Renewable Energy’s Low Costs and High Returns
As 2017 begins, there’s never been a stronger economic case for renewable energy than there is today. The conventional wisdom has always been that renewable energy is far more expensive than traditional sources. However, rapid innovations and technological advances have driven down costs to the point that electricity from wind turbines and solar panels is increasingly cost competitive with power generated by traditional energy sources like coal and even gas.
In just the past eight years, according to the investment bank Lazard, the cost of power from onshore wind and solar panels has dropped by as much as 66 percent and 85 percent respectively. And because renewable energy is driven by technology, we can expect its costs will continue to decline.
As prices have plummeted, investors and businesses have taken notice. In 2015, investment in renewable energy hit an all-time high of $288 billion, according to the International Energy Agency. An average of half-a-million new solar panels were installed every single day. And for the first time since the industrial era began, more of the world’s money was invested in renewable energy technologies than in new fossil fuel plants. Nearly 60 of new electric generating capacity in the United States in 2016 came from solar and wind power, according to the Energy Information Agency.
The growth in renewable energy is only just beginning. By 2040, the world will add nearly 5,000 Gigawatts of new electricity, according to the International Energy Agency, which is close to doubling the existing global electricity power generation infrastructure that exists today. The cost of bringing this new capacity online is projected to be around $19 trillion. And nearly two-thirds of this investment in new generation is expected to go towards renewables.
This vast new demand for renewables will continue to drive down the cost of electricity, making it easier for businesses — in America and abroad — to compete at home and in the global marketplace.
The renewables revolution is a global phenomenon. Much of the new investment in renewable energy will take place in the developing world. Citizens in China and India, but also in nations across Africa and Latin America are demanding cleaner, less polluted air, as well as greater access to affordable energy. And renewables can help bring clean, inexpensive electricity to hundreds of millions of people around the world, many of whom live in remote communities.
The bottom-up demand for cleaner energy received high-level support from the Paris Climate Accord in 2015, which confirmed countries’ decisions to pursue low-carbon energy policies. The nearly 200 countries that signed the Paris accord committed themselves to reducing their carbon dioxide emissions, in large part, by increasing their use of renewable energy. This sent a powerful signal to the private sector that renewable energy is the energy of the future.
The global demand for renewables is extremely good news for American jobs.
Companies in the United States already make some of the world’s most advanced and competitive solar, wind, battery and energy efficiency products which support hundreds of thousands of quality jobs.
Nearly 800,000 Americans work in the renewable energy sector. What’s more, renewable energy jobs are being added hand-over-fist. Job growth in the solar and wind industries in the United States expanded by more than 20 percent in 2015, which was about 12 times as fast as overall job creation in the U.S. economy that year, according to the International Renewable Energy Agency. Today, more Americans are employed in the solar and wind industries than by the oil and gas extraction and coal mining industries combined.
In fact, according to the Bureau of Labor Statistics, the fastest growing profession in the United States is wind turbine technicians. Additionally, clean energy is creating and supporting jobs, including in manufacturing, all over the country. In the desert outside of Reno, Nevada, thousands of Americans go to work each day at one of the world’s largest lithium-ion battery manufacturing plants. More than 21,000 workers across 43 states work in manufacturing jobs related to modern wind farms.
And American companies continue to push the envelope in developing technologies that can ensure the United States remain a world leader in renewable energy products. For example, U.S. companies are developing satellites that collect solar energy that can be beamed back to earth and transformed into plentiful, affordable electricity.
Renewable energy has always offered environmental benefits. It’s exciting to see today that the business case for renewables is just as compelling. Whether it’s lower electricity costs, higher returns on investment, new jobs, or a healthier planet, the renewable energy revolution is ready to deliver benefits everyone can enjoy.