Few ideas in today’s energy debate sound as reassuring, or as misleading, as the claim that wind and solar power deliver electricity at “almost no cost” because they have no fuel expense.

It’s a simple narrative: No coal to mine, no natural gas to burn and no uranium to purchase means nearly free electricity.

The appeal of that argument is obvious. Fuel is visible. It shows up on bills, in commodity markets and in headlines. When fuel prices spike, electricity costs often follow. So when a technology requires no fuel at all, it’s easy to assume the electricity it produces must be close to free.

But in Virginia and across the PJM regional grid, that assumption misunderstands how electricity prices are actually determined, and what consumers ultimately pay.

It is true that wind and solar have very low marginal costs. Once constructed, producing another megawatt-hour requires no fuel. That matters. It affects how those resources bid into the market and where they sit in the supply stack.

What it does not mean is that electricity is produced at almost no cost to the system, or that consumers pay prices that reflect those zero-fuel bids.

PJM, which operates the regional power grid serving 13 states including Virginia, runs a competitive wholesale electricity market built around a single clearing price. Every megawatt-hour, whether generated by nuclear, natural gas, coal, wind or solar, is paid the same price during a given hour.

That price is set by the last resource needed to meet demand, the marginal unit.

Most hours in PJM, that marginal resource is natural gas.

This distinction is critical. Wind and solar typically bid into the market at or near zero dollars per megawatt-hour. But they are almost never paid zero. They are paid the market-clearing price, usually determined by a dispatchable generator that can operate on demand, not just when weather conditions cooperate.

In practice, renewable facilities receive the same hourly market price that gas plants set.

Consider a simplified example. If demand in a given hour requires dispatching generation up through a gas-fired plant bidding $55 per megawatt-hour, the market clears at $55. Every resource producing electricity in that hour, including wind and solar units that may have bid at $0, is paid $55.

That is not a flaw in the system. It is how competitive wholesale markets are designed to operate.

Supporters often point to the “merit-order effect” — the idea that adding lower-cost generation can push a more expensive resource out of the stack and reduce prices during certain periods. That effect can occur. On mild spring afternoons when solar output is high and demand is moderate, prices may be modestly lower than they otherwise would have been.

But the impact is conditional and limited. It depends on demand levels, system conditions and which resource ultimately sets the marginal price. In a single-clearing-price market, the lowest bid does not determine the final price. The marginal bid does.

That is the core economic reality often missing from public discussion.

Having no fuel expense does not mean electricity is provided “at no cost” to consumers. It means the resource bids low, while still receiving the market-clearing price determined by the unit required to balance the system.

Confusing low marginal cost with low consumer cost leads to oversimplified policy conversations. In Virginia, where electricity markets are tied to PJM’s pricing structure, understanding that distinction is essential to evaluating claims about affordability.

Low marginal cost does not equal low consumer cost.

In PJM, there are not separate prices for solar and natural gas. There is one price.

Nearly every hour, consumers pay the same for both.

That is how the market works, regardless of which resource has a fuel cost.

Glenn Davis of Virginia Beach is the former director of the Virginia Department of Energy and former member of the Virginia House of Delegates. He is an energy policy strategist specializing in electricity markets and grid policy.