Solar Power, Wind Power & Renewable Energy Industry Market Research

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Analysts at BP report that non-hydroelectric renewable power consumption grew by a respectable 17.0% worldwide during 2017 (the latest year for which data is available).  North American consumption increased by a substantial 13.5%.

World hydroelectric consumption increased by 0.9% during 2017.  North American hydroelectric consumption decreased by 6.7%.

Steady growth does not mean that renewables account for a large amount of the world’s energy.  Instead, non-hydroelectric renewables as a percent of global electricity generation accounted for about an 8.4% share in 2017, up from 7.4% in 2016.  Coal and natural gas (and to a lesser extent, nuclear energy) remain the primary sources of non-renewable electric generation in most of the world.

U.S. electric production from renewable sources was 17.1% of total electric power in 2017, up from only about 7.6% in 1970.  In this case, “renewable” includes conventional hydroelectric and geothermal, along with solar, wind and biomass.  (In 1970, such production was almost entirely from hydroelectric sources.)

Wind power has seen rapid growth worldwide.  Major technological advances in wind turbines (including much larger blades creating very high output per turbine and blades that suffer very little downtime and are thus more efficient), along with massive government incentives encouraging investment in wind generation, have fueled turbine installation.  Analysts at BP estimated total wind generation capacity worldwide at 514,798 megawatts in 2017. The Global Wind Energy Council forecast it to climb to 840,000 megawatts in 2022.  In 2018, U.S. wind capacity was 90,550 megawatts.

Solar power is enjoying significant technological innovation.  The important factors in solar are the percent of captured solar energy that is converted into electricity (which is climbing), and the cost per installed watt of potential output (which is declining).  The use of polymers has led to exciting, flexible solar panels, while nanotechnology is creating breakthroughs in solar technology as well. 

Analysts at BP report that installed global solar photovoltaic capacity was only 4,245 megawatts at the end of 2005.  By 2011, that number had soared to 71,251 megawatts, and in 2017 it surged ahead to 399,613 megawatts. 

Biomass energy (including the use of energy from waste, such as wood chips and landfills, and the production of bioethanol) has also grown rapidly over the long term, both in the U.S. and elsewhere.

As for nuclear power, both expensive to build and controversial as to its safety, the construction of new nuclear generating plants is accelerating rapidly in China, where demand for electricity is booming and dozens of new nuclear plants are planned.  Several new plants are also planned or underway in the UAE, India and South Korea.  However, a history of construction cost overruns and a vast regulatory burden make it virtually impossible to construct a nuclear plant today in the U.S. and EU.  Nonetheless, nuclear provides an emission-free alternative to solar and wind, and it is generally reliable 24 hours-a-day.  Today’s advanced nuclear plant technologies are vastly improved and are thought by many to be virtually fail-safe.

It should be noted that the use of renewable sources does not always mean clean power generation.  For example, burning wood or trash for energy under the wrong conditions can create significant pollution.  Also, the clearing of land, such as forests, for planting of biomass to be used in ethanol or biodiesel refining can be highly destructive to the environment while creating huge quantities of carbon emissions.  In addition, many types of renewable energy production require vast quantities of water.  These trade-offs continue to create significant debate and controversy.

In the U.S., emphasis on alternative energy and conservation has a varied history.  The 1973 oil trade embargo staged by Persian Gulf oil producers greatly limited the supply of petroleum in America and created an instant interest in energy conservation.  Thermostats were turned to more efficient levels, solar water heating systems sprouted on the rooftops of American homes (including a system that was used for a few years at the White House) and tax credits were launched by various government agencies to encourage investment in more efficient systems in buildings and factories that would utilize less oil, gasoline and electricity.  Meanwhile, American motorists crawled through lengthy lines at filling stations, trying to top off their tanks during the horrid days of gasoline rationing.

While some consumers maintained a keen, long term interest in alternative energy from an environmentally friendly point of view, most Americans quickly forgot about energy conservation when the price of gasoline plummeted during the 1980s and 1990s, and again in 2014.  Low gasoline prices were common for many years.  As advancing technology made oil production and electricity generation much more efficient, a long-term, oil price trend kept market prices under control.  (Although price spikes do occur from time-to-time.)  As a result, Americans returned to ice-cold air-conditioned rooms and purchased giant, gas-guzzling SUVs, motor homes and motorboats.  The median newly constructed American single-family home built in 1972 contained 1,520 square feet; by 2017 it contained 2,457 square feet.  More square footage means more lights, air conditioning and heating systems to power.  Meanwhile, federal and state regulators made efforts to force automobile engines and industrial plants to operate in clean-air mode, largely through the use of advanced technologies, while requiring gasoline refiners to adopt an ever-widening web of additives and standards that would create cleaner-burning fuels.

