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U.S. Becomes Second Most Attractive Renewables Market

Solar panel

The United States has moved ahead in EY’s Renewable Energy Country Attractiveness Index and is now second only to China, the UK consultancy said in the latest edition of its RECAI. Last year, the U.S. was third from the top because of President Donald Trump’s fossil fuel industry revival efforts.

Now, it seems these will not have any substantial impact on renewable energy even when taking into account the import tariffs on PV cells and modules introduced earlier this year. According to EY, these tariffs have already been absorbed by the market.

That’s contrary to the opinions voiced by the solar industry in the United States when the tariffs were first proposed and then imposed, with many industry representatives arguing that the tariffs would harm local solar power producers rather than the Chinese cell and module manufacturers the tariffs targeted.

What’s more, the Republican tax reform bill approved at the end of last year did not envisage subsidy cuts for wind power installation, which should provide additional boost to this industry.

In fact, the U.S. tariffs, combined with a global trend towards renewable energy subsidy reductions, have spurred a cost-cutting rush in the solar industry, along with an innovation drive that is already paying off, RECAI’s editor and EY’s Global Power and Utilities Corporate Finance Leader Ben Warren wrote in the report.

He cited Bloomberg New Energy Finance’s calculation that as of January this year, the benchmark levelized cost of electricity from renewable power was down by 18 percent globally for both PV and wind installations to US$55/MWh for PV and US$70/MWh for wind power.

These positive cost developments, despite the combined headwinds of tariffs, subsidy cuts, and higher interest rates, EY notes, have also prompted Big Oil to start investing more in alternatives to their core business through acquisitions, as well as organically by raising investments in wind, solar, and energy storage projects.

By Irina Slav for Oilprice.com

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  • Steve on May 01 2018 said:
    Intermittent sources of electricity like solar and wind have hidden costs of running backup gas turbines inefficiently, burning fuel when idling backup, more transmission lines, and much higher subsidy rates on a cost per kWh basis. These nondispatchable sources of energy are doing nothing but driving up residential utility rates in countries such as Germany, Spain, and Denmark. In the US, California likes to brag about all the wind/ solar they have installed but fail to mention they have the highest residential costs per KWH (over 50 percent higher) than most western states. Only the intermittent ( I don't call them renewables because they really aren't) energy pushers like to pedal these so called lower LCOE rates without considering the true cost that are borne by conventional backup and reliable power sources.
  • John Brown on May 01 2018 said:
    President Trump is a genius. His energy plans have resulted in a Gold/Oil Rush among U.S. producers of oil and gas, the additional clean burning gas has resulted in the USA lowering Greenhouse gas emissions more than any other country in the world despite pulling out of that corrupt Paris accord boondoggle, and now we find that renewable energy is also benefiting from the Trump Presidency, with cost going lower making them more and more competitive with oil and gas. Trump isn't anti-Environment, his policies are working far better for the future of the planet and environment than all the stupid taxes and Government insanity Obama did in 8 years of utter misery. The economy is growing, jobs are being created, incomes are rising for working American, Black and Latino American have the lowest UNEMPLOYMENT on record, the U.S. is outstripping all other countries in emitting less greenhouse gases, and the USA is far more safe and secure. Meanwhile renewable energy is lowering its cost and able to gain more market share. We might also keep in mind that the last 2 years have seen a drop in Global Temperatures, not an increase. The Trump Presidency with Republicans controlling Congress is paying off big folks. This is another great story of success.

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