Thoughts on What’s Next For Renewables Post This 2016 US Election
Long story short, I am still very much convinced of the importance, staying-power, and advancement of renewables.
With the new administration on its way to the White House in 2017, we realize the current Federal position on the environment stands to be challenged as you know. So far from what we can tell the Clean Power Plan and the Climate Action Plan are at risk and a known climate skeptic Myron Ebell has been tapped to lead the EPA transition. The administration seems to indicate they are fossil fuel friendly but could also be renewable energy friendly as well. Remember — oil is basically used for transportation and not for electric power creation. Coal has been on the decline due to market factors and market competitiveness of renewables and natural gas.
It remains to be seen to what extent this new administration redirects the Federal government’s progress in addressing climate change and sets examples, good or bad (i.e COP22), for the rest of the world. Despite election results, passion and sentiment for renewables and sustainability are still strong in the eyes of millennials and beyond. Investor sentiment remains committed as $1 out of every $5 of investor AUM, or $8.7 trillion, is invested in sustainable, responsible, and impact investing (SRI) as of the end of 2015.
We do know that the Federal tax incentives for renewable projects, the ITC and the PTC, have already been extended by the government, so that may provide some short-term comfort. Bipartisan support for renewables continues to come together including the red states of Iowa, North Carolina, Georgia, and Texas for example.
Job creation has been an important campaign topic. Improving infrastructure, including the modernization of the grid with more electric storage capabilities, has also been a campaign topic. Perhaps the Federal government makes the choice to appear passive or neutral towards renewables and climate change and lets progress happen without their direct actions. Rather, there becomes an “EcoRight” reliance that emboldens the private sector to lead the charge in addressing renewable energy technology and installs.
I am convinced that growth in renewables will not be halted entirely and will continue, led at least by the market and the states and the rest of the world.
We should remind ourselves that, while there has not been a Federal Energy policy per se, the states have led the charge in this renewable energy evolution including the adoption of Renewable Portfolio Standards, net metering policies, incentives, and other stimulating measures. Renewable energy jobs have grown 20x faster than the national average and wind and solar jobs outpace coal jobs by a factor of 4 in 2015 according to Bloomberg. Solar PV prices continue to drop, solar and wind deployment costs are falling, and unsubsidized power rates from solar and wind are cheaper than fossil fuel power rates at certain times in certain places such as Texas. And new and innovative renewable investment start-ups are blossoming.
As I noted in my LinkedIn piece entitled “Why April 1 Was No Joke for the Future of Clean Energy”, electric car adoption will continue to disrupt oil markets. In February, Bloomberg New Energy Finance calculated that the demand for oil would fall by 2 million barrels a day, or the “equivalent to what triggered the 2014 oil crisis,” at some point between the years 2023 and 2028 as a direct result of electric vehicles. We know that Tesla’s recent quarterly earnings of $22 million outpaced the 2015 loss of a total of $67 billion by the entire oil industry (yes, a bit of an “apples and oranges” comparison but important to think about nonetheless). Tesla has added 18,000 new jobs this year including 6,000 in their US factory compared to net job losses by General Motors. The Tesla Model 3 car is on track to becoming the number one best selling car this year, according to Forbes, with the company having already received 400,000 pre-orders (or approximately $14.0 billion) and counting. In just 24 hours of revealing the Model 3, Tesla set “the record for the highest single-day sales of any product of any kind ever in world history” according to Tesla.
We are still onto something revolutionary here.
I believe renewables are very much alive and well. I remain steadfast in terms of the ability to capitalize on these business opportunities. Here’s to a successful 2017 and beyond for renewables.