Down just 18% from its all-time high in 2015, renewable energy investment in 2016 turned out with impressive pace. Continued vigorous demand from non-utility entities, paired with the emergence of strong global solutions, indicate that clean tech progress in 2017 may be on track to emulate the victories of the previous two years. The first month of this year has already been greeted with several corporations making ambitious commitments to renewable energy, including a 200 MW solar installation by Apple and a 50 MW wind power purchase agreement (PPA) signed by Home Depot.
The question now looming over many of our heads is whether decisions made by the new White House Administration could damper the explosive growth witnessed in the renewable energy industry over the past several years. While surely uncertainties remain regarding policy support for wind and solar tax incentives, general consensus indicates that both utilities and corporates have no intention of slowing their uptake of low-carbon technologies and adoption of cleaner energy sources.
As evidence of this, below we have summarized high-level takeaways from several expert agencies on the outlook for renewable energy and sustainability going into 2017:
EPA State of the Voluntary Green Power Market – Corporate procurement Trends1
- Corporate purchasing of energy attribute certificates, such as RECs, is predicted to remain critical in reaching short-term renewable energy targets. As corporate clean energy goals mature, though, there has been an emerging emphasis on additionality of renewable purchases. An increased focus on additionality will trigger many corporates to shift their strategy from unbundled green power products to more long-term commitments, such as PPAs and onsite solutions. For companies who set 100% renewable energy goals, including the growing group of global companies joining the RE100, this transition will be especially important.
Bloomberg NEF & BCSE Sustainable Energy in America Factbook2
- The U.S. has sustained economic growth while transitioning to renewable energy and a cleaner economy – plus, Americans are spending less income on energy than ever before!
- Greenhouse gas emissions in the U.S. hit a 25-year low while real GDP grew by 1.6%, indicating a true decoupling of emissions and economic growth.
- A total of 22 GW of renewable energy capacity was added to the grid in 2016, with corporate buyers signing 2.5 GW worth of long-term purchases of wind and solar power. In fact, new renewable capacity added in 2016 outweighed additions from natural gas, nuclear, oil, and coal combined.
ACORE on Renewable Energy in the New Administration3
- Renewables have proven to be an essential element to grid security and resiliency, job creation, and economic stimulus – 43% of jobs in the electric sector come from solar alone.
- Although not explicitly mentioned, wind and solar exemplify many pillars of Donald Trump’s “America First Energy Strategy”, including promoting domestic, low-cost energy sources and investing in infrastructure to tap into America’s workforce.
- The business case for corporate renewables still remains, and both companies and public utilities alike are making long-term investment decisions that look beyond the horizons of political tumult.
Chadbourne & Park 2017 Renewable Energy Outlook4
- Solar costs are predicted to fall precipitously. While prices for wind are dropping at a slower rate, prices are expected to continue to decline, making both of these renewable power sources competitive with conventional generation in many markets.
Figure 1: Disclosed CapEx for onshore wind and PV projects in 58 non-OECD countries. Source: Bloomberg New Energy Finance
- Developers will be hungry for corporate offtakers of wind and solar projects coming onto the grid, but an economic rationalization in regards to price will remain a key component for these buyers.
- Energy storage is gaining serious momentum, becoming more practical for both residential and utility-scale use. This makes inexpensive – yet intermittent – renewable energy more available to be dispatched at times when electricity demand is high.
Taking these perspectives into consideration, it becomes clear that – politics aside – renewable growth will continue to forge ahead. Transitioning to a low-carbon economy is not only financially advantageous but also unveils new opportunity for responsible leadership for both business and government alike.
Reach out to our team to learn more about implications for your specific organization, or to take the next steps in advancing your clean energy strategy.
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