If recent predictions are to be believed, there's an exciting future out there for renewable energy. After almost a decade of underestimating the growth trend of sustainable energy sources like solar, it would seem like the renewable energy business is due for a boom in the coming decade.
Flipping the Switch
For a number of reasons, the world is long overdue for expansion in the renewable energy business. Beyond the numerous positive health and environmental effects that renewable energy brings to the planet, there's also the cost factor. Right now oil, natural gas and coal represent the most cost-effective ways of getting business done. The progress that we have made in harnessing sustainable sources of energy like solar, however, point to a better future with cleaner sources of energy that also prove to be much more economically friendly.
It is hard to expect that we will free ourselves of fossil fuels entirely over the next ten years, but there is data evidence to support a belief that we will get much closer as we near a tipping point where renewable energy becomes more cost-effective and reliable.
For as long as man has had light, those lights have largely been powered by fossil fuels. Weaning ourselves will be like nothing else ever undertaken by human hands. That makes it hard to see the path before us. Depending on whom you ask, natural gas or coal may be the first fossil fuel replaced by wind and solar. There's no doubt anymore, however, that the switch will happen and until very recently, it was not a noteworthy concern.
Much of the effort will come down to the infrastructure we will be able to get into place, and how quickly.
Follow the Money
As with any industry, one of the most important factors to look at when forecasting is where those with the deepest pockets are making their investments.
After downplaying the importance of renewable energy for a long time, the International Energy Agency (IEA) released in October their findings ahead of the World Energy Report, which dropped in November. What they projected was simply staggering.
Projections in 2002 estimated that by 2027, the world would be producing around 50 gigawatts worldwide via solar energy. That projection was increased in 2006, still hovering at less than 100 gigawatts. Of course, those estimates were blown away by 2012, leading many to rightly complain that the IEA was being too conservative in their estimates for the growth of the renewable energy business. Currently, more than 200 gigawatts are being produced by solar energy alone.
Current estimates for solar see it pushing past 800 gigawatts per year in the next decade, a far cry from the 400 gigawatts the IEA projected by that time in 2006. It is clear that renewable energy is here to stay, and is well on its way to becoming the major source of energy worldwide.
Besides the forecasts, there is hard data that continues to come in about the growth of solar. For the first time, solar power topped natural gas in new energy installations in the United States. Solar power was the choice in 29.4 percent of homes in America. Those installations were estimated to bring the total operating power of solar installations in the U.S. to 25.6 gigawatts, doubling what was installed in 2015. It is clear that solar power is being positioned for even more growth in the next decade.
By 2012, it is estimated that solar power in America alone will account for 100 gigawatts of total energy.
What is Spurring the Growth?
One of the major factors in the huge increase in installations in the U.S. last year was a solar investment tax credit which offered a 30 percent tax credit for residential and business solar installations. The credit, enacted in 2008, was set to expire in 2016, but instead was extended through 2019. While it is probably safe to assume that growth will temper a bit due to the extension of the deadline, experts expect that the U.S. will still be among the top five nations in the world in terms of solar installations. It is fair to say that the prognostic for those in the renewable energy business is excellent.
Another factor in the growth of solar power is the falling price. The cost has fallen by 70 percent over the last ten years, a trend that is expected to continue as more funding is pumped into the technology and innovation of the renewable energy business. Falling prices seem to be in lockstep with the growth in new installations every year since 2009. There's no reason to expect that there will be a change over the next 10 years.
Of course, all the signs pointing to growth in the renewable energy business also means one more thing for the economy — jobs. Currently over 209,000 Americans work in the solar industry, more than double the amount that was working in the industry as recently as 2010. Forecasts of continued growth bring with it the forecast of more jobs. It is expected that the number will grow to 420,000 employees across the U.S. by 2020, with more to come in the next decade.
Overall, it is an exciting time to be involved in the renewable energy business in this country. As technologies continue to be improved upon, there is reason to hope that just like in the past decade, solar power and other renewable energy sources will only continue to grow at an exciting rate.