Despite Negative Hype, Green Energy Revenues Rapidly Expanding

Solar, wind and biofuels saw global revenue expand by 31% in 2011. With all the negative hype put out by Big Oil and its acolytes, you’d have thought the green energy market had crashed rather than growing by a third.

But investment in green energy rose only 5% over the year, which tells me that somebody is making a lot of money and others are losing out. Green Tech Media reports,

“…costs of solar panels fell by more than 40 percent last year, while installations grew by 69 percent, yielding a 29-percent increase in solar market revenues last year, Clean Edge reported.”

In the US, solar installations more than doubled, with 1.8 gigawatts in capacity added. That is roughly like two small nuclear plants.

There are indications that solar photovoltaic cells will will fall rapidly in price because of technological breakthroughs. Even with relatively low natural gas prices, the likelihood is that over the next decade the renewables will be decisively less expensive than hydrocarbons and the main obstacles will be an old 20th century energy infrastructure built for coal, gas and oil.

Wind power turbines were also put in at record rates throughout the world in 2011, with China leading the way. By 2020, China will have large numbers of mega-wind installations, generating 148 gigawatts of power.

The US is falling behind on wind installations. It only installed 6,800 megawatts worth in 2011. Altogether, wind now generates enough power to meet electricity demand in 10 million US homes. If there are roughly 60 million US households, that would mean we only have 50 million to go!

There are lots of growing pains in this industry. Many startups will fail or be absorbed. An old electricity grid is often an obstacle. Battery power and life is still too limited. But we should be suspicious of the negative tone of a lot of press and political comment on renewable energy, since any business that expands revenue by a third in one year is anything but a basket case.

11 Responses

  1. “In the US, solar installations more than doubled, with 1.8 gigawatts in capacity added. That is roughly like two small nuclear plants.”

    Sorry, but it’s not. You can’t directly compare the nameplate capacities of two such disparate technologies. The capacity factor of a modern nuclear plant is in excess of 90%, while PV installations have a capacity factor of 15-20% depending on latitude and climate.

    In terms of actual electrical generated, a nominal 1.8 gigawatts of installed PV is only equivalent to a fraction of one small nuclear plant.

  2. Growing pains indeed. In South Carolina a company from Conn.told churches and schools that their company would give them the solar panels if they paid for the labor to install. Churches and schools have been looking for a way to reduce their, sometimes, staggering energy bills.

    In steps utility company South Carolina Electric and Gas, who said to the solar panel comapany.”hold on…you’re creating energy and you have to be licensed to do that.” A stop order was placed on all of their projects and the company left the state.

  3. Juan: Check the math (or the source) of the Clean Edge report on the growth in solar market revenues last year. The citation might be accurate, but it’s very misleading. If the only costs of installations were the solar panels, and the cost of those fell by “more than 40%,” then revenues would have been about flat. Not 29% higher. It’s a multiplicative function, not an additive one. The total cost per installation could have “only” declined by around 24% if a 69% increase in installs generated a 29% increase in revenues. In the likely event that the installation entails costs in addition to the cost of the panels themselves, it would be a mere coincidence if the numbers cited happened to work. Not because 69-40=29.

    In the context of your point, this might be a nit.

  4. Please don’t forget that solar and wind installed maximum power is not the same as usable average power from a baseline power station(coal or nuclear)running at 95% utilization.

  5. If we aren’t early adopters, we can reap the benefit of mass production techniques and advances in technology, like third-world countries that won’t bother hard-wiring every small village for telephone service, because they can install a few cell towers much more cheaply instead.

  6. A friend of mine who lives near Ann Arbor,MI recently put up a wind turbine costing $60,000. The utility company will only be required to purchase the amount of electricity that he historically used in his household. He will not be paid for an excess generated Moreover there are limits on how many people are allowed into this program. Current business/government policies clearly do not encourage a shift to wind and solar energy. It seems to me that we need to rethink and redefine utility companies not as producers but as transporters of energy. Laws must be changed to require energy companies to pay for clean energy generated by individuals and groups.

  7. My one question: Why is Geothermal so rarely discussed? Installations can be around the size of a house, and easily placed near existing transmission infrastructure, would be a reliable baseline for use with renerwables, and fits the energy sector’s gatekeeper model of centralized power generation.

    • No panaceas anywhere. Some geothermal projects have “aurprisingly” been related to “sudden release of stored litho-energy,” aka earthquakes, bad enough to cause some significant damage. link to popsci.com

      But hey, to some people, that’s a feature, not a bug, including the terminal optimists who think

      “This side effect could potentially be beneficial as well. By lubricating fault lines and inducing microseismicity, you could be releasing built up pressure and preventing a larger more damaging earthquake.

  8. A recent Wired article had a Republican congressman admitting the real reason subsidizing solar technology in the US was hopeless was that China had already commoditized the market for low-tech cells. As in so many things, it’s over, China has won. Now we sit back and see how the Chinese use this market power.

    It may dismay us to see the 3rd World jump ahead of us in renewable energy, but it is more logical for solar cells to be sent to the places that have the most sunlight or burn fossil fuels in the most inefficient way. Since wind turbines are harder for China to export here, and require more jobs to build and operate here, we can still do useful things.

    The big question is, how do we free ourselves of our panic every time the price of gasoline reaches a new high? No matter how much oil we produce, it must be sold into a world market pumped up by Chinese demand. I can’t believe that so few Americans can understand this.

  9. Professor, I greatly appreciate your many contributions, but the inclusion of biofuels is a mistake and has nothing to do with green. Do you mean the biofuels that cost more btu to produce than they possess? The biofuels that produce 10-20% less fuel economy in internal combustion engines and harm many older vehicles in the national fleet causing incalculable damage? The biofuels that, because they give less fuel economy, effectively gift states a brand new biofuel revenue stream based on reduced consumer miles travelled vs fuel taxes collected? No wonder government likes biofuels.

    Biofuels may might maybe have a place, but it isn’t on the highway. It is in cogenerators, where all IC engines are destined to end up, where the 75% wasted by almost all IC engines produce is retained for other productive uses. Yes, we–all of us–currently waste about 75% of all the dollars we spend on gas for our cars and trucks, and biofuels for vehicles do nothing to stop that waste.

    We are running out of time to have a coherent, comprehensive, useful, INFORMED national debate about how we head into the future, and the sub-basement quality of the “debate” about biofuels illustrates how very far we have to go before our actions stop being self destructive and come close to being productive.

    Our national problem is systemic–hard wired into the system– as DSmith and Kronoberger point out.

    Make no mistake about it, the mighty US will fall flat on its ass from its own stupidity if it doesn’t begin to use some of the brain cells it likes to think it is blessed with.

  10. I just keep thinking of what all those bazillions of dollars spent on the current GOP clown parade could do if they were redirected at green energy. Or on preventing the accelerating extinction of the world’s great apes. Or on the effort to protect our resources of fresh clean water or on the peoples who drink contaminated water because they have no other choice.

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