The country’s installed wind energy capacity grew at an AAGR of 28.5% during 2000-08 and is expected to further grow at an AAGR of 11.8% during 2008-15. The solar PV capacity of the US increased at an AAGR of 26% during 200-08. The capacity is expected to further increase at an AAGR of 32.6% during 2008-15.
Renewable energy growth in the US has been led by the Renewable Portfolio Standard (RPS). Although there are no Federal RPS targets, the different levels of RPS set by the state governments have given a big boost to renewable energy industry in the country. The other important policy instrument that has helped in developing the renewable energy sector in the country is the Production Tax Credits (PTCs). PTCs played a vital role in increasing wind power capacity in the US, allowing the country to become the largest wind power installer in the world. Business and residential tax credits, loans, grants and accelerated depreciation provisions are the other major policies instruments supporting renewable energy in the country. In addition to these federal policies, different state governments also offer various state level policies and incentives for the promotion of renewable energy industry
The US renewable energy industry will hugely benefit from the policies and plans of the Obama Administration. The Obama administration aims to generate 10% of the total electricity from renewable energy by 2012 and 25% by 2025. In 2008, only 3% of the electricity generated in the US came from renewable energy sources (excluding conventional hydro). In order to reach the specified targets, the US will require large investments in the sector.
The first step to reach this target was taken by the passing of the American Recovery and Reinvestment Act (ARRA), which provides more than US $70 billion for the renewable energy sector and energy efficiency measures. In addition, the new Government also aims to establish a federal Renewable Portfolio Standard (RPS).
The Obama administration’s efforts to stimulate the renewable energy sector in the country are expected to boost investments in the sector. ARRA provides various incentives to attract investors and promote renewable energy in the country. Obama’s strong support for renewables assures steady government support for renewables in the country and creates conducive environment for investment in the sector
The renewable energy industry in Canada and the Latin American countries offers huge potentials for future growth, however these countries require a stronger renewable energy policy framework for the long term growth of the industry.
Canada lacks a national plan for renewable energy development. The federal government offers incentives for renewable energy production but there are no set targets or mandates for the promotion of the industry in the country. However, in recent years, provincial initiatives have boosted the renewable energy industry. Various provinces offer feed in tariffs or have set mandatory RPS targets in order to promote renewable energy. The Federal Government also provides incentives through different ecoENERGY programs. As a result of these policies and incentives the wind power industry in Canada has increased at an AAGR of 35.6% during 2000-08. The wind industry is expected further increase at an AAGR of 20.5% during 2008-15. Although provincial targets have boosted the renewable energy industry in the country in recent years, the lack of a Federal target or policy has restricted the growth to only a few provinces.
In other major countries in the South and Central America like Mexico, Brazil and Argentina, the renewable energy policy framework and incentive levels provided are not attractive enough to attract large scale investments In Brazil for example, the Government aimed to install 1,100 MW of new wind capacity through PROINFA program till 2008. However the country’s total wind installed capacity in 2008 stood at 341 MW, 69% less than the target. The South American countries have good potential for growth in this market but there is a need to further improve the government incentives given in the sector.