CHALLENGESANDOPPORTUNITIESINTHEUSRENEWABLEENERGYSECTORAgreatdeal.Better.CHALLENGESANDOPPORTUNITIESINTHEUSRENEWABLEENERGYSECTOR2TABLEOFCONTENTSIntroduction1:Capacity2:SectoralShifts3:Policylandscape4:MergersandacquisitionsConclusions461014182041.“TheUnitedStatesPowerMarket:Outlookto2035,”GlobalDatareport,January2024.INTRODUCTIONTheenergytransitionisadvancingacrosstheglobe;theUSisoneofitsstandardbearers.Thisreportexaminesthetechnological,regulatoryandcommercialforcesthataredrivingtheworld’slargesteconomytowardsagreenerfuture.In2010,5%ofpowerintheUSAgridcamefromrenewablesources–definedasthetotalofphotovoltaicsolar,thermalsolar,wind,geothermal,smallhydroandbiopower.In2035,thisfigurewillhit50%.1Whileasmallnumberofbighitterswillbattleitouttospearheadtheenergytransitioninthecomingdecades–alongsidetheUS,China,Germany,IndiaandAustraliaareexpectedtoaccountfornearlythree-quartersofallrenewablecapacityaddedbetween2022and2035–thereislittledoubttheUSwillplayaleadingrole.Aconfluenceoftechnological,regulatoryandcommercialforcesmeansthat,evenamidgeopoliticalandeconomicinstability,America’srenewableenergymarketremainsoneoftheworld’smostvibrant.ThisreportputsthetrendsdominatingUSrenewablesunderamicroscope.Itbeginsbyexaminingoverallcapacity,drawingonthelatestresearchtomapthechangingtrajectoryofAmericanenergy.Itthenlooksattherapidevolutionofthosesectorsmostresponsivetotheriseofrenewables,includinghydrogenenergy,electricvehiclesandbatterystorage.Anassessmentofthepoliticalenvironmentfollows,evaluatingsupportstructuresthathavebeenputinplacefortheenergytransition–andtheirdurability.Finally,analysisofmergersandacquisitions(M&A)activityshedslightonhowthecommercialworldisrespondingtothesetrends.Altogether,itpaintsapictureofadynamicsector–butalsoonefacingitsfairshareofchallenges.ThereislittledoubtthatrenewableswillgrowinAmerica.Butwhetheritbecomesagreensuperpower,orisforcedtosettleforthestatusofrenewablealso-ran,willdependonhowfaritcanexploittheopportunitiesaheadandsuccessfullynavigatethepitfalls.CHALLENGESANDOPPORTUNITIESINTHEUSRENEWABLEENERGYSECTORCHALLENGESANDOPPORTUNITIESINTHEUSRENEWABLEENERGYSECTOR5CHALLENGESANDOPPORTUNITIESINTHEUSRENEWABLEENERGYSECTOR6TherenewableenergymarketinNorthAmericaisundergoingconstanttransformation.TheUSAisthetrailblazer;capacityhasexpandedrapidlythankstoarangeoffederalandstate-levelinitiativescreatingafertileenvironmentforgrowth.Theseinitiativescontinuetospurexpansionandmoreareontheway–butsotooaresomepotentialstumblingblocks.TheUSgovernment’scommitmenttorenewableenergyisreflectedinseveralkeypoliciesandregulatorymeasures.TheEnergyPolicyActof2005-specificallySection203-mandatesthatthefederalgovernmentconsumeatleast7.5%ofitstotalelectricityfromrenewablesources.IncentiveprogramssuchastheProductionTaxCredit(PTC)andInvestmentTaxCredit(ITC)havebeenpivotalindrivinginvestmentinwindandsolarpower.Atthestatelevel,RenewablePortfolioStandards(RPS)requireutilitiestosourceacertainpercentageoftheirpowerfromrenewablesources.MoststatesnowhaveRPSonthestatutebooks,andthestandardsaresupplementedbyRenewableEnergyCertificates(RECs),allowingutilitiestotradecreditstomeettheirRPSobligations.1:CAPACITYThethirdsectionofthisreportexaminesUSpolicyindepth,includingadditionalinitiatives–notablytheInflationReductionAct(IRA)–thathaveoverhauledtheenergylandscapeatbothstateandfederallevels...