Clean Energy Can Withstand Political Changes

renewable energy

Article originally posted at Morgan Stanley

When President Obama first took office in 2008, it was hard to imagine how solar and wind would ever stand on their own as viable alternative sources of energy. Today, solar and wind are so price-competitive that players in the renewables industry were among the few that could afford to be cavalier about who won the U.S. election.

“The increasingly favorable economics of renewables are more important than the presidential election’s impact on the industry, in our view,” says Stephen Byrd, a senior analyst with Morgan Stanley. “Wind and solar are price-competitive in many parts of the U.S. It’s the economics and not the politics that’s driving the use of renewables.”

Over the past seven years, the cost of wind power has dropped from $60-$100 per megawatt-hour (MWh) to around $15-$25/MWh in the middle third of the U.S., and for large solar installations, it’s gone from $100-$300 to $40-$70 per MWh. Wind power is currently the cheapest source of energy in the middle third of the country, with its all-in cost of $15-$25/MWh, comparing with the $55-$65/MWh for a new natural-gas-fired plant.

Driving their growing competitiveness are improvements in wind and solar technology, as well as some technical efficiency gains. Product Tax Credits, passed by Congress in 2015, will now provide the next bridge to…

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