The North American Renewable Energy Industry: Market Summary
By Melanie Gong, Joshua Barragan, Divjot Bedi, Nabil Gutierrez (Analysts 2020–2021)
Market Size and Overview
In 2017, the global renewable energy market was estimated to be $928.0 billion and is projected to grow to $1512.3 billion by 2025, posting a 6.1% CAGR in the 2020–2025 period. North America is a prominent leader in sustainable energy initiatives and innovation, with the United States being a key player in the global market. In fact, by 2026, the US aims to increase its share of the global renewable energy market up to 30%. Among the main sources of this growth is the prominent use of solar photovoltaics. Other regional markets, like Canada, are also experiencing considerable growth in the renewable energy sector as a result of improved wind and solar power technologies.
Current Trends
Technological advancement, decreasing costs, and increased demand for grid resiliency currently drive the growth of the renewable energy sector. The natural disasters we have seen in 2020 such as hurricanes and wildfires have increased demand for grid resiliency and distributed energy resources (DERs), largely because of the long-lasting power outages that they cause. Companies and consumers have increasingly used microgrids and DERs to support resiliency. Finally, decreasing costs due to improved technologies also driven growth in the industry. In some parts of the United States, the cost of producing onshore wind energy is less than photovoltaic-derived energy. Furthermore, an incoming Biden presidency has the potential to strengthen government support for renewable energy and carbon emission reduction, providing a strong tailwind for the market. The constant growing awareness of environmental issues have also propelled consistent investments from the private sector into the renewable power industry.
Startups
Startups of particular interest to us in the North American renewable energy sector include Solstice and Green Mountain Power. Solstice is a startup structured around providing access to solar energy for every American household. They present an affordable solution that enables homeowners to participate in community solar. By enrolling in a local solar garden, homeowners no longer need to install and pay upfront costs for rooftop solar, while still receiving all the benefits of solar power. Having secured $1.6M in seed round funding with a commitment to cleantech, Solstice is well-positioned in the NA renewable energy industry as an up-and-coming company.
On the other hand, Green Mountain Power’s approach to providing renewable energy for Vermont homes focuses on providing utility services, entirely replacing the need for another energy provider. GMP sells and distributes electricity, and also reports outages, provides meter reading, and offers consumers a platform for bills payment. GMP’s energy supply is 94% carbon-free and 63% renewable and has been recognized as a Solar Champion by Vote Solar for their service in Vermont. Both Solstice and Green Mountain Power present innovative, viable approaches for clean energy in the NA market, and we’re extremely excited for their future.
