As the fight against climate change strengthens around the world, the movement for renewable energy is capitalizing on the increased demand fueled by government initiatives such as tax credits and cash-back incentives that have led to significant declines in renewable energy costs in the past decade.
By the numbers
While it’s taken some time to get the ball rolling, investments in renewables are rising as its costs fall. A report released by the International Energy Agency displayed that the percentage of newly installed power-generating capacities falling under the renewable umbrella is increasing every year.
The IEA also reported their projection that by 2025, a mere 7 years from now, the renewable energy sector will account for 56% of the “net generating capacity” that has been added thus far. In terms of dollar amount, the organization estimated $297 billion was spent on renewables globally in 2016 compared to $143 billion invested in new coal, natural gas and oil power sources.
Recent investment trends in clean energy is a demonstration of the power behind government-produced pressures on markets. When Congress approved the 2016 fiscal year budget which included an extension of the federal solar tax credit, it allowed Americans who purchase solar panel systems to continue to deduct 30 percent of the installation cost from their federal taxes.
Driving solar growth
The incentive, other wise known as the ITC, was estimated at the time by numerous solar new sites to produce a dramatic increase in the number of solar installations in the years to follow.
A clean energy news agency GreenTech Media, estimated in their own research a 54 percent increase in solar across the country by 2020. Just recently, GTM released their new findings which claimed that new solar installations actually account for just above their previous prediction, at 55 percent in 2017. Since the tax credit was first enacted over a decade ago, the organization reported an average annual growth rate of 59% in solar energy alone.
The US Department of Energy is contributing to the effort to drive down costs through their Solar Energy Technologies Office which helps fund projects in laboratories, state and local governments, non-profits, private companies, etc. across the nation.
According to the agency’s website, they are striving to make it “faster, easier, and more affordable for Americans to choose solar energy in their daily lives.”
Meanwhile in Washington DC
Just a few blocks over from the DOE on Pennsylvania Avenue, the Trump Administration continues to fight to keep the coal and natural gas industries burning. There are reports of the administration contemplating efforts to subsidize certain fossil fuel-based industries, and President Trump officially imposed a 30 percent tariff on solar imports in January of this year.
Amid these actions, Francis O’Sullivan, a research director at MIT’s Energy Initiative, was quoted in the Wall Street Journal claiming “wind and solar now represent the lowest-cost option for generating electricity” due to the falling costs in recent years.
The U.S. renewable energy sector, specifically, solar, currently hangs in the balance due to both domestic and international political influences. Nevertheless, solar at large continues to grow and assimilate throughout the world as investments surge. For local success stories of solar at a more everyday scale, see Ipsun Power’s customer testimonials.