Fortunately, the first energy crisis in the early 1970s did lead to the widespread use of technology to create significant efficiencies in many areas.  For example, prior to that time, as much as 40% of a typical household’s natural gas consumption was for pilot lights burning idly in case a stove or furnace was needed.  Today, electric pilots create spark ignition for gas burners on demand.  Likewise, today’s refrigerators use about 70% less electricity than models built in 1970.  Many other appliances and electrical devices have become much more efficient, through better design and engineering, better insulation, more efficient motors, efficient lightning and smarter building controls.  While the number of electricity-burning personal computers proliferated, computer equipment makers rapidly adopted energy-saving PC technologies.

Renewable energy sources, cleaner-burning fuels, fuel-efficient automobiles, as well as homes and buildings that utilize energy-efficient materials and controls are of great appeal to the large number of consumers worldwide who have developed a true interest in sustainability or in protecting the environment.  For example, surveys have shown that many consumers are willing to pay somewhat more for electricity if they know it is coming from non-polluting, renewable sources.  Nonetheless, the vast, recent drops in the market prices of oil and natural gas pose a significant challenge to alternative and renewable energy sources on a purely economic basis.

Hybrid gasoline-electric automobiles made by Toyota, Honda and others are selling reasonably well in the U.S. and elsewhere.  Fully-electric vehicles are slowly growing in popularity while batteries are falling in cost.  Virtually all major auto makers are shifting more and more of their production to electric or hybrid vehicles over the long-term.   Ford has adopted aluminum as a primary metal for its popular F150 pickup trucks, savings hundreds of pounds in weight per truck and dramatically increasing fuel efficiency.  Prototype editions of hydrogen fuel cell-powered automobiles have been on the market in very limited quantities.

Meanwhile, many municipalities, such as the city of Seattle, Washington, have invested in buses and other vehicles that are hybrids or run on natural gas. 

Legislation at state and national levels will continue to boost renewable energy development and conservation technologies on a global basis.  In the U.S., governments in more than one-half of the 50 states have passed stringent legislation requiring that an ever-growing percentage of electric generation comes from renewable means.

Technologies with a reliable return on investment, such as hydroelectric, remain extremely desirable.  Conservation through advanced materials and technologies, such as retrofitting existing buildings with more efficient windows, insulation and air conditioning, is growing, and a good return on investment and increase in property values are typical results. 

Bioethanol and biodiesel, from an economic and environmental point of view, are questionable at the least, and extremely misdirected at the worst.  Some production of bioethanol appears very efficient, particularly in Brazil where easily-grown sugar cane is the feedstock.  However, in the U.S., the diversion of corn and soy from the food chain to the energy chain for ethanol or biodiesel may be a very bad idea from a wide variety of measures. 

Advanced technologies that capture carbon dioxide and utilize it to grow oil-producing algae appear to be a somewhat promising alternative source for oil, but much research and development remains to be done in this area, and costs remain high.

At least two geothermal energy projects, where deep holes are drilled to tap the high temperatures of the inner Earth, have recently been cancelled due to concerns that these activities cause earthquakes.  Tidal energy looks promising, but both installation costs and maintenance remain huge obstacles.  Nonetheless, technologies are advancing rapidly in this field, and many projects are underway or in place.

The bottom line is that many types of renewable energy production simply cannot exist without substantial government investments, incentives, loans and/or tax breaks.  Hydroelectric is a rare exception, as it produces power at very low cost.  In nearly all other cases, the largest projects (utility-scale) based on solar, wind or wave power can only be funded through high levels of government support.  Consumers of such power will pay much higher rates for electricity, either directly through their power bills or indirectly through their taxes.  It remains to be seen whether technologies in these fields can advance to the point that such renewable power sources can become economically viable on a self-sustaining basis.

Smaller-scale, rooftop solar power installations have become extremely popular in sunny climates in the U.S. and elsewhere.  The cost of solar cells has plummeted to the point that solar power produced at homes and commercial buildings is becoming economically viable after government incentives are factored in.  While the solar cells themselves are now relatively cheap, installation remains costly.  Meanwhile, solar cells require regular maintenance, and their efficiency degrades steadily as they age in place. 

Utility-scale solar is a different story.  The exceptionally high investment required, along with a lack of further federal loan guarantees, means that new projects for extremely large, utility-scale, solar installations are unlikely to launched in the U.S.  Many of the largest projects involving concentrated solar power have been financial disappointments.

In late 2015, the City of San Diego, California made the startling announcement that it hopes to transition to using 100% renewable energy by 2035, while cutting its greenhouse gas emissions in half.  The city also plans to shift one-half of its fleet of vehicles to electric power and to recycle 98% of the methane gas produced by its sewage and water treatment facilities.

The renewable energy sector will continue to evolve rapidly, as new technologies offer breakthroughs and greater efficiencies are reached.  The biggest gains will occur when powerful new batteries are finally developed that make it cost-effective to store solar and wind power where they are produced, for release as needed even when wind or sunlight are not available.