Prices Fall, Deployment and Investment Rise

WASHINGTON, D.C. – The United States saw continued growth in renewable energy, natural gas and energy efficiency in 2014, according to the third annual Sustainable Energy in America Factbook. The Factbook shows that U.S. deployment of sustainable energy increased as prices continued to fall and that investment in U.S. clean energy grew at a higher rate.

Analysts at Bloomberg New Energy Finance who prepared the Factbook for the Business Council for Sustainable Energy found that “over the 2007–2014 period, U.S. carbon emissions from the energy sector dropped 9%, U.S. natural gas production rose 25% and total U.S. investment in clean energy (renewables and advanced grid, storage and electrified transport technologies) reached $386 billion.”

“The 2015 Factbook clearly shows that America is on the path to a more sustainable energy sector,” said Lisa Jacobson, President of the Business Council for Sustainable Energy. “Our energy productivity is rising along with economic growth, while energy-intensive industries are onshoring production to the United States to take advantage of low energy costs. All of this is happening as investment in clean energy continues to grow and as new natural gas infrastructure continues to come online. These are strong positive signs for America’s economy and environment.”

The full 2015 edition of the Sustainable Energy in America Factbook is available at http://www.bcse.org/sustainableenergyfactbook.html.

Key trends in sustainable energy growth noted in the 2015 Factbook include:

The U.S. economy is becoming more energy productive, with “an outright decoupling between electricity growth and economic growth.” Between 1990 and 2007, electricity demand grew at an annual rate of 1.9% while, between 2007 and 2014, annualized electricity demand growth has been zero. Meanwhile, over those past seven years, the U.S. economy has grown by 8%.
The U.S. power sector is decarbonizing, with the contribution of renewable energy (including large hydropower projects) to U.S. electricity rising from 8.3% in 2007 to an estimated 12.9% in 2014, and production and consumption of natural gas hitting record highs in 2014. Since 2000, the Factbook shows, 93% of new power capacity built in the United States has come from natural gas and renewable energy.
Investment in U.S. clean energy is up again. The U.S. clean energy sector has seen $35–65 billion of investment each year since 2007, a significant increase over the annual investment of $10.3 billion in 2004. Overall U.S. investment in clean energy totaled $51.8 billion in 2014, a 7% increase from 2013 levels. The United States finished the year ranked second globally for new dollars invested in clean energy, behind China.

The Factbook also discusses the collapse of oil prices in 2014. While there is no explicit link between oil (which in the United States is used mostly for transport) and most sustainable energy technologies (which are used mostly in the power sector), the oil price shock has a profound global impact and may result in “second-order” effects that could impact U.S. sustainable energy, the Factbook noted.

“Against the backdrop of a surging economy and crumbling oil prices, major trends around decarbonization and improving energy productivity continued in the United States,” said Michel Di Capua, head of Americas research for Bloomberg New Energy Finance. “Low-carbon energy technologies stand to benefit from key policies proposed in 2014, including the U.S. Environmental Protection Agency’s (EPA’s) proposed regulation for the power sector and an innovative new vision for the electricity market in New York State.”

The Factbook also shows renewable energy and energy efficiency making significant strides across several metrics in 2014, including:

Renewables represent 205 gigawatts (GW) of installed capacity across the country. Wind and solar are the fastest-growing technologies, having more than tripled since 2008. Hydropower remains the largest renewable energy source at 79 GW, with biomass, geothermal and waste-to-energy representing another 17 GW but limited in new build by a lack of long-term policy certainty.
Wind and solar reaching grid parity in multiple regions. In 2014, wind developers secured power purchase agreements (PPAs) with utilities below the levelized cost of electricity for fossil-fired power and below the price of wholesale power in the Midwest, Southwest and Texas. Solar providers were also able to offer PPAs or leases to homeowners below the residential retail electricity price, reaching “socket parity,” while utility-scale solar plants in Texas and Utah secured PPAs at some of the lowest prices ever recorded globally ($50–55 per megawatt-hour).
The Pacific and New England regions made the greatest strides in energy efficiency. The Southeast and Southwest regions, meanwhile, have the greatest opportunities to increase efficiency. Across the United States, commercial buildings have showed the greatest progress on energy efficiency over the last several years.

While the United States is clearly heading toward more use of sustainable energy, the Factbook did show deviations from the larger trend. These include an increase of coal’s share in U.S. electricity generation from 37% in 2012 to an estimated 39% in 2013 and 2014; an increase in carbon emissions from the U.S. energy sector of around 3% since 2012; and a slowdown in utilities’ and states’ adoption of energy efficiency.

The Factbook notes that policy will play a central role in determining where the U.S. energy mix heads in 2015 and beyond. State, federal and international policies – including the EPA’s Clean Power Plan regulation on existing power plants; the global climate negotiations scheduled in Paris this fall; and federal and state-level support for renewables, efficiency and natural gas development – will all help determine the speed with which the trend toward sustainable energy develops in 2015.

