U.S. Clean Energy Market Hits $200 Billion, Global Market $1.35 Trillion, Thanks to Smart Gov't Policies
Especially as it relates to the clean energy sector, there's still a debate among politicians about whether we should use public policies and programs to drive business growth and innovation. (Witness this bit of nonsense in Congress last week about the fact that the U.S. Department of Energy's loan guarantee program has a failure rate of 2.7 percent. That means 2.7 percent of their loans to innovative energy companies go belly up. The failure rate of venture-capital-supported businesses is about 30 percent, and for energy-sector corporate businesses that number is almost five percent. By those metrics, really, the DOE Loan Program seems prescient.)
Anyway, the question some politicians still have is whether smart policies can unleash the market forces that can drive clean energy revenue increases as well as the good jobs, cleaner air, lower energy costs, and the vital hedge we need against climate change's worst effects. The answer is a resounding yes, according to the new Advanced Energy Now 2016 Market Report, released on Thursday. Not only can smart public policies do all these things, the report shows, they can do so at a rate that's almost astonishing.
Consider this good news: Conservatively speaking, global clean energy revenue last year topped $1.35 trillion. That's right: trillion with a "t." (Conservatively, the authors say, because there are product categories and industry subsegments they didn't include because they didn't study them directly.)
If a $1.35 trillion annual market in clean energy seems too big a figure to wrap your head around, just know we're talking here about a lot of money. So much so that it's almost twice global airline revenue, and bigger than the world fashion industry in all its permutations. In fact, $1.35 trillion is closing in on the amount earned by the global media industry--everything from newspapers and video games to TV shows and movies. Think about that: Star Wars and a whole lot more. (The report explores not just the wind and solar power industries but also revenue from industries such as demand response, efficient appliances and machinery, energy management software, and electric vehicle charging--all good things for our climate and our public health.)
In the U.S., clean energy revenues last year were $200 billion. That's no small beer. In fact, that's twice the revenue of the domestic beer industry and almost the same size as wholesale consumer electronics.
In the data Advanced Energy Now reported out, the impact of policy is everywhere to be seen. Spurred by state energy efficiency standards and public utility commission mandates, for instance, the largest U.S. clean energy sector--building-industry energy efficiency--reached $63.6 billion, an increase of 50 percent over 2011. (Those standards save consumers a lot of cash, too, with mandated energy efficiency projects saving between $1.24 and $4.00 for every dollar invested.)
Solar industry revenue, buttressed by the hugely successful federal Solar Investment Tax Credit, along with state renewable energy standards and incentives, brought in an impressive $22.6 billion last year, up 21 percent over 2014 and nearly triple solar revenue in 2011. All these sales have helped drive down the cost of the average solar system by almost 50 percent over that time. (Solar jobs have skyrocketed also, thanks to these policy initiatives, reaching almost 209,000 in 2015.)
Proof that clean energy policy matters is fully in evidence in the wind power industry, Advanced Energy Now demonstrates. Briefly reinstating the expired federal Production Tax Credit for Wind Power in 2014 helped the industry to earn $14.4 billion (with 73,000 jobs) in 2015, up 75 percent from the previous year. State and regional policies promoting energy storage pushed that industry to grow by a massive 1200 percent over in 2015, to $743 million. And electric vehicle sales grew to almost $5 billion, despite historically low gas prices.
Advanced Energy Now is really just one of many reports that show how smart clean energy policies promote economic growth and business innovation across the United States. Really, by now, if you claim to love growth and business development, you should at least admit to liking clean energy policy.