{"id":7739,"date":"2021-06-18T00:13:50","date_gmt":"2021-06-18T07:13:50","guid":{"rendered":"https:\/\/maccelerator.la\/?p=7739"},"modified":"2021-06-22T23:01:12","modified_gmt":"2021-06-23T06:01:12","slug":"shifting-towards-wind-and-solar","status":"publish","type":"post","link":"https:\/\/maccelerator.la\/en\/blog\/startups\/shifting-towards-wind-and-solar\/","title":{"rendered":"Shifting Towards Wind and Solar"},"content":{"rendered":"\n

There is change coming in the energy sector of our economy. More oil and natural gas companies are starting to understand that unless they begin to change their approach to energy, they will be left behind in the coming years. <\/p>\n\n\n\n

Clean energy has become one of the fastest-growing sectors in our emerging markets and companies are starting to catch on. <\/p>\n\n\n\n

<\/p>\n\n\n\n

How is clean energy one of the fastest-growing sectors in our emerging markets? <\/strong><\/h2>\n\n\n\n

Interest in renewable energies has grown exponentially in the past decade, an increase that is expected to continue to grow. The widespread investments in renewable energies are part of the reason the sector is growing so quickly in our emerging markets. <\/p>\n\n\n\n

<\/p>\n\n\n\n

Market Shifts Towards Renewable Energy <\/strong><\/h2>\n\n\n\n

Before 2010, the annual global investment<\/a> in clean energy was growing. It went from being essentially only tens of billions to $177 billion by 2009. In the next decade, we saw an even greater increase in investment. Growing from $177 billion, investments reached $303.5 billion in 2020. <\/p>\n\n\n\n

As interest in renewables has continued to grow, so has the sector\u2019s impact on capital markets. According to Visual Capitalist<\/a>, out of the 174 announced M&A deals in the United States power and utilities industry slated for 2021, 83% involve renewables. <\/p>\n\n\n\n

\"Market<\/figure>\n\n\n\n

Part of the reason for the impressive investments is due to just have broad renewable energies reach. Clean and renewable energy includes many promising sectors such as hydro, nuclear, solar, wind, and carbon capture for fossil fuel production. Though these sectors have all received a large number of investments, a few have emerged triumphant compared to the others. Solar and wind. <\/p>\n\n\n\n

Over the past 10 years, wind and solar energy have been installed globally more than all other forms of renewables, and they are expected to surpass both gas and coal by 2024. This is, of course, a huge shift in implementation and investments, but what has led solar and wind to this point? <\/p>\n\n\n\n

<\/p>\n\n\n\n

Key Drivers of Solar Power<\/strong><\/h2>\n\n\n\n

Solar power\u2019s growth<\/a> to one of the central renewable energy resources is due to both environmental concerns and economics. Solar has become competitive. <\/p>\n\n\n\n

According to Forbes<\/a>, solar costs have fallen by 90% in this past century, most of this development happening in this past decade of this popularity has been driven by the fact that up to now, all capacity of solar panels installed has been financed and supported by entities, often by governments. <\/p>\n\n\n\n

This has created a guarantee of payment, which is an obvious attraction to many companies. The increase in solar panel production, installation, and use, all led up to a steep reduction in costs associated with renewables. <\/p>\n\n\n\n

Costs associated with solar power units have decreased, increasing their popularity. Forbes estimates that we will continue to see the price decrease, specifically between 15 and 25% even further, over the next 10 years. <\/p>\n\n\n\n

As solar power continues to become cheaper, this will likely drive down the price of coal and other thermal generation, in order to attempt to compete. This will eventually drive these methods<\/a> of energy off the market because they just can\u2019t compete. <\/p>\n\n\n\n

According to Blue & Green Tomorrow<\/a>, another reason why solar power has decreased in price so drastically is partially due to a lowering price of equipment used to produce and process solar power. Prices on this kind of equipment have gone down by  70% since 2010. When single families were installing solar panels a decade ago, this installation cost<\/a> about $40,000, compared to only $18,000 today. <\/p>\n\n\n\n

This decrease<\/a> in the price of installation is a factor that has led to consumers buying solar power directly, rather than solar only being bought by companies. On top of the lower prices and the improvements in solar power technology<\/a>, government entities offer tax credits and rebates to incentivize<\/a> people to make the switch, contributing to the increase in consumer use of solar energy. <\/p>\n\n\n\n

According to Blue & Green Tomorrow, consumers in the United States can claim 26% off their federal taxes for solar power installations. In Europe, these incentives are even higher. <\/p>\n\n\n\n

As solar power becomes more and more reliable and more affordable for consumers, it is clear why it is such a huge part of our emerging market. Wind and solar are becoming more reliable than coal and oil, and even more accessible to single-family consumers.  <\/p>\n\n\n\n

<\/p>\n\n\n\n

Governmental Support of Clean Energy <\/strong><\/h2>\n\n\n\n

The United States government has long been a proponent of the oil industry. The times are changing and government investment and subsidization of clean energy are growing. <\/p>\n\n\n\n

