Published on March 6th, 2012 | by Zachary Shahan6
Top 5 U.S. States for Renewable Energy Investment
Last week, I posted on Ernst & Young’s latest Country Attractiveness Indices for renewable energy. It put the U.S. as the second-most attractive country for renewable energy investment, behind China and ahead of Germany (and every other country in the world, for that matter). Ernst & Young has also released renewable energy attractiveness indices for the U.S. and each state in the U.S.
The top 5 states in the U.S. when it comes to renewable energy attractiveness, in the long term, are:
- New Mexico
- Massachusetts & Texas (tie)
Meanwhile, the Midwest has the most clean energy capacity under construction, and several states in this region, especially Ohio and Michigan, saw tremendous growth.
Another key point from the report is that while the U.S. had a record year in wind and solar energy (which, together, account for 90% of the weight of a country’s score), some potential changes in policy at the national level provide these industries with quite the challenge.
Wind Energy in the U.S.
The wind energy industry, which saw 6.8 GW installed in 2011 (3.4 GW in Q4 alone) is nearing 50 GW of power capacity in the U.S., but its key incentive, the Production Tax Credit (PTC), may expire at the end of 2012 and failure to renew it is already costing the U.S. many jobs and many megawatts of clean energy. According to a report on the matter, the U.S. could lose 33,000 jobs by not extending the incentive this year. (The PTC provides $0.022 per kWh of wind energy produced over the course of 10 years.)
According to the American Wind Energy Association (AWEA), 400 wind industry facilities in 50 U.S. states provide Americans with 75,000 jobs. Over 50% of U.S. wind turbines are made up of domestic content.
Unfortunately, as Ernst & Young note, failure to extend the PTC in 2012 “has the potential to stop wind development in its tracks.” That has happened on three occasions — in 1999, 2001, and 2003, causing annual installed capacity to drop 93%, 73%, and 77%, respectively.
There is hope a 4-year extension of the PTC is in the works, but each day that is delayed, the U.S. wind industry is hurt (while the industry in other countries around the world is propelled forward).
Solar Energy in the U.S.
The Section 1603 program for solar energy expired at the end of 2011 and that will leave solar energy developments dependent on tax equity again, which hasn’t fully recovered from the recession yet. “Thus, demand for tax equity is likely to outstrip a vastly diminished supply, hampering development in coming years.” Projections are that tax equity supply may hit $3.2 billion in 2012, while demand is projected to be somewhere between $7 billion and $10 billion. However, on the plus side, grandfathering in of solar energy projects at the end of 2011 may account for a large portion or all of that difference, E&Y notes. The pressure is already building, though.
The report has much more info on these and other matters if you are interested. I’d recommend having a look.
All images via Ernst & Young.