With a Slow- Growth Market, Renewable Developers Face Investment Challenges
In the last decade, renewable power has undergone intense growth where shares of wind and solar in the total U.S. power generation has boosted about five percent last year compared to less than 0.5 percent noted in 2005.
Innovation, cost cutting with a range of subsidies are also factors that helped renewable energy reach new heights. The state renewable power mandates also create helpful credits with almost 50 cents per kilowatt hour in Massachusetts and New Jersey for solar power. That also complements the revenue flow that comes from power sales.
As innovations brought down costs for wind and solar, the fracking revolution also significantly lowered costs of natural gas in the United States. The price of natural gas that was delivered in 2015 to the power sector was one-third of the price that was noted in 2008.
No doubt the production cost for power generation has dropped and so has the electricity demand in the country. U.S. economy has grown almost eleven percent since 2010 and electricity consumption dropped one percent in part due to standards set by the government and subsidies which are aimed at energy efficiency.
When the growth in the power demand drops the requirement for investment for utilities also falls. In the low-priced competition and no significant growth market, the developers of renewable energy face strong investment challenges.
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