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FIGURE 2.5 U.S. annual installations of renewable capacity, 2007–12 18 16 14 12 10 8 6 4 2 0 2007 2008 2009 2010 Source: Bloomberg New EnergyFinance database. Geothermal Biomass & waste Solar Wind Capacity (GW) Factors Affecting Supply and Demand for Renewable Energy Policies Supporting Renewable Energy Government policy has played a key role in the global development of renewable energy. Growing concerns about energy security and the potential negative environmental and economic effects of increased greenhouse gas emissions (and, more broadly, climate change) have spurred efforts in many countries to promote and harness renewable energy sources.19 Indeed, over 125 countries have explicit policy targets in place to promote renewable energy in one form or another, including targets to increase renewable energy as a share of energy supply and to increase installed capacity of specific technologies, among others.20 Renewable energy has historically cost more to generate than energy from conventional sources like fossil fuels (e.g., coal, petroleum, and natural gas). As a result, renewable energy has largely been uncompetitive with cheaper alternatives absent policy mechanisms that lower its generating costs and encourage (or mandate) its use. These mechanisms include fiscal incentives, such as tax credits to offset the cost of generating renewable energy, and regulatory policies that mandate the use of renewable energy and set its price. Often, governments implement a combination of these policies and measures to fuel the development and deployment of renewable energy resources and technologies. 19 EIA, International Energy Outlook 2011, September 2011, 4. 20 REN-21, Renewables 2013, 2013, 69. For more information on the market effects of clean energy incentive programs, see chapter 6 of this report. 2-8 2011 2012PDF Image | Renewable Energy and Related Services: Recent Developments
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