The Rise of Renewables

A few facts put the astounding rise of renewable energy in perspective. Over the past five years, solar generating capacity has increased 16 times. Austin Energy signed a power purchase agreement to buy solar energy at a price considerably lower than any competing energy source (less than 5¢/kWh). Solar is such a strong competitor that coal companies are going bankrupt. Electric utilities may never recover their investment in fossil fuel generating facilities. Wall Street firms are warning investors not to buy utility bonds. A new solar thermal plant in Nevada will produce electricity night and day via an energy storage component, eliminating the biggest argument against solar—that it's intermittent. Coal plant subsidies are in danger of elimination while solar subsidies are being phased out. A level playing field favors solar substantially more than fossil fuels. At the same time, coal is being forced to pay for its pollution for the first time in history. In 2009 the Energy Information Administration predicted that it would take more than two decades for USA wind capacity to reach 40 gigawatts. It has already passed 60 gigawatts. The cost of solar photovoltaic panels has dropped more than 99% in the last 40 years, from $75 per watt to 60¢ per watt. The trend will continue until solar panels are as ubiquitous as smart phones. A new solar power system is now installed on an American roof every three minutes. The boom in solar is turning families and business owners into prosumers who sell electricity back to the utilities, upending their business models and threatening to eventually push them into bankruptcy. NRG Energy CEO David Crane says the utilities are dinosaurs, clinging to obsolete business models. “They’re fighting a classic rearguard action against the inevitable conquest of clean distributed energy,” he says. “But when you have something better and cheaper, it can go viral fast.” The net result: electricity bills will be dropping over time.

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