The American Council on Renewable Energy has this week announced the launch of a new campaign that aims to spur $1 trillion in new US private sector investment by 2030 for the renewable energy sector and enabling grid technologies.
The move was announced on Tuesday by the American Council on Renewable Energy (ACORE), a US business group made up of companies that finance, develop, manufacture, and use all forms of renewable energy. Its aim is to accelerate the investment and deployment of renewable power in the United States. The campaign — $1T 2030 — will be managed by the Partnership for Renewable Energy Finance (PREF), a senior-level ACORE member program that is one of the country’s most important educational renewable energy finance resources.
“Renewable energy has come a long way and is economically competitive, but if we accept business-as-usual projections that predict a decline in annual investment and deployment levels in just a few years due to an uneven policy playing field, we will cede US leadership and the immense range of economic benefits that come from being a dominant player in this booming global industry,” said ACORE President and CEO Gregory Wetstone. “With the $1T 2030 campaign, the investment community is charting a course to modernize America’s energy infrastructure that will create massive economic opportunities over the next decade and beyond.”
ACORE’s plan to spur $1 trillion in renewables investment is based around a set of “common sense policy reforms and distinct market drivers.” ACORE’s four specific policy reforms are:
- A long-term federal policy commitment providing support for carbon-free electricity generation, presumably as part of an effort to address the externalities associated with greenhouse emissions, after the wind and solar tax credits phase out in the early 2020s.
- Federal, state and regional policies to promote modernization of the nation’s electrical grid, including rules that allow renewables to compete fairly in electricity markets, and new incentives for energy storage and other enabling grid technologies.
- Continued expansion of state renewable portfolio standards to support increasing deployment of renewable electricity.
- Reforms to facilitate siting and permitting processes for renewables and transmission and allow for accelerated renewable energy growth.
- A scale up of the energy storage market, via new business models, improving economics and technology innovation, that will enhance integration of renewables as its makeup of America’s power generation portfolio achieves new levels.
- Increased corporate renewable purchasing by diversifying procurement options and developing market incentives for middle market and industrial companies, expanding renewable energy use throughout the C&I sector.
- High-levels of public awareness and support for renewable energy and electric vehicles as an actionable solution to combat climate change, leading to increased deployment of rooftop solar, purchase of electric vehicles and demand for renewable energy from electricity suppliers.
- Continued financial innovation as capital stacks evolve to replace tax equity as a key source of project financing, and as the industry seeks a more standardized approach to finance new project offerings, such as renewables plus storage systems.
Importantly, the $1T 2030 campaign hinges upon the findings of a new survey report that was published by ACORE, The Future of U.S. Renewable Energy Investment: A Survey of Leading Financial Institutions. The report is based on survey data from senior-level respondents across the nation’s leading banking institutions, asset managers, private equity firms, and other financial firms, and identifies several key findings that point to the fact that, “with sustained demand, US renewable energy will continue to be an attractive asset class with strong potential for investment growth.”
Specifically, survey respondents believe that over the next three years investor confidence in the US renewable energy sector is expected to remain high with an average confidence level of 84%. Other highlights from the report include:
- Two-thirds of respondents said they plan to increase their investments in US renewables by more than 5% in 2018 compared with 2017, and half plan to increase their investments by more than 10%.
- 89% of respondents who chose to project their companies’ investments in US renewable energy between 2018 and 2030 said they would double their planned investments in US renewables under a supportive policy and market scenario compared with a business-as-usual base case.
- More than half (58%) of respondents said the lack of a federal policy driver for renewable energy after the sunsets of the production tax credit (PTC) and investment tax credit (ITC) is a hurdle for continued growth at current levels.
- Expanded state renewable portfolio standards were identified as key growth policies, with 45% of respondents indicating they are “very important” and 50% indicating they are “important.”
- 88% of the respondents identified energy storage to be a leading magnet for investment within the next three years. This investment should, in turn, stimulate renewable energy development, with three-quarters of respondents reporting energy storage scale-up to be an important market driver for renewables growth to 2030.