Do Solar Farms Increase Electricity Costs?
“All this green energy is being built, so why does my electric bill keep going up?”
I hear some version of this question pretty much every day. Usually, it comes with an implied conclusion: New York has built more solar and wind, electric bills have gone up, therefore, renewable energy must be causing higher electric bills.
Correlation does not equal causation, however, and that’s what I want to discuss here.
Admittedly, there are costs associated with New York’s clean energy transition, and ratepayers do pay some of them. Solar and wind projects need to be connected to the grid, and transmission needs to be expanded in some places. Utilities and other electricity suppliers have state-mandated clean energy obligations.
But the electric bill that comes to you in the mail is the product of a much larger system. Looking at the solar farm down the road and automatically assuming it explains the increase on your NYSEG bill skips over most of what you’re paying for.
The blog post here is specifically a New York explanation; electric markets, utility regulation, generation mixes, taxes, and rate structures differ substantially from one state to another. That said, it does provide us with a helpful framework for comparing the rise in energy prices across the board, and not just in the Empire State.
But the short answer to the question:
Solar farms can contribute to some electricity-system costs, particularly through renewable energy programs and the infrastructure needed to connect new generation. But they aren’t the primary explanation for every increase in New York electric bills. Natural gas prices, aging grid infrastructure, utility investments, transmission, electricity demand, taxes, and fees all influence what customers ultimately pay.
Why Are Electricity Bills So High in New York?
We tend to favor simple, digestible answers, but unfortunately, this is one question to which the answer is more complex. Your electric bill reflects the cost of generating electricity, delivering it to your home, maintaining and upgrading the grid, and complying with various state and federal requirements.
Those costs can move independently of one another, which means New York can build more solar while electric bills rise at the same time. The existence of both trends doesn’t tell us that one caused the other.
To understand what’s happening, we need to look first at what exactly we’re paying for.
What Charges Are Included in a New York Electric Bill?
When most of us look at our electric bills, we assume we’re just paying for electricity. And we are. But we’re paying for a lot of other things, too.
There are two pieces to a residential utility bill: supply and delivery.
Supply is the electricity itself. Your utility either purchases that electricity from the wholesale market or obtains it through other supply arrangements.
Delivery covers the infrastructure and operations required to get that electricity to you: poles, wires, substations, transformers, maintenance, storm response, utility operations, and other costs.
NYISO explains that retail rates incorporate several components beyond the wholesale cost of electricity, including transmission and distribution, administrative and operational expenses, taxes and regulatory fees, and utility investment.
This delivery bit tends to get glossed over in the broader discussion about energy prices, but it’s important: solar has a fuel cost of exactly zero. Even if we produced unlimited electricity with solar, your electric bill still wouldn’t disappear.
Why? It still needs to get to you, the end user, somehow. You still need poles and wires, substations and transformers. You still need people to restore the power after an ice storm drops trees on the lines. Someone has to maintain the grid.
So when your electricity bills rise, one of the first questions you should be asking yourself (and perhaps your elected officials) is which part of the bill went up, and why?
How Much of New York’s Electricity Comes from Natural Gas?
Despite all the discussion about New York’s renewable energy buildout, natural gas remains the largest source of electricity generation, accounting for 47% of New York’s generation in 2024. Hydropower supplied 21%, and nuclear 20%.
In other words, nearly half of the electricity generated within New York still comes from a fuel whose price can and does fluctuate considerably. And that has consequences for electricity prices.
Sunlight, however, does not have a commodity price. Neither does wind or water. Natural gas does.
How Do Natural Gas Prices Affect Electricity Rates in New York?
New York’s wholesale electricity market works somewhat like an auction. Power producers offer electricity into the market, and NYISO coordinates the resources needed to meet electricity demand while maintaining reliability. As demand for electricity rises, increasingly expensive generation may be called upon to meet that demand.
The price of the marginal generation needed to meet demand influences wholesale electricity prices. Because natural gas generators play such a large role in New York’s electricity system, changes in gas prices can have an outsized effect. Fuel costs (specifically natural gas) are identified by NYISO as one of the key factors that affect wholesale electricity prices, along with electricity demand, available supply, and transmission constraints.
