ELI5/ Why is the cost of electricity constantly increasing despite the increasing amount of renewable and green energy?

Question

I understand there is installation, maintenance and servicing costs, but shouldn’t the free power from the sun, wind and tidal eventually pay this off and start providing free power?

In: Engineering

Answer 1

Because you’re looking at marginal cost instead of total cost. Marginal cost is very small compared to total coat. It’s easy to think drilling for coal and oil costs money while wind and solar are ‘free’. But the vast majority of costs is building the wires, transformers, infrastructure, etc. Every new human that needs electricity adds to the need of new wires.