The Factbook also contains extensive analysis, charts and data on a wide range of sustainable energy trends in 2014, including energy storage, oil and transportation, distributed energy, combined heat and power (CHP), carbon capture and storage (CCS), and natural gas infrastructure investment.

For more on the 2015 edition of the Sustainable Energy in America Factbook, get the facts at: http://www.bcse.org/sustainableenergyfactbook.html.

About the Factbook Partners

Bloomberg New Energy Finance (BNEF) provides unique analysis, tools and data for decision makers driving change in the energy system. With unrivaled depth and breadth, BNEF helps clients stay on top of developments across the energy spectrum from our comprehensive web-based platform. BNEF has 200 staff based in London, New York, Beijing, Cape Town, Hong Kong, Munich, New Delhi, San Francisco, São Paulo, Singapore, Sydney, Tokyo, Washington D.C. and Zurich.

Business Council for Sustainable Energy (BCSE) is a coalition of companies and trade associations from the energy efficiency, natural gas and renewable energy sectors. The Council membership also includes independent electric power producers, investor-owned utilities, public power, commercial end-users and project developers and service providers for energy and environmental markets. Since 1992, the Council has been a leading industry voice advocating for policies at the state, national and international levels that increase the use of commercially available clean energy technologies, products and services.

The Sustainable Energy in America Factbook was commissioned by the Business Council for Sustainable Energy and supported by the generous contributions of the following BCSE members: American Gas Association, American Wind Energy Association, Covanta Energy, First Solar, Hannon Armstrong, Ingersoll Rand, Johnson Controls, Jupiter Oxygen Corporation, Kingspan Insulated Panels, North American Insulation Manufacturers Association, Polyisocyanurate Insulation Manufacturers Association, Sempra Energy, Solar Energy Industries Association and Solar Turbines.

Posted on Bloomberg New Energy Finance

Since 2008, the solar industry in the USA has grown from less than $3B in 2008 to more than $15B projected by the end of 2013. During that same period, the Solar Energy Industries Association (SEIA)

Secured an 8-year extension of the solar tax credit in 2008 In the 2009 stimulus bill,
Secured the 1603 grant program in 2009 which brought in an entirely new group of investors into solar
And recently, the SEIA has come out with a new approach to solving the Chinese tariff case

Yet with all this financial growth of the solar industry, plus expanded responsibilities of the SEIA, my guess is that SEIA’s budget that is $9.2 million today has not kept pace with the growth of the industry over the past five years. It appears that when the solar industry’s profit margin started to shrink, the first priority of many members was to zero out growing their investment in SEIA.

Plus, over these years, our industry has asked SEIA to do a lot more work with the same limited funds. In discussions I have had with executive director Rhone Resch, he has noted that SEIA is dipping heavily into its reserve account to continue to expand markets for companies.

And our industry is in a David & Goliath war. SEIA is confronting Edison Electric Institute (EEI), which has a budget 10x larger.

Yet the 5X increase in industry revenues with a roughly flat SEIA budget does not add up. After all, SEIA is the official trade association of the US solar industry that helped to lobby for and stimulate this growth. This growth includes large utility scale solar electricity, distributed solar electricity, and the solar thermal industry.

The main thing that does not compute is that SEIA has less than 1,000 member companies in an industry numbering more than 6,000 in the US alone.

Yet we have had a sort of mutiny in the industry. In the past few years alone, solar was used as a symbol of failure for the loan guarantee program, a German solar manufacturer created a global trade war, and now a well-respected Arizona solar manufacturer on the board of SEIA decided to go to war with the whole solar industry on behalf of their utility customers.

In marketing terms, there are four stages to the growth of an industry. The pioneering stage when an industry is first formed and technology is first deployed. This pioneering stage is marked with technological advances and first mover companies.

The second phase is the growth phase marked by many companies entering the market and widespread acceptance of the product or service. This requires that companies in the industry cooperate to build the industry.

Third is the maturing of an industry. This is where the dozens of companies consolidate either through merger or attrition.

And, finally is decline. This is where a market runs its course. The classic example is buggy whips, displaced by the automobile. Or, right now we are starting to see the displacement of the personal computer by smart phones and tablets. And, we are witnessing the displacement of old energy sources like coal with solar.

Solar is in its growth phase. As a result, it is critical that all members of the solar industry work together to growth the industry. In doing so, each company will get its fair share of market. For example, while I founded SunEdison, it would be naïve of me to think that SunEdison will win every solar services deal. While we compete for projects, we must stick together as an industry.

That glue of our sticking together is the SEIA. Keeping the solar industry working together and growing revenues 30%+ per year requires a lot of work and coordination. And if we can grow the industry another 90% -- the bottom line is that it adds up for all of us.

At the end of the day, our industry is dependent on fair policy. We need to support our national trade association if we want a level playing field to stay in business.

So, who needs the SEIA? Answer: the solar industry. We are in this fight together.