Renewable Energy Industry Overcomes Slow Economy with Solid Performance, Prospects
Closing the year with a look back at the renewable energy industry in 2009, all indications suggest that renewable resources continued to grow as a critical energy solution. Furthermore, with the onset of a new year, the prospects for renewable energy markets appear to be favorable.
The 25x’25 Alliance was buoyed by recent findings that a comeback in private investment in clean energy that began with the second quarter of 2009 is being sustained. According to the research firm, Greentech Media, capital investment in green technologies roared back from a paltry first quarter and a moderately improved second quarter with $1.9 billion invested in the third quarter of 2009. That’s up from $836 million in the first quarter of 2009 and $1.2 billion in the second quarter. Solar power led all investment segments with more than $575 million, followed closely by biofuels, biomass, and gasification deals at $512 million.
Those numbers still fall short of the highs achieved in 2008, but mark a steady upward trend that was supported by government policies and funding enacted earlier this year. A report out of the White House last week says the American Recovery and Reinvestment Act, or stimulus bill, is on course to double the nation’s renewable energy generation by 2012. The report from Vice President Joe Biden also says the United States will double its capacity to manufacture wind turbines, solar panels and other clean energy components in three years.
Recovery Act investments in renewable generation and advanced energy manufacturing of $23 billion are expected to create 253,000 jobs and leverage over $43 billion in additional investment that could support up to 469,000 more jobs, the report states. By the end of 2010, commitments will have been made to support more than 15 gigawatts of new wind, solar and geothermal and other renewable energy, or enough renewable energy to power at least 4 million homes per year.
At the same time, Recovery Act investments of up to $2.3 billion for advanced energy manufacturing facilities will likely generate 17,000 jobs. That’s an investment that will be matched by as much as $5.4 billion in private sector funding, which could support up to 41,000 additional jobs and up to two hundred advanced energy manufacturing projects, including solar, wind, and biomass.
In total, the nation is on a track to go from 27.8 GW of renewable energy existing at the beginning of this year to 55.6 GW or more by 2012; and from 6 GW of renewable manufacturing capacity to at least 12 GW in three years.
The importance of renewables in meeting growing demand for clean, efficient energy was also underscored by the Obama administration’s proposal earlier this month for another $5.4 billion in clean energy manufacturing tax credits. The proposal would build upon the $2.3 billion announced in August. Officials say the latest round of tax breaks could spark up to $15 billion in private investment into clean energy companies with major manufacturing components.
The tax credits target U.S. companies, not consumers. While the latter makes it less expensive for homeowners to buy, for example, residential solar panels, the bulk of those panels are currently manufactured by foreign companies. By aiming the latest round of tax credits at renewable energy component manufacturing in the United States, there is a greater potential for new jobs here.
The Recovery Act funding and tax credits are part of a larger plan to revive the U.S. economy. However, it is crucial for federal and state policy makers to remember that the momentum generated in 2009 with policies and incentives that accelerate renewable energy development must be sustained in 2010 to help provide the economic stability and national security offered by a clean energy future.
[On Thursday, the 25x’25 REsource will look both back and ahead at the sectors that make up much of the renewable energy industry.]
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