One of the most impactful aspects of President Obama’s legacy will be his recently released Clean Power Plan.
The plan works in tandem with newly issued Carbon Pollution Standards from the U.S. Environmental Protection Agency (EPA) and aims to reduce carbon dioxide (CO2) emissions from power plants by 870 million tons (or 32%) from 2005 levels by 2030.
Earlier in the month, I explained the details of the plan and examined how the new regulations might affect traditional fuels.
Now, I’m going to look at one of the biggest beneficiaries of the plan–the renewable energy sector. Both the wind and solar power industries are set to get a boost from states working to meet the EPA’s new emissions standards.
Creating the Perfect Environment
The renewable energy sector has already seen some nice growth in recent years. According to the EPA, the United States “uses three times more wind and 20 times more solar energy than it did in 2009, and the solar industry added jobs 10 times faster than the rest of the economy,” according to Renewable Energy World.
The Clean Power Plan will only accelerate that growth; renewables will eventually make up 28% of the nation’s energy mix.
The plan heavily pushes the use of renewable energy. In fact, the EPA was more aggressive with the amount of renewable energy it calculated when coming up with CO2 reduction requirements.
The EPA says there is “greater availability of clean generation” than in last year’s proposal. The increase in supply is attributed to “reduction in the cost of clean energy technology, as well as projections of continuing cost reductions,” says the EPA.
Because states and territories can decided on an individual level how they want to reach the new emission standards, the plan includes incentives for greater use of renewables. Overachieving governments will be rewarded with extra emission rate credits for “early reductions from zero-emitting wind or solar power projects.”
The First Investors
As is typical for renewable energy technologies, the federal government will be one of the first major investors.
In preparation for the release of the Clean Power Plan, the White House launched the National Community Solar Partnership, which aims to increase access to solar energy, particularly those with low to moderate incomes. The initiative plans to accomplish this by installing 300 megawatts of solar power systems in federally subsidized housing by 2020.
There is also funding for AmeriCorps to deploy solar systems and create jobs installing and maintaining those systems.
The administration also rounded up “more than $4 billion in private-sector commitments and executive actions to scale up investment in clean energy.”
The hope is that the combination of new regulations and the influx of cash, the clean energy industry will grab a bigger hold on the energy sector.
Good investing,
Samantha Solomon
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