The Growth of Renewable Energy & the Power of Tax Credits

( – promoted by Sue Prent)

Over the last month, there’s been considerable attention given to the growth in renewable energy throughout the United States.  First, in January Philip Bump at reported that nearly half the new capacity generated in 2012 was renewable. And on Tuesday, he reported the incredible result that 100% of the electric capacity added in December was renewable.

So I thought I’d take a closer look at the growth in renewable energy, as the debate over industrial wind in VT is heating up with opponents calling for a three year moratorium (See here and here, among others.)  

Particularly, let’s look at what exactly was accomplished in 2012.  I plotted total operating generating capacity from January 2012 through January 2013 to highlight the growth in renewable energy.

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As you can see, 2012 was a banner year for wind and solar, with yearly increases of 33% and 123%, respectively.  Overall, the contribution to the total operating capacity for these four energy sources increased from 5.5% in January 2012 to 7.1% in January 2013.  That’s real growth, folks.

The growth in renewable energy was caused by two factors.  First, technological improvements have driven down the price of solar and wind.  But with the price still being perceived as too high to trigger economies of scale, state and federal governments have made policy decisions to offer substantial tax credits, thus stimulating wide scale demand.  As the graph clearly shows, the demand for renewable energy has kicked in and renewable energy is becoming a real component of the U.S. energy infrastructure.  

To be certain, renewable energy is not going to replace coal, natural gas, or nuclear anytime in the near future.  But every increase in the use of renewal energy is a decrease in carbon entering the atmosphere, and for me, with three small children and the future I want to give them, that’s a step in the right direction.  And that is why the call to place a moratorium on wind power is misguided and foolish.

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