overview


solar generation is decentralized over an area and is compar- atively smaller; distributed solar units are typically located on the rooftops of structures and buildings. By generating their own energy, consumers essentially become utilities’ competi- tors and shrink the cost spread of grid operations and main- tenance. The EIA has begun collecting data on the country’s distributive solar generation: in 2014, distributed photovoltaic solar generated just over a third of total solar generation.


Wind: Geographic and Supplier Concentration Like solar, growth in the wind industry hovered in the double-digits for most of the past decade, due largely to the federal production tax credit (PTC) and state-specifi c sup- port in fi nancing and renewable targets. EIA data indicates that between 2005 and 2014 wind generation increased at an annualized 29.4%. The Government Accountability Offi ce reports that wind represented the second largest increase in generation of all energy sources after natural gas between 2001 and 2013. From an industry perspective, the wind power industry is anticipated to grow at an annualized 10.3%, with revenue reaching over $7.6 billion in the fi ve years to 2016.


Although the country’s 52,000 wind turbines are installed


across 40 states, wind generation is geographically con- centrated. Wind speeds on average tend to be higher in the middle of the continental US, particularly in the Great Plains. Texas dominates with over 17,700 MW of wind power capacity in 2015, followed by Iowa (6212 MW), California (6108), Oklahoma (5184), and Illinois (3842 MW), according to the Department of Energy. These fi ve states account for about 54% of the country’s total wind power capacity. As


20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000


0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2008 2010 2011 2012 2013 2014


such, they have seen signifi cant capital investments and job growth in wind farms and facilities in recent years. For ex- ample, the Des Moines Register recently reported that there are now 215 Iowa businesses and 6000 jobs connected to the state’s wind industry.


Concentration also exists in wind turbine manufactur- ing, the upstream equipment suppliers of nacelles, blades, towers, and other necessary components. Three manufac- turers—General Electric, Siemens, and Vistas—supply over 90.0% of the domestic wind market. High market share concentration has led to consolidating production and lower manufacturing footprint among certain operators, as well as declining turbine prices, which in turn have lowered project costs. The 2014 Wind Technologies Market Report found that turbine prices have declined between 20–40% since late 2008, despite technological improvements such as larger ro- tor diameters and higher hub heights.


Policy and Regulatory Drivers Government support has been and continues to be vital in


propping up renewable energy markets. At the federal level, wind and solar have benefi tted from subsidies in the form of the Production Tax Credit (PTC) and Investment Tax Credit (ITC). The PTC provides 2.3 cents per kW-hr of electricity generated from wind, geothermal and “closed loop” biomass (using organic matter from plants planted exclusively for the purpose of generating electricity) to qualifying producers. The ITC grants a 30% tax credit for residential and commercial solar systems. These incentives have been crucial to solar and wind development, as they lower project costs and pre- vent shortfalls in investment.


Net Generaon of Electricity by Solar Power


10 — Energy Manufacturing 2016


MW / hr


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