Renewables Industry has Bigger Bang for Buck

April 28, 2014


World Resources Institute:

The recent fall in clean tech investments is partly driven by the fact that renewable energy has become much cheaper in the past few years. You can buy more energy output for less cash than you could have two or four years ago. At the 2014 Future of Energy Summit earlier this month, Michael Liebreich, founder of Bloomberg New Energy Finance (BNEF), said that roughly 80 percent of the reduced investment in clean energy over the last two years is due to these price reductions. Solar module prices, for example, have declined by about 80 percent since 2008. Increased competition among wind energy suppliers has also reduced prices. Research from the International Renewable Energy Agency (IRENA) finds that wind energy prices could drop from 10-30 percent further in the medium to long-term.

With the costs dropping substantially, growth in clean energy capacity remains at record highs. This is in spite of economic and policy turbulence in many countries. The United States, China, and Japan in particular have been moving aggressively with solar photovoltaic (PV) installations. China installed a whopping 12 gigawatts (GW) of solar capacity—nearly triple the 4.5 GW deployed the year before. And the world’s total installed wind energy capacity grew by about 19 percent in 2012, followed by another 12.4 percent increase in 2013.

In short, the renewable energy industry is maturing—and investors are starting to take notice. Investors like Citigroup are becoming more optimistic in the industry, claiming that the “age of renewables” has begun. “Green bonds”—which direct investment towards environmentally friendly projects—are becoming more and more popular. Energy-smart technology firms, including Opower, are marching into the stock market. These are all indicators that renewables are stepping onto the mainstream financial scene.

Craig Morris in Renewables International:

While energy policy is a divisive issue in other countries across political lines, the Germans have been largely pulling in one direction for nearly two and a half decades.

In my home country of the United States, the situation is mixed. An argument can be made that a lot of progress with renewables has been made under Republican leadership, such as during Schwarzenegger’s tenure in California and George W Bush’s in Texas – or, for that matter, his term in Washington. Indeed, a comparison of the growth of wind and solar during the Bush years with Clinton/Gore is illustrative.

A broader look across the country would reveal similar progress under Republican leadership in states like Pennsylvania. But there is also no doubt that the backlash against solar largely comes from reactionary-conservative leaders in states such as Arizona and, now, Oklahoma.

Though it is hard to measure, my subjective perception is that the energy transition has been much less politically divisive in Germany up to now. Consider just these facts:

  • The original Feed-In Act of 1991 was adopted under Christian Democrat Chancellor Helmut Kohl
  • Kohl was also an early campaigner in raising awareness about climate change. He warned about the effects of global warming in Parliament in the 1980s, and at the climate conference held in Berlin in 1995 he threw in a poker chip to encourage others to follow suit: a 25 percent reduction in carbon emissions in Germany by 2005. (Other countries did not follow suit, so Germany roughly met that target by 2012 instead under the Kyoto Protocol, although its official Kyoto target was only 21 percent.)
  • A number of Christian Democrat politicians have become quite prominent. Former Environmental Minister Klaus Töpfer later went on to head the UN’s Environmental Program, and he is now on the board at German sustainability institute IASS. Chancellor Merkel herself was also Germany’s Environmental Minister under Helmut Kohl.
  • A number of Christian Democrat politicians not only support renewables, but specifically the grassroots Energiewende movement. Josef Göppel (whose website is an interesting mixture of green and blue, the color of his political party) is one example, and I read yesterday in Bloomberg that the CDU governor of Thuringia is another.
  • More than 2,000 churches in Germany have either photovoltaics or solar thermal. And that doesn’t include church investments in biomass and wind – or church-funded projects for renewables in developing countries.


Of course, it all started with a man who best represents the union of center-left politics and conservative beliefs: former US President Jimmy Carter who first put solar on the White House (solar thermal, not photovoltaics). He continues to serve as a model for Germans (I still hear his name regularly in conversations here).

I close with my best wishes to all of you for your Easter break – and with my music video (from my documentary released last year) retelling the story of the crucial role conservatives have played in the Energiewende is since the 1980s.

2 Responses to “Renewables Industry has Bigger Bang for Buck”

  1. Sir Charles Says:

    More about the German energy transition =>

  2. […] 2014/04/28: PSinclair: Renewables Industry has Bigger Bang for Buck […]

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