From the BusinessForward Foundation
Over the past two years, Business Forward has organized dozens of energy and climate briefings for business leaders across the country. At these briefings, policymakers met with executives from energy companies and the companies they
serve. In each case, the discussion focused on four key questions:
- Can wind and solar compete with coal and natural gas on price, at scale?
- Is it reliable?
- Are government subsidies distorting the market?
- Is America still leading on energy?Testimonies from energy executives at those briefings confirm the latest research: Recent investment has generated a “virtuous cycle” that is driving costs down and creating new demand – and technological breakthroughs are accelerating this cycle.
As businesses rely more on renewable energy, the challenge of “balancing” energy production grows, but improvements to the grid, better energy management, and new storage solutions are promising.
Recent investments in solar, wind and other new energy technologies are in line with historic investments in other promising, high-risk alternatives such as nuclear power, deep water oil rigs, and clean coal.
The United States maintains its lead in early stage investing, but we are substantially behind the EU and China on R&D and investment. We encourage incoming officials at the U.S. Environmental Protection Agency and U.S. Department of Energy to consider these findings as they plan for the next Congress.
Question 1: Can renewable energy compete?
Record investment has created a “virtuous cycle” that is reshaping our energy economy: falling prices for wind and solar are driving more demand, which attracts more investment, which drives prices down further, which creates even more demand, and so on.
- Over the last seven years, wind power capacity more than tripled, and solar power capacity increased 30-fold.
- During that same period, the cost of wind power fell by 41%, utility solar installation prices fell by 64%, and consumer solar prices fell 54%. Industry experts predict those costs could drop another 35% by 2050.
- In 2015, wind and solar accounted for 66% of new capacity installed in the U.S. Industry experts estimate that wind power could meet 20% of America’s electricity needs by 2030 and 35% by 2050, while solar panels on homes and businesses could provide as much as 39% of America’s electricity needs, if deployed universally.
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