Renewable Energy Can Lead to Economic Boom, Report Finds

If we implement the right policies and frameworks, we can achieve large-scale deployment of renewable energy that creates jobs, increases incomes, improves trade balances and contributes to industrial development, according to a new report by the Clean Energy Ministerial's Multilateral Solar and Wind Working Group.

The report, econValue - The Socio-economic Benefits of Solar and Wind Energy, analyzes the circumstances under which renewable energy can boost economies and benefit communities by studying the effects of solar and wind energy on the environment, economy and society. Produced by the International Renewable Energy Agency (IRENA), the report provides a framework to help policymakers analyze the various economic opportunities that may be offered by solar and wind sector development and the potential of various policy instruments to best realize those opportunities.

The report focuses on key macroeconomic variables for assessing economic impact—including value added, gross domestic product, welfare and employment—and looks at opportunities at each stage of the renewable energy life cycle, from project planning and manufacturing to maintenance and decommissioning.

The report also analyzes policies that stimulate the deployment of renewables, as well as those policies that help build a domestic industry by encouraging investment and technology transfer; strengthening firm-level capabilities; and promoting education, training, research and innovation. Case studies are used to support key recommendations for policy options to maximize value creation. Finally, the report provides guidance on the selection of tools that can be used to assess socio-economic impacts of renewable energy deployment.

A March report showed that 2013 was a record-setting year for solar energy in the U.S., with 4,751 megawatts (MW) of new photovoltaic (PV) capacity installed – a year-over-year increase of 41 percent -- with another 410 MW of concentrating solar power (CSP) coming online. A record 2,106 MW of solar power capacity was installed in the fourth quarter alone, amounting to 44 percent of the annual total -- exceeding the old quarterly record by 60 percent.

While we should continue to invest in renewable energy, we also should be pursuing the cheapest kind of energy -- that which we don’t need to produce in the first place. Energy efficiency programs aimed at reducing energy waste cost utilities only about 3 cents per kilowatt hour, while generating the same amount of electricity from sources such as fossil fuels can cost two to three times more, according to a recent report by the American Council for an Energy-Efficient Economy (ACEEE).

This supports a May 2013 Ceres report which claims that, while energy efficiency could be a several hundred billion dollar investment opportunity in the United States, better policies are required to unlock broad-based financing from institutional investors.

Based in San Francisco, Mike Hower is a writer, thinker and strategic communicator that revels in driving the conversation at the intersection of sustainability, social entrepreneurship, tech, politics and law. He has cultivated diverse experience working for the United States Congress in Washington, D.C., helping Silicon Valley startups with strategic communications and teaching in South America. Connect with him on LinkedIn or follow him on Twitter (@mikehower)