Renewables are Booming, Despite Falling Subsidies
According to research firm Bernstein, solar energy alone could power nearly 10% of America’s electricity demand by 2019. The figure is over 30 times what it is today, underscoring just how quickly solar – and renewable energy – are displacing traditional power sources.
The transition has been especially rapid in the last decade, with as much as half of the development being registered by developing economies such as China, India and Brazil.
However, what’s most interesting is that renewables are surging ahead even when support such as subsidies and tax credits is cut as happened in Italy, Germany and UK.
This is because their costs have dropped dramatically – down by 75% for solar systems since 2000 – making them an attractive energy choice even without any support. And the great thing about renewables is – as a technology, the more they are used, the cheaper they get. That makes them fundamentally different from limited fossil resources. Growth is spurred even more by technological advances in the efficiency of energy conversion, and in terms of manufacturing, by economies of scale.
Renewables Powering the Future
The trend has been so positive (especially for solar) that the Rocky Mountain Institute – a US think tank – estimates that US commercial consumers who depend entirely on the grid today could draw only 25% of their electricity from the grid by 2030, and possibly less than 5% by 2050.
A further game changer is storage technology that is also getting cheaper. For example, the institute cites a hypothetical example of Westchester in New York, stating that the average monthly bill for a house in 2030 would be $357 for grid electricity, whereas it would be only $268 for the house when using a domestic solar system with battery storage.
Therefore, if the trend continues, globally renewables could power a fifth (20%) of the world by 2030 (they currently power only about 10%, excluding hydro-electricity).
Although, as the Economist warns, for this level to be achieved, and for the world to tackle global warming and climate change, there has to be a major step up in terms of renewables’ efficiency of energy conversion. Only then will they be truly competitive against traditional sources of energy.