Back in Obama\u2019s term, following the 2008 crash of the economy, his administration pumped $90 billion<\/a> into wind turbines, solar panels, and batteries in order to kickstart the economy. Today, the Biden administration is continuing the Obama administration\u2019s legacy with a new commitment to clean energy. <\/p>\n\n\n\n

\"Governmental
Photo by Appolinary Kalashnikova.<\/figcaption><\/figure>\n\n\n\n

Biden recently announced a proposal to pump almost ten times Obama\u2019s commitment into clean energy. He wants to see an infusion of more than $350 billion directly into clean energy and around $400 billion extending and expanding tax credits for clean energy generation and storage. <\/p>\n\n\n\n

The Biden administration hopes that this effort continues to grow and someday will lead to a mandate for utilities to produce power that is carbon-free by 2035. <\/p>\n\n\n\n

With the polarized United States political system, it is unclear what will happen with the next administration, but if one thing is certain, it is that solar and wind energy are on the rise.<\/p>\n\n\n\n

<\/p>\n\n\n\n

The Future of Renewable Energy <\/strong><\/h2>\n\n\n\n

The Paris Agreement, which brought together countries all around the world, commits the countries to do everything they can to meet certain targets. The most notable and difficult target to reach is to keep global warming below 2 degrees Celsius. <\/p>\n\n\n\n

If this is going to be achieved, the use of coal and fossil fuels needs to fall even faster than they have. In an article comparing the impact of fossil fuels and clean energy, Forbes writes about how the UN Secretary-General has urged OECD countries to phase out coal entirely by 2030. This is of course ambitious, but many countries are trying to meet this goal, as they acknowledge the risks. <\/p>\n\n\n\n

Countries such as Belgium, Austra, and Sweden have already closed their last coal plants and many others are starting to follow. Last year, Spain closed half of their coal plants and have planned to close the rest by 2025. Similarly, Portugal will close its very last coal plant this year and even the UK, where coal was once a provider of 70% of electricity in the \u201990s, will be entirely coal-free by 2024. <\/p>\n\n\n\n

European countries are acting quickly, and this is no surprise! As wind and solar increase in efficiency and decrease in cost, coal use will continue to fall. <\/p>\n\n\n\n

While the western world continues to shift towards renewables, that is only a small portion of the world\u2019s population. Countries like India are still building coal plants today, but renewable energy has been outpacing coal capacity in the country since 2017. <\/p>\n\n\n\n

Though the United Nations suggests zero coal<\/strong> use by 2030, India has promised to source 40% of its electricity from renewables by then but is on track to almost double that. Though that is not zero, it is a big step for such an enormous country. <\/p>\n\n\n\n

As technology improves even further and more jobs are able to come from renewables, we can expect countries like India and China to commit to even more renewables and less coal. <\/p>\n\n\n\n

Decreasing the coal production in China is a bit different than in India. The reason China produces so much coal is not to provide energy for its citizens, but rather to exploit a system of promotion based on GDP and investment metrics<\/a>. In fact, almost all of China\u2019s coal plants experienced a loss in profits last year. <\/p>\n\n\n\n

Though coal plants continue to be built in China and continue to stay open, emissions are governed by coal use, not coal capacity<\/strong>. This is promising because since these plants are not getting a profit, there are little reinforcements for these plants to stay open for a long time. Renewable energy sources are fast-growing and the decrease of coal is virtually inevitable. <\/p>\n\n\n\n

<\/p>\n\n\n\n

What to Expect For Wind and Solar<\/strong><\/h2>\n\n\n\n

It is clear that wind and solar are central in the future of the world\u2019s energy consumption. Not only is governmental support growing for solar and wind energy, but so are investments. <\/p>\n\n\n\n

In the startup<\/a> community<\/a><\/strong>, wind and solar are front and center for many venture capitalists\u2019 investments. Based on investments and a shift in the economy, it is clear that renewables are going to become more and more prevalent. <\/p>\n\n\n\n

\"What
Photo by Science in HD.<\/figcaption><\/figure>\n\n\n\n

One thing in the way of the fast-tracked increase of renewable energy, is politics. Especially in the United States, coal and oil have long remained king of power sources, something that many politicians are hesitant to change. <\/p>\n\n\n\n

Climate change has become a partisan issue, where one party remains loyal to coal, while another is dead-set on renewables. While the political climate looks optimistic towards renewable energy<\/strong>, who knows what will happen in four years. <\/p>\n","protected":false},"excerpt":{"rendered":"

How is clean energy one of the fastest-growing sectors in our emerging markets? <\/p>\n","protected":false},"author":5,"featured_media":7746,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1251],"tags":[1372,1373],"class_list":["post-7739","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-startups","tag-cleantech","tag-energy"],"_links":{"self":[{"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/posts\/7739","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/comments?post=7739"}],"version-history":[{"count":0,"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/posts\/7739\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/media\/7746"}],"wp:attachment":[{"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/media?parent=7739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/categories?post=7739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maccelerator.la\/en\/wp-json\/wp\/v2\/tags?post=7739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}