Last week in President Obama’s inaugural speech he addressed the most serious threat our planet has ever faced, climate change, when he said, “We, the people, still believe that our obligations as Americans are not just to ourselves, but to all posterity. We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations. Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries – we must claim its promise. That’s how we will maintain our economic vitality and our national treasure – our forests and waterways; our croplands and snowcapped peaks. That is how we will preserve our planet, commanded to our care by God. That’s what will lend meaning to the creed our fathers once declared.”
It is exciting and hopeful to hear our nation’s leader pledge to put us on the path to conquer global warming and combine it with the economic recovery the US so badly needs. Now we need to back up these words with some actions. What can we do to lead a green industrial revolution?
Well we’re already seeing some promising actions from the U.S. Department of Defense (DOD). Did you know the DOD is the largest single consumer of energy in the world? The agency spends approximately $20 billion on 3.8 billion kilowatt hours of electricity and 120 million barrels of oil per year. That’s a lot of energy, and sometimes fossil fuels are bought from countries hostile to U.S. interests. So the U.S. military is turning its eyes to renewable energy. Fortunately they are not starting from scratch; they currently have about 80 megawatts of installed renewable energy capacity. However, the good news is that a report released this week by Pike Research forecasts this number to quadruple to 3,200 megawatts by 2025. The research firm quantifies the increase in renewable energy use to a predicted almost $1.8 billion in 2025 of U.S. military spending on renewable energy programs, including conservation measures.
All of this green spending can have lasting positive effects on the industry overall. For example, as the demand for solar cells increases, it encourages the building of more solar cell manufacturing plants. Due to economies of scale, the cost of producing solar cells can decrease, and the new lower costs are passed on to the private sector. Additionally, the solar industry, because of large sales from the U.S. military, has more funds available to conduct research and development into better and cheaper solar cells, which can drive down the price permanently.
It is encouraging to hear and see the U.S. take steps towards leading a green industrial revolution. Is there more that can be done? Absolutely! But we have to recognize these constructive efforts as they are brought to light.
According to data recently uncovered from the Energy Information Agency, electricity coming from non-hydroelectric renewable sources (solar, wind, geothermal, and biomass) has doubled in the U.S. to almost 6 percent in a scant four years’ time.
It’s a bit surprising that this significant fact hasn’t been splashed all over the news. Businesses are portrayed as not believing clean energy is worth the investment, but that is simply not true for all. Some companies see the wisdom and fiscal prudence in planning for climate change. The press appears to focus more on manufacturing problems in the sector.
While it is true that the green manufacturing industry is experiencing some growing pains, take solar panel makers for example, it’s worth noting that the green industry is growing overall, and quickly too. China made enormous investments in solar, and they are the face of rising competition. They’ve brought down the price of panels by 65 percent in a mere 18 months. So this leads to fewer and bigger solar manufacturers, which is what happens in all mature industries. However, the explosion of growth in the solar industry comes from the businesses that sell, install, and maintain solar.
Perhaps renewable energy seems like small potatoes since it’s only a fraction of total electricity generation. But the magic is in the industry’s potential for exponential growth. If non-hydro renewables were to double three more times, they would provide nearly half of US electricity needs. That’s more than we get from coal or natural gas right now.
The renewable energy industry’s growth is not just limited to the U.S. either. Countries such as Portugal and Germany have transformed their power grids to generate 25 – 45 percent of their electricity needs from renewable sources.
The big question is if non-hydroelectric renewables can continue to double every four years? Well let’s start by taking a look at what kind of growth would be required to do so. Non-hydro renewables need 19 percent annual growth in order to double every four years. Some sectors grow that much or more. According to the Solar Energy Industries Association, the solar sector is growing 30 percent annually.
The bottom line is that the payback time for investing in renewable energy is getting faster every day. Wise homeowners, businesses, and governments are ahead of the curve because they see that the future is in renewable sources.