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Executive Summary
Renewable
energy in the United States
is on the rise. America
now generates twice as much electricity from the wind and the sun as we did
just four years ago, and 2007 promises to be another year of record growth.
The
renewable energy boom is the result of a series of federal and state policies designed
to promote cleaner sources of electricity, as well as technological improvements
that have reduced the cost of renewable energy over the last three decades, rising
fossil fuel prices, and increased concern about global warming. Renewable electricity
standards (RES), which require increasing percentages of the electricity supplied
to consumers to come from renewable resources, have been among the most
important factors in encouraging the development of renewable energy.
Twenty-five
states and the District of Columbia
have adopted an RES. And while many of those policies are in their infancy, RES
states have already begun to reap the benefits in increased renewable energy
development, reduced pollution, cost savings and economic growth.
The
25 states that have adopted an RES are leading the nation in renewable energy
development.1
- Approximately
54 percent of the electricity consumed in the United
States is in states with RES policies.2 States with RES programs, however,
account for 75 percent of America’s
renewable energy generating capacity.3
- In
2006, more than two-thirds of all new renewable electric generating capacity in the United States was built in RES states. The same is likely to hold
true in
2007, with more than 70 percent of planned renewable generation capacity expected to be built in RES states.
(RES policies
also spur renewable energy development in nearby states, while some renewable energy built in RES
states is spurred by other public policies.)
- Renewable
energy will make up a larger proportion of new power generation in RES states
in 2007 than in states without RES policies. In 2007, renewable electricity
generators account for about 38 percent of planned capacity additions in
RES states, compared to just 12 percent in non-RES states.
- Of
the top 20 utilities with long-term contracts for wind power in the United States,
17 of them are covered in whole or in part by RES policies.
- While
many public policies have contributed to the growth of renewable energy, the
RES has played an important role. The U.S. Department of Energy estimates
that RES policies contributed to the construction of about half of the wind
energy added in the United
States between 2001 and 2006, with the
share increasing to 60 percent in 2006.
State
RES policies are reducing pollution and saving natural resources.
- Renewable
energy sources built after the adoption of state RES policies reduce America’s global warming emissions by approximately
8.4 million metric tons per year, the equivalent of taking more than 1.5
million cars off America’s
roads.
- Renewable
generators in RES states also produce fewer emissions of health threatening
pollutants that contribute to the formation of smog and soot than fossil
fuel generators. Renewable energy, therefore, can reduce the overall cost
of complying with federal limits on these pollutants and make it more
possible to set tighter limits that are more protective of human health in
the future.
- Renewable
generators in RES states also save vast amounts of water—approximately 1.2
billion gallons per year.
Renewable
energy development in RES states is boosting local economies.
- Over
the last two years, several of the world’s leading manufacturers of wind turbines and solar
panels have either built new manufacturing facilities or expanded existing
facilities in the United
States. RES policies play an
important role
in luring manufacturing facilities, as they represent a long-term commitment to build the
market for renewable energy technologies. Colorado,
Pennsylvania, Oregon, Texas, and Massachusetts are among the RES
states that have experienced increases in renewable energy manufacturing
activity in recent years.
- Renewable
energy development in RES states has had ripple effects that extend across
the nation. Increased demand for renewable energy creates increased demand
for raw materials, construction, accounting, engineering and a wide
variety of services. While the benefits of renewable energy are strongest
in local economies near manufacturing facilities and renewable energy
installations, every state in the nation has at least one business that
participates in the renewable energy economy and benefits from its growth.
- Renewable
energy has had particular benefits for rural economies. Texas
landowners, for example, now receive an estimated $9.5 million in royalty
payments from wind farm operators, while one town in rural Colorado saw its
tax base increase by 29 percent as a result of a wind farm development
there.
State
RES policies also have the potential to save electricity consumers money.
- A
2007 analysis by the energy research firm, Wood MacKenzie estimated that adoption
of a 15 percent federal renewable electricity standard would save more
than $100 billion in electricity costs by 2026, largely by driving down the
cost of natural gas.
- In
many states, such as Colorado and Washington, wind farms have proven to be
the least-cost source of electricity, especially when all the likely
future costs of fossil fuel-fired power plants are included (such as the
risk of energy price spikes and the future cost of carbon dioxide
emissions).
- Solar
power, while currently more expensive than other forms of power generation,
can play an important role in reducing demand for power at peak periods,
when it is most expensive.
- Renewable
energy development reduces upward pressure on natural gas prices. A 2005
study by researchers at the Lawrence Berkeley National Laboratory estimated
that the 18 state RES policies then in effect would produce savings of
approximately $10 billion in lower natural gas bills as a result of
reduced demand for natural gas.
Adoption
of a national RES would increase the benefits of renewable energy to the
environment and the economy.
- The
United States should
adopt a renewable electricity standard that calls for 25 percent of America’s
electricity to come from new renewable sources by 2025.
- States
that have not yet adopted RES policies should consider doing so, while those
that have adopted RES policies should consider strengthening them by
increasing the required percentage of renewable energy, excluding
nonrenewable or polluting energy sources, and refining their policies to
ensure that renewable energy targets are met.
- The
state and federal governments should also adopt complementary policies to
hasten the deployment of renewable energy along with policies to improve
the energy efficiency of the American economy.
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