Analysts see bright future for worldwide renewable energy

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Renewable energy is too often viewed as a fringe industry awaiting mainstream adoption. But a deeper, holistic analysis of the data refutes this notion. In fact, recent reports show that renewable energy is actually well on its way to being the dominant method of global energy generation, even if this trend is not reflected in public opinion. Accelerating this adoption, however, will require a greater awareness of the progress already being made, as well as a renewed commitment by government and the private sector to support continued renewable energy investment.

Credit: iStockphoto, Nihat Dursun

A Thursday event co-sponsored by the Worldwatch Institute and the Renewable Energy Policy Network for the 21st Century (REN21), reflected on the state of the renewable energy industry and offered praise for the steps being taken in the U.S. and abroad. The overarching takeaway was the fact that the renewable energy sector is now a dominant player in the energy industry.

"Renewables are no longer just becoming Mainstream," said Eric Martinot, author of REN21's Renewables Global Futures Report, in remarks during Thursdays event. "They are now the main focus on the power sector globally."

Christine Lins, executive secretary of REN21, agreed. She added that the energy market has made significant progress since 2005 and now incorporates many more stakeholders across many more countries.

Affordability drives worldwide renewables

Cost -- specifically upfront expenditures -- has traditionally been one of biggest barriers to renewable energy development. REN21's 2013 Global Status Report found that these costs are dropping, which should spur healthy generation in the future. It noted that the price of solar modules declined 40 percent in 2011 and fell another 20 percent in 2012.  The cost of solar PV panels is now less than $1.00 per watt.

"As the market evolves, prices drop down, which of course makes the technology accessible to more and more players also in the developing part of the world," Lins said.

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Global annual investment in renewable energy is now greater than  fossil fuels and nuclear combined
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The biggest gains are being made in Asia, which invested more money in renewable energy than any other region. Its 2012 renewable investments were a 16 percent increase over 2011 levels. Globally, more than two-thirds of all new generation was renewables-based.           

But just as renewable energy becomes more affordable, there is also an increasing amount of uncertainty in the U.S. surrounding renewable energy funding and the extension of tax credits. This uncertainty has dampened renewable investment in the U.S, which fell by 30 percent from 2011 to 2012.

Encouraging a sense of urgency

Overall, analysts still see a long way to go -- especially in the United States.  Martinot said that the current thinking on renewable energy is easily 10 to 20 years behind reality.

"Where we stand is not at all where people think we stand," he said. 

In fact, he noted that global annual investment in renewable energy is now greater than that of fossil fuels and nuclear combined, and that's been true since 2010.

U.S. Representative Rush Holt, a member of the House Committee for Natural Resources, also spoke at the event. He said that renewable energy development is "moving at fairly relaxed pace," and hopes to reignite a more widespread push for alternative energy solutions.

"It is striking how this has fallen out of the public mind and off the congressional agenda," he said.

Holt also emphasized his view that the U.S. should focus on both the production and use of alternative energy sources, and expand the focus beyond generation capacity.

"It is not about gigawatts of installed capacity or the number of square feet of photovoltaics installed. It is about finding sustainable ways to produce enough energy for the nine billion people to use to get a satisfactory quality of life," he said.

Among the possible effective policy solutions will be those that correct the historically unstable pattern of financial incentives.

"This lack of certainty is affecting investment in the renewable sector in the U.S." said Mohamed El-Ashry, a senior fellow at the UN Foundation.

In addition, Martinot projects a slew of policies that will focus on facilitating the integration of renewables to the existing power grid.

All in all, renewables should not be thought of as a nascent market. The technology is rapidly expanding and the percentage of global electricity generation coming from renewables is growing every day. Industry insiders can only hope that this growth will continue even more rapidly than expected. Current data would certainly seem to support that lofty goal.