So when prices rise, it’s not that a hydroelectric plant’s water is now more expensive, or a solar farm is paying more for sunshine. If the natural gas generation needed to meet demand becomes more expensive to operate, wholesale electricity prices can rise (even if there happen to be a few solar farms in your town).
Why Did NYSEG Electricity Supply Rates Increase in 2026?
We got a good taste of this relationship this winter. On January 30, 2026, NYSEG reported electricity supply rates more than 44% higher than on the same date in 2025 for its customers purchasing supply through NYISO.
NYSEG pointed to rising natural gas prices and electricity consumption as factors behind those higher supply prices. For a standard residential customer in its West Pricing Zone using 716 kilowatt-hours in February, NYSEG estimated an increase of about $14 (or 23%) in supply costs compared with the previous year.
No new solar farm needed to be involved here: gas just got more expensive. Demand was high, given that it was the dead of winter, and electricity supply became more expensive.
How Do Global Natural Gas Markets Affect New York Electricity Costs?
Natural gas is a commodity, and commodity markets can get messy. Prices respond to weather, production, pipeline capacity, storage inventories, domestic demand, exports, and geopolitical events. The United States has also become a major exporter of liquefied natural gas, or LNG, which creates greater connections between domestic gas production and international energy markets.
Historically, most natural gas produced in the US had to be used in North America because transporting gas across oceans is challenging. LNG changes that; natural gas can be cooled until it becomes a liquid, loaded onto ships, and exported to countries in Europe and Asia.
So if US producers have 100 units of gas available, and all 100 have to be sold domestically, that price mostly reflects American supply and demand. But if producers can sell some of it overseas, especially when buyers are willing to pay more, American consumers are now competing, to some degree, with international buyers.
This doesn’t automatically mean a tanker delayed halfway around the world determines your NYSEG bill; the relationship is more complex than that. But it illustrates a vulnerability that comes with relying heavily on a commodity whose price responds to events well outside New York.
When nearly half of the electricity generated in your state comes from natural gas, the electricity system inherits some of that fuel-price volatility.
Can Solar and Renewable Energy Lower Electricity Prices?
Regardless of your stance regarding “climate politics,” renewable energy has an obvious economic advantage. Once a solar facility is operating, its owner doesn’t have to buy sunlight.
Again, solar isn’t free. There are still construction costs, financing costs, land costs, interconnection costs, maintenance expenses ,and replacement and decommissioning costs eventually (all costs that, by the way, are associated with any other form of energy generation as well).
What solar doesn’t have is a fuel commodity whose price can jump because of a cold winter, supply constraints, increased exports, or geopolitical conflict.
More generation without fuel costs can therefore reduce exposure to fossil-fuel price volatility.
How Does New York’s Aging Power Grid Affect Electric Bills?
Probably one of the most overlooked parts of the electricity-cost conversation, New York’s electrical infrastructure is old. Very old, in places.
NYISO has repeatedly identified the aging transmission and generation fleet as a major challenge for the state’s electric system. Its 2025 Power Trends report notes that utilities have to recover costs associated with both new infrastructure and maintaining aging infrastructure through retail rates.
Unlike a solar farm, most of this infrastructure is nearly invisible to the average person. While we notice 50 acres of solar panels, we don’t usually notice a transformer replacement, reconductored transmission line, rebuilt substation, or utility rate case nearly as easily. Yet those investments can have much more direct relevance to the delivery charge appearing on our bills.
How Much Do New York’s Renewable Energy Mandates Cost Ratepayers?
I’m not biased: I understand that New York’s clean energy policies cost money, too. Utilities and other load-serving entities are required to financially support renewable generation and other clean energy programs.
Pretending those costs don’t exist is counterproductive, but perspective is useful. For 2026, NYSERDA set the initial Tier 1 Renewable Energy Standard rate at $1.9988 per megawatt-hour.
A megawatt-hour is 1,000 kilowatt-hours. So $1.9988 per megawatt-hour works out to approximately: $0.001999 per kilowatt-hour, or about 0.2 cents per kWh. At 700 kWh, that's about $1.40 worth of electricity at that rate.
So the cost is far, far less than what most people assume.
Can Solar Farms Lower Wholesale Electricity Prices?
They can. When solar is producing electricity, it adds generation to the grid without requiring fuel. That low-variable-cost electricity can reduce the need for more expensive generators during certain hours. In electricity markets, this is often referred to as the merit-order effect.
