2012 was a significant year for the green sector. And while the spectre of Solyndra from the previous year still cast shadows on the industry, all in all, the industry experienced solid growth across the board. In many ways, 2012 is but a snapshot of an industry hitting its stride. The sector as a whole is expected to outpace the growth of the fastest growing fossil fuel, natural gas, by a factor of 4 to 1 through to 2030.
Below we list 10 key Green Milestones and events of the past year concerning the renewable industry.
1,000,000 Homes Weatherized
Back in September of 2012, the U.S. Department of Energy (DOE) marked an unheralded and uncelebrated milestone that was largely ignored by green advocates and critics alike. The Weatherization Assistance Program (WAP), which benefited heavily from the stimulus, has upgraded more than 1 million American homes resulting in about $400 in annual savings per household, and has stimulated domestic economies.
The program has been, in nearly every respect, an example of a well-managed, well-executed, government initiative that has led to a win-win-win situation. Tens of thousands of jobs were created, more than 1 million low-income Americans saw greatly reduced energy bills, and carbon emissions were reduced. While solar panels and other green-tech superstars typically garner the most attention, the WAP shows that even today, the most cost-effective green measures often involve low-tech insulation, caulking, and ductwork improvements. The DOE estimates that nearly 38 million homes qualify for WAP, which means that there is still much work yet to do.
Fuel Efficiency Set at 54.5 Miles Per Gallon
Many Americans are still reeling from the Great Recession, the worst economic slump since the Great Depression. Some economists claim that the recent recession is just a harbinger of leaner times to come. In fact, studies indicate that the current generation of young Americans, now entering the workforce, will be the first generation of Americans that may do less well materially than their parents. In response to tighter pocketbooks, Americans are finally slimming down. We’re getting leaner and tougher, especially when it comes to energy efficiency. Any money not spent on air conditioning costs or gasoline is money we can save for our children’s college tuition, or for our retirement years.
It’s no surprise then, that some of the first things Americans chucked during the recession were our big, gas guzzling cars. In 2004, American spent about 5 percent of their income on fuel. In 2012, Americans spent nearly 10 percent on gasoline. Consumers today spent on average 342 dollars per month just to get from one point to another. To alleviate the pain at the pump, the government finalized groundbreaking standards that will require new cars to meet a stringent gas efficiency standard of 35.5 miles per gallon by 2016, and 54.5 miles per gallon by 2025. The program is expected to reap 1.6 trillion dollars in savings, comparable to lowering the price of gasoline by 1 dollar by 2025, and will reduce American consumption by 12 billion barrels. Becoming energy independent doesn’t just mean ramping up energy production, it also means improving efficiency, streamlining designs, and conserving wherever, and whenever, we can.
America Doubles the Amount of Electricity Generated from Renewables
Meanwhile, as America’s homes and cars become increasingly efficient, the nation’s renewable sector continues to experience explosive growth. Between 2008 and 2012, America doubled the amount of electricity produced from solar, wind, and geothermal sources.
Wind Power Reaches 50 Gigawatt Milestone
In the fall of 2012, America’s wind industry breezed right past a major renewable energy milestone – 50 gigawatts of production capacity purely from clean, affordable wind-energy. That’s enough capacity to power 12.8 million homes. Or replace 44 coal-fired power plants. Or 11 nuclear plants. It’s clean power that conserves 30 billion gallons of precious water, and avoids emitting as much carbon dioxide as 14 million cars.
Wind capacity has doubled in a mere four years, and grown fivefold since 2006, driving growth in otherwise moribund economies. In October, wind energy accounted for nearly 85 percent of the load in the region. General Electric celebrated the installation of its 20,000th wind turbine in November. Wind’s blustering triumph underscores the fact that, for the most part, 2012 was a great year to be green.
Solar Reaches Grid Parity in Parts of the U.S.
Parallelling the success of the wind energy sector, the solar industry also continued to shine. A consistentstream of good news throughout the year continues to buoy optimism about the direction of the nation’s solar. By the end of 2012, nearly 3.2 gigawatts will have been installed, much of in states where solar grid-parity, the purported holy grail of the solar sector, has been reached. There are now 200 utility territories in 20 stateswith solar grid-parity.
Meanwhile, sunny states such as California, Hawaii, and parts of Texas are doing even better than grid parity. As technology continues to improve at a rapid pace, solar’s star continues to shine brightly into the coming year.
However, the industry’s success has also been driven in part by steep declines in the price of solar panels, that has led to a “solar shakeout” that has led to turmoil for domestic PV manufacturers.
