Investments made as a result of the American Recovery and Reinvestment Act, passed in February 2009, have spurred energy innovation and boosted the development of renewable energy sources, according to a report released this week by the US Department of Energy (DOE). More costly sources, such as solar power, will also become less expensive as a result.
According to the report, the US will double domestic renewable energy generation by 2012 from the 28.8 gigawatts (GW) of solar, wind, and geothermal generation installed as of 2008, to 57.6GW by the end of 2011 – enough to power 16.7 million homes.
The Recovery Act has contributed more than $23 billion to the development of renewable sources of energy, such as solar, geothermal and wind power. It was a huge factor in Iberdrola Renewable’s decision to make significant investments in US projects over the past year, according to spokesperson Paul Copleman. Iberdrola Renewables is the second-largest wind operator in the US, with more than 3,800 megawatts (MW) in operations. Over the past two years, it has invested more than $3.5 billion in US projects.
“In part because of the stimulus grants, Iberdrola Renewables announced in 2009 that we intend to invest an additional $6 billion in renewable energy facilities throughout the US by 2012,” Copleman said.
He says that the previous federal vehicle for incenting wind projects – "the on-again/off-again production tax credit" – had become all but useless due to the economic meltdown. "Before the stimulus bill passed, we were concerned that our 2009 investments would be about half of our investments in 2008, which amounted to about 1,000MW. With the passage of the stimulus package, however, we were able to match our 2008 US investments, and stay on track to build 2,000MW and invest $6 billion through 2012.”
According to the DOE report, the Recovery Act has also put the sector on track to cut the cost of solar power in half by 2015. It predicts the cost of power from rooftop solar panels will drop from $0.21 per kilowatt hour (kWh) in 2009 to $0.10 per kWh in 2015, which is equivalent to typical household electricity rates. It also predicted that rooftop solar power could drop as low as $0.06 per kW by 2030.
The cost of power from utility-scale solar projects will also drop from $0.13 per kWh today to $0.06 in 2015, according to the report, which is equivalent to the cost of wholesale utility power.
The week on Risk.net, March 10-16 2018Receive this by email