It doesn’t mean solar lowers prices every hour. Solar output falls in the evening even though electricity demand may remain high, and production varies seasonally in New York. Transmission constraints can limit where electricity can travel. The grid needs resources capable of meeting demand when solar isn't producing.
Those are genuine challenges with genuine costs, but it makes little sense to count what solar costs to build while ignoring the value of the fuel-burning generation it can displace when it’s producing electricity.
Why Haven’t More Solar Farms Lowered New York Electric Bills Yet?
Because New York hasn’t replaced one electricity system with another. We’re operating both. Another reminder that New York gets half its in-state electricity generation from natural gas,and that it still depends on aging generation and grid infrastructure.
At the same time, the state is repairing that system, maintaining reliability, building new generation, connecting renewable resources, expanding transmission in some places, and preparing for changing electricity demand.
Why Are Solar Farms Blamed for Higher Electric Bills?
In my opinion, solar farms absorb so much anger over electricity prices for the simple fact that they’re visible. Drive down a rural road, and you can see exactly where millions of dollars of energy infrastructure went.
But you can’t see a natural gas price spike. You can’t see congestion on a transmission interface, and you probably don’t know when a transformer installed before your grandparents were born finally has to be replaced. And unless you spend an unreasonable amount of time reading utility filings, you probably don't know which capital investments your utility is seeking to recover through its latest rate case.
You can see solar panels. So when the panels appear at roughly the same time as a higher utility bill, it’s quite tempting to connect the two.
Solar is only one piece of the electricity system story. It’s nowhere close to representing the entire thing.
FAQ
Do solar farms make electricity more expensive?
Not directly. Solar farms have costs, including construction, interconnection, maintenance, and in some cases new transmission infrastructure. New York ratepayers also support renewable energy through state clean-energy programs. However, those costs are only some of the many factors affecting electricity rates. Natural gas prices, utility infrastructure investments, electricity demand, transmission constraints, taxes, and other charges can all affect what customers ultimately pay.
Why is my electric bill going up if New York is building more solar?
Building more solar doesn't immediately eliminate the other costs in the electricity system. New York still relies heavily on natural gas generation, while utilities are maintaining and replacing aging poles, wires, transformers, substations, and transmission infrastructure. Customers are paying for an electric system undergoing significant investment and change, not simply for the electricity generated by the newest power plants.
Does solar energy lower electricity prices?
Solar can put downward pressure on wholesale electricity prices when it’s generating because solar facilities don't have to purchase fuel. Adding low-variable-cost electricity can reduce the need for more expensive generators during certain hours. However, wholesale generation prices are only one component of a customer's retail electric bill.
Why do natural gas prices affect electricity prices in New York?
Natural gas provided 47% of New York's in-state electricity generation in 2024, according to the U.S. Energy Information Administration. Natural gas generators also frequently help set wholesale electricity prices when they are the marginal resources needed to satisfy demand. When natural gas becomes more expensive, wholesale electricity prices can rise as a result.
How much do New York's renewable energy requirements cost?
The cost depends on the particular program. For example, NYSERDA set New York's initial 2026 Tier 1 Renewable Energy Standard rate at $1.9988 per megawatt-hour, equivalent to about 0.2 cents per kilowatt-hour. New York has additional clean-energy obligations and programs, so this figure should not be interpreted as the total cost of the state's clean-energy policies.
Are New York electric bills paying for new transmission lines for solar and wind?
Some transmission investment is being made to accommodate renewable generation and meet New York's clean-energy goals. But renewable energy isn't the only reason New York needs grid investment. Much of the state's electric infrastructure is decades old, and transmission projects can address reliability, congestion, aging equipment, changing electricity demand, and access to multiple types of generation.
Why is electricity so expensive in New York?
There isn't one cause. New York electricity costs reflect the price of generating electricity, natural gas and other fuel costs, transmission and distribution infrastructure, utility investments, taxes and fees, regulatory requirements, electricity demand, and regional transmission constraints.
Will building more solar farms make New York electricity cheaper?
More solar could reduce exposure to volatile fossil-fuel prices and lower wholesale electricity prices during some hours, but it doesn't guarantee lower retail bills. Customers still have to pay for transmission, distribution, grid maintenance, reliability, and other electricity-system costs.
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