it works just like the traditional energy infrastructure. Resources are extracted from the earth, used to generate energy, and then must be disposed of once they have reached their end-of-life. Properly disposing of or recycling these resources is imperative, otherwise large adverse environmental impacts will occur.”
“There are also many other costs that, while much harder to quantify, are no less real,” the report notes. “These include higher future energy costs as the evidence clearly demonstrates that an electricity grid driven by solar and wind generation sources does not lower electricity prices, it raises them. The losses associated with foregone investment opportunities are another cost. When companies are forced to invest their scarce resources in politically preferred alternative energy resources or shutting down otherwise viable energy assets, this means these same resources cannot be used for other purposes. One lost alternative is investments in fireproofing power lines to reduce the probability and/or destructiveness of wildfires.”
“California’s government mandates are forcing an energy transition that will impose enormous costs on the state’s residents,” said Dr. Wayne Winegarden, PRI senior fellow in business and economics and co-author of the study in an accompanying press release. “These policies will lead to higher energy costs, a less reliable energy system, and reduced economic opportunities. It is crucial for policymakers and the public to understand the true costs of these mandates.”
“California should repeal its global climate change production and consumption mandates,” the report concludes. “In their stead, the state should promote a market-based approach to global climate change. This approach recognizes that there are many potential paths to a lower-emission future. Instead of relying on a few hundred policymakers who want to design the future, policies should embrace technologies that are efficient today and empower the millions of Californians to both manage their current energy use and design the innovations that will ultimately secure an affordable lower-emission energy system.”
The PRI report is right to call for the repeal of these expensive and counterproductive climate measures. Instead of going all-in on costly, impractical, 100-percent “renewable” electricity generation schemes, California policymakers should instead encourage a diversified mix of dispatchable, baseload energy sources that prioritize affordability and reliability. Further, they should promote investments in only those energy sources that can reliably meet demand, particularly during peak usage hours or adverse weather conditions. Policymakers should also reassess state-level incentives for wind and solar electricity generation to ensure they align with actual performance and do not inadvertently increase costs or reduce grid stability.
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