What is the current state of renewable energy in the US? Depending on who you listen to, 2012 could have been the best year ever, and 2013 is expected to be more of the same. 2012 wind turbine installations nearly doubled those of 2011. Is renewable energy fulfilling the expectations of it’s proponents?
This is hard to say. The number of solar companies declaring bankruptcy was alarming last year. The recent announcement of SunTech’s failure in China is extremely disturbing. If the Chinese aren’t breaking even on solar panels at this point in the learning curve, who can?
The wind market, despite a record year, continues to get a lot of bad press. A recently published research study from a top climate scientist suggested that if wind turbines were allowed to proliferate to the point that they could supply all the power needed worldwide, that the wake effects would have a more severely damaging effect on weather patterns than all the equivalent CO2. A serious indictment from the science community that should be wind power’s most staunch ally. That is even before we get to the financial performance of wind power that has been documented as low as 10% in some projects.
Historically the renewables market has been subsidized by federal and state tax incentives, and frankly, by direct transfer payment in communities where electric power utilities have been mandated by state governments to provide cash incentives for solar projects. In addition, the federal government has provided billions of dollars in low cost Department of Energy loans to companies developing technology. There is a lot of public money going into this arena without public consent and with a very poor track record of success.
The real shame of it will be that we are close to the goal of grid parity in solar and now that we are within sight of the goal, there won’t be a lot of private equity taking a risk where the government and all it’s billions has not succeeded. It appears likely that solar can achieve a cost of $1.50/Watt in the very near future, then solar can break even in less than 4 years even in markets where electric prices are $.11/kWhr making solar a reasonable investment. If the FHA were to allow new homes purchases to include solar, the market would take off without public money subsidizing the technology.
In the wind market, a new paradigm has to be created. New smaller equipment designs and the ability to locate wind in areas where there is high uptime are the only way wind can make sense. And there are people attempting to solve these design problems.
Regardless of which technology you like, solar or wind, both have a major weakness, the need for storage. Solar does not provide power and night and the wind doesn’t always blow. Smart Grid technology is a powerful resource that can help buffer the problem, but you can’t change the laws of physics, even if you are the President of the United States.
The increased number of installations in 2012 were largely the result of manufacturers recognizing that the federal funding programs were set to expire at the end of the year. Every possible project was pushed forward resulting in record installations. Will this be repeated in 2013? Hard to say. Many companies did not expect Congress to renew the subsidies, which they did at the very last minute.
What’s the future of renewables? Your guess is as good as mine.