The real effect of solar energy on climate change

We are at a point in our history where humans have almost destroyed the planet with pollution. The latest climate reports are so alarming, a new solar revolution is bound to take place soon. We now have no choice but to adopt solar in a big way. Ten percent of the energy consumed across sectors in the United States was from renewable sources in 2016 (10.2 quadrillions Btu out of a total of 97.4 quadrillions Btu). U.S. consumption of renewables is expected to grow over the next quarter century at an average annual rate of two percent, higher than the overall growth rate in energy consumption (0.2 percent per year) supporting a business-as-usual scenario.

Renewables made up nearly 15 percent of electricity generation in 2016, with hydro, wind, and biomass comprising the majority. That’s expected to increase to 25 percent by 2030. Most of the increase is expected to come from wind and solar power. Non-hydro renewables have increased their share of electric power generation from less than one percent in 2005 to nearly seven percent at the end of 2016 while the market for electricity has remained relatively stable.

The role of renewable gradually increasing

In the transportation sector, renewable fuels, such as ethanol and biodiesel, have increased significantly during the past decade. E85 (ethanol transportation fuel) is expected to be the fastest growing renewable energy type, growing at an average annual rate of 9.7 percent over the next 25 years, although it begins from a very low base.

In the industrial sector, biomass makes up 98 percent of the renewable energy use with approximately 60 percent derived from biomass wood, 33 percent from biofuels, and almost 8 percent from biomass waste.

Uncertainty about federal tax credits, fuel costs, and economic growth will influence the speed of U.S. renewable energy source development. Factors affecting renewable energy deployment include market factors (e.g., cost, diversity, proximity to demand or transmission, and resource availability), policy decisions (e.g., tax credits, feed-in tariffs, and renewable portfolio standards) as well as precise regulations. At least 176 countries, more than half of which are developing, had renewable energy policy objectives in place at the end of 2016. Businesses with sustainability intentions are also driving renewable energy development by building their own facilities (e.g., solar roofs and wind farms), procuring renewable electricity through power purchase agreements, and obtaining renewable energy certificates (RECs).

Renewable energy's incentives

Two federal tax credits have supported renewable energy:

The production tax credit (PTC), first enacted in 1992 and subsequently revised, is a corporate tax credit accessible to a wide range of renewable technologies including wind, landfill gas, geothermal, and small hydroelectric.  The credit decreases installation costs and shortens the payback time of these technologies. The Consolidated Appropriations Act (2016) extended the ITC for three years and phases out the PTC by 2020.

States offer added incentives, making renewables even simpler to implement from a cost perspective.

A renewable portfolio standard obliges electric utilities to deliver a certain amount of electricity from renewable or alternative energy sources by a precise date. State standards range from simple to ambitious, and qualifying energy sources change. Some states also include “carve-outs” (requirements that a certain percentage of the portfolio be generated from a specific energy source, such as solar power) or other incentives to encourage the development of special resources. Although climate change may not be the prime motivation behind these criteria, they can deliver significant greenhouse gas reductions and other benefits, including job creation, energy security, and cleaner air. Most states allow utilities to comply with the renewable portfolio standard through tradeable credits that utilities can exchange for additional revenue. In states with a renewable portfolio standard, utilities consider cost, intermittency and resource availability in determining technologies that satisfy this requirement.

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