Renewable Energy Growth: Not just hot air, or opaque light!

The rapid growth of solar and wind power in recent years has brought hope in global efforts to reduce greenhouse gas emissions and limit the most dangerous effects of climate change.

In 2010, solar and wind combined made up only 1.7 percent of global electricity generation. By last year, it had climbed to 8.7 percent — far higher than what had previously been predicted by mainstream energy models.

For example, in 2012 the International Energy Agency expected that global solar energy generation would reach 550 terawatt-hours in 2030, but that number was exceeded by 2018. These models often assume that the growth of solar and wind will be linear, but the growth has been exponential.

Why is renewable growing so fast?

Falling costs have been the biggest factor in the explosion of renewable energy. Since 2010, the cost of solar photovoltaic electricity has fallen 85 percent, and the costs of both onshore and offshore wind electricity have been cut by about half.

Both renewable sources are cost-competitive with fossil fuel electricity.

Costs have fallen so dramatically due to positive feedback loops. The more that renewable energy technologies are deployed, the cheaper they become due to economies of scale and competitive supply chains, among other factors. These falling costs in turn spur more deployment.

For example, in the past decade, each time that the amount of solar capacity deployed worldwide has doubled, the price of installing solar capacity has declined by 34 percent. As renewable energy technologies are modular and standardized, cost improvements or technological advances made in one place can be quickly copied elsewhere.

Other aspects of renewable energy deployment are also self-reinforcing. As renewables grow in popularity, expand their political influence, and attract more finance, it becomes easier to leverage further policy support and finance.

As financiers become more familiar with the technical and project risks of renewable energy, the cost of capital has decreased. In addition, evidence suggests the spread of renewable energy is socially contagious — when one house installs rooftop solar, the neighbours who see it and talk about it are more likely to install rooftop solar themselves.

Policy support has also been essential for the growth of renewable energy. Renewable energy tax credits and subsidies, feed-in tariffs and competitive auctions have all helped reduce costs and spur deployment. And government investment in research and development has been essential in promoting innovation in renewable energy.

China, Europe, and the United States have become leaders in solar and wind through policy support, and worldwide, 165 countries have targets to increase renewable energy.

It is not just countries either; more than 600 cities worldwide have 100 percent renewable energy targets.

Timeline of renewable energy’s growth

Wind energy first took off in the early 2000s, while solar energy took off about a decade later, but has been growing even faster than wind.

Annual capacity additions of solar PV, wind and other renewables, main and accelerated cases, 2020-2026

?The factors driving the growth in renewable energy have been systemic, but certain key moments have reflected the larger trends or acted as turning points in renewable energy adoption.

Increasing customer and investor demand will continue to drive this growth and demand supported by policy and public expectation.