Every year the Renewable Energy Network for the 21st Century (REN21) and the Worldwatch Institute put together a profile and report card of the world’s renewable energy sector.

The REN21 Renewables 2007 Global Status Report found that last year, wind power capacity increased about 28 percent and solar power capacity went up 52 percent. Renewable energy employs 2.4 million people and 65 countries now have national standards for accelerating the use of renewables. Investors and businesses of all sizes have followed suit. And while that’s impressive, Mohamed El-Ashr, Chair of Ren21, had this interesting comment:

“So much has happened in the renewable energy sector during the past five years that the perceptions of some politicians and energy-sector analysts lag far behind the reality of where the renewables industry is today … This leadership has never been more important, as renewable energy has now reached the top of the international policy agenda under the United Nations and the G8.”

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This post is designed as a complement to a recent story by Timothy Hurst on article U.S. Investors and renewable energy.

Renewable energy has attracted a lot of attention lately as the world looks for cleaner ways to power our world. Wind and solar stand as the most recognizable clean, green dynamos, but they still struggle to compete with traditional and entrenched power producers. True to conventional economic values, competition is everything. Yet, in the U.S.A. these technologies have survived in the dog-eat-dog industry for decades mostly without the aid of government subsidies (unlike coal and oil), and many claim that renewables could take off with just a little help from Uncle Sam. What are the obstacles? Are government subsidies the only saving grace for renewables? This post hopes to shed some light on the topic and burn through the conflicting noise that surrounds this fundamental and controversial industry.

It seems like I’m always reading articles about improvements, investments, and the promise of renewable energy. For a more practical perspective, I recently asked a successful businessman, who sometimes works with solar panels, for his opinion. Did he think that solar was going to boom in the next few years? His opinion was that the industry would need more government subsidies to really take off. Even with high oil prices, it was still simply too expensive to invest on a small scale. You might regain your initial investment in 15+ years in ideal conditions. Even in states with incentives to support renewable energy, it’s expensive. His view echoed my cousin’s frustration. Yet despite the initial cost, renewables are still an attractive option. As expensive as it may be to buy and install solar panels, it’s also very expensive ($1.8-billion and rising) to build a new coal-fired power plant with “clean coal” technologies. Hidden costs also plague coal power plants: the cost to clean up mercury emissions, the water required to operate, and in some places, the cost of carbon credits. Finally, the bottom line: how much does it cost to generate each kilowatt hour? Compare two graphs, one for coal and one for solar, and you may be surprised. (more…)