GMO at the beginning of 2016 market forces are driving the growth of renewable energy. By the end of last summer, GMO reported that solar was emerging as the least expensive source of energy on Earth. By the end of last year, these expectations were confirmed by a Bloomberg New Energy Finance (BNEF) report.
In 2016 solar capacity grew by 50 percent. Last year solar hit a record low price low of $29 per MWh or 2.9 cents per kilowatt-hour in both Dubai and Chile prompting BNEF chair Michael Liebreich to say, "Solar power delivers cheapest unsubsidised electricity ever, anywhere, by any technology."
According to the report, the cost of solar generation worldwide dropped on average 17 percent in 2016. In 2016 we saw 138.5 gigawatts (GWs) of new renewable capacity come online more than ten GWs ahead of the previous record of 127.5 GW that was set in 2015. What makes this even more noteworthy is the fact that this increase was achieved with a total investment that was 23 percent lower than in 2015.
Led by emerging-market economies, including China, India, and Brazil, solar became the lowest cost energy source in the world last year. In 58 developing countries the cost of solar dropped 66 percent compared to 2010 prices. The low cost of solar is enabling emerging markets to leapfrog past the costly approach to energy development we have seen in wealthier countries.
"It’s a whole new world," Liebreich was quoted as saying in a Bloomberg article. "After the dramatic cost reductions of the past few years," explained Liebreich, "unsubsidised wind and solar can provide the lowest cost new electrical power in an increasing number of countries, even in the developing world sometimes by a factor of two."
In the US solar was the largest single energy sector in 2016. According to the Energy Information Administration (EIA), utilities added 9.5 gigawatts (GW) of photovoltaic capacity to the US grid in 2016. According to Solar Energy Industries Association (SEIA) in the US togeether utilities and distributed solar accounted for a 14.8 GWs capacity increase in 2016.
US solar increased by almost 100 percent in the second to last quarter of 2016 and almost 200 percent compared to the same period in 2015. US solar capacity grew by 4,143 megawatts between July and September 2016. New solar capacity during this period represented 39 percent of all new US electric generating capacity.
An average of one new megawatt of solar generating capacity came online every 32 minutes between July and September. As a yearly average, the US added about 125 solar panels every minute in 2016, about double the pace of 2015.
The fourth quarter of the year likely broke the growth record set in the third quarter. Solar has grown at a prodigious rate in the past decade increasing 100 fold since 2006.
What about Trump?
While Trump has been unsuccessful on almost every front, he has managed to start dismantling America's federal regulatory regime. Many declared that despite Trump's electoral victory, his energy and environmental agenda will be countered.
Trump ran on a platform premised on the belief that fossil fuels are a more cost effective option than renewables. Clearly, the facts dispute the cost concerns associated with solar power. Republicans including Trump are either disingenuous or woefully misinformed when they argue that renewables are too expensive.
Despite the Trump administration's resistance to facts, solar will not be easily undermined. A Think Progress article quotes industry experts as saying that as long as federal tax credits for solar remain in place, market forces and state-level policies will have a larger effect on solar growth than federal policy.
"We do not anticipate the Trump presidency impacting negatively or positively the growth of solar," Kimbis told the Washington Post. "In fact, we think that no matter who’s in the White House, the solar industry is going to continue to grow tremendously."
Despite his crusade against regulations and love for fossil fuels Trump does not appear to hate renewable energy production as much as some had feared. As reported by CleanTechnica, new study from Trump's Energy Department is looking at a global plan to harvest 5-10 terawatts of solar power by 2030.
In a 2016 press release Cory Honeyman, GTM Research associate director of U.S. solar research said, "We’re seeing the beginning of an unprecedented wave of growth..." In the US solar is expected to triple by 2022. Globally solar prices are expected to keep falling and outcompeting fossil fuels.
Solar price declines will keep driving the growth of solar, but we cannot pretend that market forces alone will be enough to keep us below the critical threshold of 1.5 degrees C. However, solar may help to keep us close enough so that we will be able to close the gap once sensible governance returns to the White House.
For a comprehensive summary of information on renewable energy click here.
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