Now that the most recent Energy Information Administration (EIA) report is available, we can see more specific data on renewable energy usage across the US, including the most recent rise. Investors and developers in renewable energy should already be encouraged by the long-term objective of achieving 100% clean electricity by 2035.
But there are a few significant modern trends that merit attention.
The epidemic was successful for renewables, and they are expected to continue growing.
According to the EIA, through October 2022, green power made up 22.60% of the nation’s total electrical energy production. It also featured a forecast that renewable energy would achieve at least 25% and an impressive 14.26% rise compared to prior figures from a comparable time period in 2021.
In addition to the growth rates, this is wonderful news for solar investors because so many different industries have contributed to it. More for business purposes than ever, government initiatives and grants, as well as global trends favoring more accessible solar energy, are all driving growth.
Additionally, there is greater room for solar energy to expand than for wind energy, which despite seeing comparable growth rates, still only accounts for around 5% of the U.S. market vs nearly 10% for solar energy.
Where firms will expand the most during the next ten years
What does the EIA report have to say about the rise of renewable energy over the next ten years? The EIA lists achieving a worldwide “net-zero” state by 2030 as one of its key objectives. This implies that around 61% of the electricity in the US will come from sources that are renewable. The EIA also offers a number of suggestions for the type of energy growth that can lead us there, serving as a road map for possible high-growth regions in the years to come.
- More construction grants: In the upcoming years, the government is anticipated to invest more in grants for contractors and business owners who are interested in solar energy. But there is a catch: the Inflation Reduction Act (IRA) now provides the majority of federal funding for these incentives. The House of Representatives is currently in discussions over how to manage the US limit, and one of their objectives is to slash many of the IRA-included programs, which might have an impact on all energy investment. Renewable energy construction will receive a significant boost if the IRA is maintained. Grant programs may be primarily left up for the state if they are significantly changed.
- Heat pump growth: For the typical American home or business, heat pumps are among the most frequently neglected traditional ways for reducing energy use and eliminating fuel use. State laws, like those adopted by NY and other states, will only promote the use of heat pumps more in the future. When the financial advantages over fuel become apparent, proprietors will be happy to comply, and HVAC installers may anticipate rising demand over time.
- Wind energy: I anticipate that this industry will experience significant future expansion, particularly in the Midwestern and coastal states, despite the fact that wind energy has more limited investment prospects than other options (mainly wind farms) and is notably prevalent offshore.
- Targeted solar installations: Solar energy is now more accessible than ever before and has several benefits for businesses, particularly when it can maximize available space while reducing expenses. Examples include new residential construction, rooftop additions on suitable business buildings, and garage installations (which also offer shade for vehicles).Utility firms, who regard solar energy in particular as a danger to their business models, are now actively opposing the expansion of renewable energy. Utility firms are urging state governments, among other things, to scrap policies intended to promote the installation of solar energy systems and end business models that let solar energy owners profit from the extra electricity they generate.
- Key solar markets in the United States, such as California, where regulators killed solar-related incentives, Arizona, where utility companies supported an effective campaign to eliminate any benefits from rooftop solar, and Florida, where utility organizations are actively drafting legislation and submitting it to state congress to restrict solar power, have already suffered significant harm as a result of this war.It’s not clear where to go from here. End users benefit least from a conflict among renewable energy and conventional utility providers, and newbies to solar investing are further confused by governments’ fluctuating policies and regulations. After 2023, this might be among the biggest obstacles to overcome.