Policy Solutions

Renewable Energy

Energy without Emissions

Thanks to technological advances and policy incentives, the costs of onshore wind and solar photovoltaic (PV) energy have declined by 75 percent and 74 percent respectively since 2008, making wind and solar the cheapest sources of new generation in many parts of the country.

Over the same period, wind grew from 0.4 percent to 6.6 percent of U.S. power generation. Likewise, solar grew from 2 million megawatt hours (MWh) in 2008 to 96 million MWh in 2018 and now accounts for 2.3 percent of total electricity generation in the U.S.

Continuing these trends will require further innovation in the design, production, siting, and operation of these renewable energy sources.

Market Challenges

  1. Market Rules

    Today, wind and solar are the cheapest sources of new electricity generation in many parts of the U.S., but fundamental changes to power markets are necessary to further expand the deployment of renewable energy nationwide. Currently, operators meet demand for electricity on the grid largely by turning fossil-fueled generating plants on and off—a process called dispatching. As more electricity comes from renewables, there will be fewer of these dispatchable plants available to adjust for demand.

    To accommodate increasing shares of renewable energy, markets will need to incentivize flexibility in demand for electricity. In addition, current grid operations, market rules, and environmental policies don’t fully value the services that new technologies and system-management practices can provide to reduce GHG emissions. Until these evolutions occur, renewable energy growth across the country will be constrained.

  2. High Capital Costs and Access to Capital

    The capital costs of large-scale, land-based wind and solar technologies have declined impressively over the past decade, but we will need a broader suite of renewable technologies to decarbonize the power sector in a cost-effective way. Other renewable technologies, such as offshore wind and concentrating solar power, still face high capital costs relative to incumbent fossil generators. Because these technologies are earlier in their deployment, financial institutions also tend to perceive them as riskier investments, leading to higher financing costs. These costs often trickle down to the consumers, disproportionately affecting low-income and marginalized communities.

  3. Siting Renewable Generation

    Wind and solar are land-intensive generation sources compared with fossil generation and need to be built in areas with plenty of sun or wind. If renewable energy is going to continue to play a large role in the U.S. energy system, it will need better access to optimal locations. Federal lands and waters are home to some of the best renewable resources in America, but some current permitting rules can slow or prevent developers from accessing them.

Technology Innovation Examples

Phases of Technology
Research and Development
Validation and Early Deployment
Large Scale Deployment

The fundamentals of generating power from wind have not changed much over time: large blades rotate in the wind, spinning a rotor that drives a turbine and generates electricity. What has changed are the cost and performance of wind-generation technologies. Technological innovation and growing markets have enabled the successful large-scale use of wind power around the world. Since 2008, the price of wind energy has dropped by 75 percent, while installed wind capacity has more than tripled. Wind power now provides more than 6 percent of U.S. electricity.

Taller wind turbines and larger blades can improve performance and open more areas of the U.S. to wind development. These trends, along with further performance and cost improvements, can drive further deployment of onshore wind technologies.

Onshore Wind
Advances in taller wind turbines with larger blades can help onshore wind power provide an increasing share of U.S. electricity.

Offshore wind technology works much like onshore wind, except the turbines are in bodies of water—generally oceans or lakes. This brings both advantages and challenges. High-quality offshore wind resources tend to be located closer to major coastal population centers compared with their onshore counterparts. This reduces the need for substantial transmission buildout, and capacity factors are generally higher offshore as well. Maintaining offshore turbines is also more difficult, though lessons can be drawn from decades of experience maintaining offshore oil rigs.

Since turbines can be placed in water with varying depths and sea-floor composition, different types of turbine foundation are needed. Though most commercial offshore turbines today use fixed foundations, floating foundations allow turbines to be deployed in deeper water where wind may be stronger.

Offshore Wind
While fixed foundations are a proven technology, demonstrations of floating foundations are needed to enable offshore wind deployment in deeper waters.

The amount of solar energy that hits Earth every day is enough to power the world many times over with carbon-free electricity. Solar panels convert solar energy into usable power by using the photovoltaic effect to generate direct-current electricity. Continued innovation and increasing scale have made solar power directly competitive with incumbent fossil generation in many regions.

Continued cost reductions can further drive the use of solar power on the grid and make it possible for solar to decarbonize other economic sectors—through the production of low-carbon transportation fuels and industrial materials, for example. While most solar cells today are made of silicon, a new generation of technologies made of new materials, such as perovskites, could bring down costs even further. Tandem solar cells incorporating multiple materials could also improve efficiency and further reduce overall system cost.

Solar Photovoltaics
A solar cell is composed of p-type and n-type semiconductors, which form an electric field at the p-n junction. When sunlight hits the solar cell, energy from photons transfer to electrons, creating electron-hole pairs that flow in opposite directions to create an electric current.

The world’s oceans are a vast source of renewable energy that is typically more predictable than wind and solar power. Promising ocean energy resources that could provide significant amounts of carbon-free power include wave energy, ocean-current energy, and in some regions, tidal energy.

Of these technologies, wave and tidal power have made the most progress to date. However, due in large part to ocean conditions, today’s technologies are not yet cost competitive with other sources of electricity. A new generation of transformational ocean energy technologies can unlock the carbon-free energy resources that exist in oceans all around the world.

Ocean Energy
Research in a variety of technologies is needed to reduce costs and increase reliability of ocean energy.

Renewable Energy Policy Recommendations