This past weekend, we Americans celebrated our nation’s birthday, capped off perfectly by the USA women’s soccer team’s sensational 5-2 victory in the World Cup final. As we hit the halfway point of 2015, the clean-energy industry also has much to celebrate, much of it in the month of June alone and much of it financial.
Consider all of these developments in the past month:
- The White House announced $4 billion in clean-energy funding commitments, including $1.1 billion from five large institutional investors such as the University of California ($91 billion in assets) and TIAA-CREF ($611 billion), with the balance from major foundations and nonprofits.
- Bill Gates quite literally doubled down on financing innovative renewables technologies. The software mogul-turned-clean energy investor told the Financial Times he would add an additional $1 billion over the next five years to his $1 billion already invested in clean-tech companies and the venture capital firms that back them.
- Another tech mogul, Masayoshi Son of Japanese telecom giant Softbank, went even further. Already a major funder of large solar energy projects in Japan, Softbank committed $20 billion for solar in India – aiming to help grow that market to 100 GW in 2022 from 3 GW today. (As the saying goes: a billion here, a billion there, pretty soon you’re talking real money.)
- Sixty percent of large investment firms plan to invest in solar power projects for the first time in the next five years (including 32% in the next year), according to a survey released in June by solar PPA market maker Wiser Capital. Eighty percent said they want to “support a clean-energy future” and more than 60% are confident in the chances of high ROI.
- At the very end of June, China upped its commitment to reduce greenhouse gas emissions by 60-65% from 2005 levels by 2030 (up from its 40-45% pledge made in 2009), including a goal to receive 20% of its primary energy from non-fossil fuels by 2030. The announcement was part of a slew of new GHG cut commitments from the U.S., Brazil, and South Korea, in advance of the United Nations climate talks in Paris later this year.
A great driver of all of this recent momentum is the rapidly changing economics of clean energy. Headlines about record-low prices for solar and wind power in a myriad of regions appear almost daily. To cite just two examples, Michigan utility DTE Electricity has asked regulators to approve a rate cut because of falling wind prices in the state, while Austin Energy, seeking to procure 600 MW of solar in Texas, received developer bids at less than 4 cents per kilowatt-hour.
Those are just two examples of a broad-based global trend that shows no signs of slowing down. A June report from Bloomberg New Energy Finance predicts that wind power will become “the least-cost option almost universally” within 10 years, with prices falling 32% (from today’s already competitive levels) by 2040. And solar will join wind as cheaper than fossil fuel-fired energy by 2030, with prices dropping 48% by 2040.
Talk about a tipping point. These new economic dynamics, along with other technology and cost advances particularly in energy storage, are why states, cities, corporations, and nations can now set once-unthinkable targets for generation from renewables without breaking the bank. In more news from the month of June, Hawaii (100% by 2045) and Vermont (75% by 2032) both signed unprecedented renewable portfolio standards (RPS) into law. And in California, which is 19 times larger than Hawaii and Vermont combined, the state
Policy drivers like these will continue to be critical to
But the court’s ruling does not change the fundamental economics of energy: coal is simply no longer a cost-effective choice for
Wilder is Clean Edge’s senior editor, a blogger about clean-tech issues for the Green section of The Huffington Post, and co-author of Clean Tech Nation and The Clean Tech Revolution (both with Ron Pernick). E-mail him at email@example.com and follow him on Twitter at @Clint_Wilder.