Renewable energy sources gain attention as fossil fuels continue to decrease and fluctuate in price. Alternative sources of power generation can ensure energy security by reducing North America's dependency on foreign oil. Moreover, there are increasing environmental concerns about air pollution and electricity consumption. Federal and state incentives, subsidies, and standards for the use of renewable energy can help the renewable energy market by increasing the installed capacity of renewable energy, according to a report from Frost & Sullivan.
The following are findings from the analysis:
- The solar energy market expects to grow at a compound annual growth rate (CAGR) of 39.9 percent from 2009 to 2015.
- Wind energy installed capacity projects an increase at a CAGR of 31.6 percent during the forecast period.
- Production tax credit (PTC) has leveled the economic playing field for wind projects in the energy market.
- In several parts of the U.S., the PTC has lowered the electricity price generated by wind power plants to less than 5 cents/kWh, making wind energy competitive with new coal or gas-fired power plants.
- Investment tax credit (ITC), the removal of the $2,000 cap, and an eight-year extension of the 30 percent federal solar tax credit for homeowners promotes solar power projects and expects to reduce the costs of photovoltaic (PV) modules.
- The major challenge to the expanded adoption of clean energies is the high capital costs. In general, renewable energy technologies are extremely capital intensive.
"Most renewable energy technologies are in their infancy and must compete in terms of cost and market share with other well-established sources of energy generation," said Frost & Sullivan Research Analyst Georgina Benedetti. "Therefore, North American and other global governments are encouraging alternative energy deployment and development."
"Technological improvements, such as higher energy efficiency, greater reliability of renewable energy technologies, low-cost materials, and improved methods to store energy, can be addressed by stimulating technological research in private and government laboratories," concludes Benedetti. "In fact, R&D in renewable energy has been receiving increasing attention from various governments."