This Post was submitted by Climate Scorecard US Country Manager Stephanie Gagnon
The United States invests heavily in research and development (R&D) to improve efficiency and reduce costs of renewable energy. Through the successful SunShot Initiative, the U.S. Department of Energy (DOE) and Solar Technologies Office (SETO) invests hundreds of millions of dollars in reducing the cost per kilowatt-hour of solar energy.
SETO launched the SunShot Initiative in 2011 with the goal of cutting the per-kWh cost of utility-scale solar photovoltaic power from $0.28 to $0.06 by 2020. The program was tremendously successful, and was renewed in 2016 with the goal of cutting the cost an additional 50% to $0.03 by 2030. In 2017, utility-scale solar managed to hit their 2020 target of $0.06 per kWh. In addition to R&D support, federal tax incentives supported the expanded deployment of solar projects and their reduced cost.
Source: U.S. Department of Energy https://www.energy.gov/eere/solar/sunshot-2030
In March 2021, DOE announced an update to the targets and around $128 million in additional funding to “lower costs, improve performance, and speed the deployment of solar energy technologies.” The new targets include cutting the costs of solar from its current price of $0.046/kWh to $0.03/kWh by 2025, and reaching $0.02/kWh by 2030. The Biden Administration has an overall target of powering the country with 100% clean electricity by 2035.
According to the Solar Energy Industries Association, solar electricity generation capacity has grown by an average of around 42% per year over the past decade. As of 2020, the U.S. had more than 97 gigawatts of solar capacity, or enough to power 18 million homes – about 3% of the nation’s total electricity demand, up from 0.01% in 2010. Solar is also the fastest-growing generation source in the U.S., accounting for 43% of all new electric capacity added to the grid in 2020.
2019 was a breakthrough year for solar energy and renewables as a whole. It marked the year the cost of renewable energy became cheaper than fossil fuels, whose cheapest sources averaged $0.044/kWh (combined cycle natural gas) and $0.06/kWh (coal), according to Lazard.
While many factors contribute to the dramatic year-over-year reductions in costs of solar energy generation, the impact of dedicated R&D funding cannot be overstated. Similar investments should be made in other technologies, including other renewables, zero emission fuels, and carbon capture and sequestration.