Renewable energy has been increasing incredibly. Wind power and solar power share of the total U.S power generation has increased from 0.5% in 2005 to 5% in 2015. This growth shows both the innovation that has been lowering the costs and different subsidies which include accelerated depreciation, tax credits and grants, loan guarantees, and state renewable power mandates.
Renewable Energy Subsidies (Source: Inhabitat)
Renewable energy’s value is usually lower because investments do not always target the highest quality resource—solar power goes to where subsidies are, not where the sun shines.
Innovation has brought lower costs for wind, solar and their competitors. This has lowered the cost of U.S natural gas, wherein the price of natural gas delivered to the power sector in 2015 is equal to one-third of the price than it was in 2008.
Renewable Energy Subsidies (Source: LBL)
As the cost of power production has fallen, it is the same for the demand for electricity. Electricity consumption in the U.S. has fallen by 1 percent because of subsidies and standards targeting energy efficiency. In other parts of the U.S., the costs of wind and solar may be competitive with new coal or natural gas facilities, but new renewable investment competes with existing, lower-cost power plants.
These findings result in utilities relying more on the use of natural gas than renewables. This is due to the fact that natural gas is still more efficient in following the changes in energy demand.
