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The latest data and publications from the US Energy Information Administration reveal a promising outlook for renewable energy and electric vehicles. These technologies can help decarbonize power grids and transportation, while achieving synergy. The electricity output of solar panels and wind turbines can be used to charge EVs, and this takes less than 20 minutes with DC fast chargers. EVs that are parked and plugged can also absorb surplus production from renewables, which has proven a challenge for grid operators.
Inflation is creating an incentive for building owners to invest in their own renewable energy systems. According to CPI data published by the US Bureau of Labor Statistics, electricity prices increased by 10.7% in the 12-month period ending in January 2022.
- The electricity produced by solar panels and wind turbines is less susceptible to inflation, since these systems use free energy inputs. Ownership costs are relatively low after the initial investment, and they are mostly related to maintenance and eventual part replacements.
- On the other hand, conventional power plants fired by coal and natural gas depend on the price of these fuels. Energy commodities in general were up by 39.9% between January 2021 and January 2022.
- By using onsite renewable generation, building owners can mitigate the impact of electricity price inflation. The ownership costs of clean energy systems are predictable, while the kilowatt-hour prices are constantly changing.
Renewable energy can also help reduce the emissions associated with building heating. Traditionally, buildings have used combustion-based heating systems that run with natural gas, heating oil or propane. These fuels are burned on site, which means the associated emissions are released directly in urban areas. However, fully electric heating becomes viable when renewable energy is combined with infrared heaters and heat pumps.
Five US States Have New Renewable Energy Targets
There were five US states who introduced or raised renewable energy targets in 2021. These are officially called Renewable Portfolio Standards (RPS) or Clean Energy Standards (CES), and the target is set as a renewable energy percentage by a given year. The following table summarizes the five clean energy standards introduced last year:
|State||Previous Clean Energy Target||New Clean Energy Target|
|Delaware||28% by 2030||40% by 2035|
|Oregon||50% by 2040||100% by 2040|
|North Carolina||12.5% by 2021||100% by 2050|
|Illinois||25% by 2026||50% by 2040|
|Nebraska||None||100% by 2050|
By December 2021, there were RPS or CES laws in 31 states and Washington DC. Nebraska didn’t have a target before, but the state had already reached 41% renewable generation by 2021. With its recent commitment, Nebraska becomes the 20th state with a target of 100% clean electricity by 2050.
These targets are legally binding for electricity providers, with major penalties for not meeting them. This ensures a market demand for clean energy while the target is met, attracting investment in projects like wind and solar farms. RPS or CES laws often lead to incentive programs from electricity providers, since clean generation systems owned by their customers also count towards the goal. There are also 7 states with non-binding clean energy targets, which means they are encouraged but without legal consequences for electricity providers who miss them.
US EIA Growth Forecast: New Generation Systems in 2022
Fossil fuels still dominate US grids, but solar power is currently growing faster than all other forms of generation. According to the US EIA, utility-scale generation capacity will increase by 46.1 gigawatts (GW) in 2022, and solar PV will account for 22.5 GW, representing 46% of planned capacity additions. To put this into perspective, one gigawatt of solar capacity generates enough electricity for 189,000 American homes, on average. For comparison, the US installed 15.5 GW of utility-scale solar power in 2021.
Although coal is being phased out in many states, natural gas consumption is still growing in the power sector. US grids will add 9.6 GW of gas-fired generation in 2022, which represents 21% of planned capacity additions. In other words, natural gas will be the electricity source with the 2nd highest growth this year, surpassed only by solar power. Wind generation is set to grow by 7.6 GW in 2022, representing 17% of planned capacity. This places wind power in third place after solar PV and natural gas.
Hybrid and Electric Vehicles Now Represent 11% of Light-Duty Vehicle Sales in the US
The US EIA has been tracking hybrid, electric and plug-in hybrid vehicle sales since 2014. These three vehicle types had very small markets before 2020, but sales have grown significantly during the last two years. Combined, the three vehicle types account for 11% of light-duty vehicles sales in Q4 2021.
- Existing hybrid and EV models are selling more but product variety is also growing: 126 new models were introduced in 2021 alone.
- The hybrid and EV selection now includes larger vehicles like crossovers, pickups and vans.
The EV market can be expected to grow at a faster pace if DC fast chargers become widely available. According to the US EPA, a DC fast charger can provide at least 60 miles of battery charge for every 20 minutes, while Level 1 and Level 2 AC chargers need several hours to achieve this. Currently, fast charging infrastructure is being deployed mostly in the coastal states.