Solar Prices Hit Rock Bottom
Solar panel prices have dropped 80 percent in the last 5 years. That’s quite a precipitous decline that isexpected to continue. While a boon for eco-conscious consumers, solar installers, advocates, and other segments of the solar industry, panel manufacturers have had to learn to get competitive.
U.S. Solar Panel Price War
Much of the precipitous fall in prices has been the result of a glut of overproduction from photovoltaic cell manufacturers in China. The result has been an old-fashioned price war that is casting shadows on an otherwise flourishing solar sector. U.S. manufacturers have accused China of unfair dumping practices that is driving solar panel prices to extreme lows and putting American firms out of business. Reports indicate that the oversupply is so bad, that as much half of China’s solar firms have ceased production, mirroring a similar “solar shakeout” occurring in the States.
But while domestic manufacturers have suffered, with many going bankrupt, consumers have benefited heavily from historically low prices. Economists point out that current developments in the solar industry mirror the red-hot growth of personal computing in the 90’s. Many computer makers went bust or exited the industry in ignominy thanks to stiff competition and fluctuating market advantages. But in the end, the industry emerged as one of America’s strongest industries, and a driver of American growth and innovation.
Coal Overtaken By Natural Gas
The solar panel manufacturing industry isn’t the only industry experiencing a “shakeout”. Recently, coal wasovertaken by natural gas. King coal is king no longer. As natural gas and renewables continue to eat up coal’s market share, the bituminous rock is increasingly facing a bleak future. Reactionists often blame government for the industry’s decline, which is simply not the case. The truth is, market conditions have spoken. Adam Smith would have been proud.
While the tradewars and spats over energy policy dominate the political sphere, a quiet revolution has been gradually taking place across the nation. Nearly one-quarter of American homes have been fitted with this cost-saving energy management device – more than 36 million homes.
Yet, despite the movement’s many benefits, it has experienced staunch opposition from a small vocal minority who prefer their meters dumb. While opposition to smart meters voice valid concerns regarding security, all in all, the discussion needs to get a whole lot smarter in the years to come.
Hurricane Sandy Reveals Weakness in U.S. Grid Infrastructure
One of the most dramatic events of 2012 was Hurricane Sandy’s all-out assault on America’s Eastern Seaboard. After the wind and waves finally subsided, it became painfully clear that the nation’s infrastructure was in bad shape – before Sandy had ever touched the coast. For the most part, the nation’s infrastructure, a key pillar of economic strength, has suffered decades of neglect. Sandy merely highlighted the fact that for a nation that is often referred to as a “premier, world superpower,” we rank 23rd in infrastructure. Not good.
And it’s not just our roads and bridges. As 6.2 million Americans who were left without the lifeblood of modern society, electricity, learned: our energy infrastructure is in bad shape as well.
But Sandy did more than knock down telephones poles and flood streets. It also shattered a silence that had slowly enveloped the discussion of global warming. Sandy, very much of a child of rising water temperatures combined with rising sea levels and an extended hurricane season, is in every way the “frankenstorm” coined by New Yorkers. It was created by human activities, and resulted in terrible consequences.
But Hurricane Sandy wasn’t the first, and certainly won’t be the last. Prior to 2012, 2011 was considered theworst hurricane season. 2013 is expected to continue the trend. When you’re having 100-year storms every other year, something is decidedly wrong. Opponents of renewable energy often frame policies designed to stemmie global warming purely in terms of short-term economics, which is both dangerous and incredibly foolish. Sandy will cost America nearly 80 billion dollars. If there’s one thing America can’t afford in the years to come, it is more Hurricane Sandys.
As America moves into a near year with new triumphs and challenges, the renewable industry is expected to continue to grow at a brisk clip. Indeed, forecasts for the green economy look sunny, but a few clouds loom on the horizon – the expiration of production tax credits, which will expire unless congress can get its act together. The current state of the renewable industry is a mix of immense opportunities and challenges. Immense progress has been made, but there is much work yet to do.
Meanwhile, the climate change clock continues to tick away, promising a future of harsher droughts and harder-hitting storms. For America in 2013, the question will not be about the place of renewables in energy policy – they will be key driving factors. Rather, the question will be whether Congress and the American people will have the foresight and agility to capitalize on America’s thin lead in clean-energy innovation. Will we be able to position ourselves as leaders? Or will we be reduced to mere consumers of Chinese and European innovations?
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