2023 Sustainable Energy in America Factbook

Sponsored by:

Business Council for Sustainable Energy and Environmental and Energy Study Institute

 

2022 was a record-breaking year for investment in the energy transition and the deployment of renewable power, battery storage, and sustainable transportation according to the eleventh edition of the Sustainable Energy in America Factbook. The Factbook, published by BloombergNEF (BNEF) and the Business Council for Sustainable Energy (BCSE), was released on March 1 and is available to download for free at www.bcse.org/factbook.

The Factbook provides valuable year-over-year data and insights on the American energy transformation, with an in-depth look at the energy efficiency, renewable energy, and natural gas sectors, as well as emerging areas such as digitalization, micro-grids, offshore wind, hydrogen, and renewable natural gas. 

The eleventh edition of the Factbook provides new data and analysis about the performance of clean energy sectors by tracking year-on-year as well as long-term trends within the U.S. energy economy. Designed for a broad audience—from the energy professional, to the public policymaker, to the curious student—the Factbook offers an insightful and in-depth look at economics, market and investment dynamics, and technology trends.

Highlights

KEY TAKEAWAYS

The Business Council for Sustainable Energy and BloombergNEF publish an annual Sustainable Energy in America Factbook on trends in renewable energy, energy efficiency, and natural gas. Forty percent of U.S. power needs are met using natural gas, but in 2022 a record 23 percent were supplied from renewable energy technology. Over $1.1 trillion was invested into energy transition technologies in 2022 around the world, with a record $140 billion of that investment consisting of U.S. capital. China was responsible for almost half of the total investment. The Infrastructure Investment and Jobs Act (IIJA) (L. 117-58) and the Inflation Reduction Act (IRA) (P.L. 117-169) are making historic investments in clean energy and provide a baseline for what is needed in the energy transition. The IRA provides a decade of tax policy certainty, which has led to a boom in solar manufacturing and investment in clean energy projects.

 

Ethan Zindler, Head of Americas, BloombergNEF

• The Business Council for Sustainable Energy and BloombergNEF publish an annual Sustainable Energy in America Factbook on trends in renewable energy, energy efficiency, and natural gas.
• The war in Ukraine presented a major challenge for the energy sector in 2022. It caused supply chain backlogs and increased energy costs.
• Forty percent of electric power in the United States comes from natural gas. The transition to natural gas has had a role in the decommissioning of coal power plants. The United States has historically had relatively low wholesale prices for natural gas. 2022 saw the first dramatic uptick in prices in recent memory, caused by additional demand in Europe following gas shortages. Prices have since come down, settling at $2 to $3 per million BTU.
• Commodity costs for steel (used in wind turbines), polysilicon (used in solar panels), and lithium (used in batteries) all went up in 2022.
• Electric vehicle drivers did not see increases in energy costs relative to combustion engine drivers. The jump in fuel costs to commuters on a ‘per-gallon’ basis was much lower for those driving electric vehicles than those reliant on combustion engines. Correlated with that, there was a surge in electric vehicle sales within the United States, from about 650,000 vehicles sold in 2021 to nearly a million in 2022. This is about seven percent of all new car sales.
• Renewable energy represents the lowest-cost electricity-generating technology in many parts of the world.
• In order to decarbonize the U.S. power system by 2035, the goal of the Biden-Harris Administration, about 70 gigawatts of renewable energy need to be built per year. While investment has been growing over the past decade, we are currently developing about 30 gigawatts of renewable energy per year.
• Over $1.1 trillion was invested into new energy transition technologies last year around the world, with a record $140 billion of that investment consisting of U.S. capital. China was responsible for almost half of the total investment.
• In 2022, a record 23 percent of U.S. power needs were supplied from renewable energy sources. Almost all of the growth in the industry over the past decade has been from wind and solar.
• Post COVID-19, greenhouse gas emissions have rebounded, but they remain below 2019 levels, which will likely be the peak.
• With the power sector rapidly decarbonizing, its greenhouse gas emissions have now fallen below industrial sector emissions. In order to meet existing pledges to cut emissions, decarbonizing activities like steel and cement production will also be critical.

 

Lisa Jacobson, President, Business Council for Sustainable Energy

• The Business Council for Sustainable Energy is an energy trade association founded in 1992 by executives in the energy efficiency, natural gas, and renewable energy sectors.
• The Factbook helps us know where we have been, where we are now, and the trends projected out to the future.

 

Amy Farrell, Senior Vice President of Government and Public Affairs, CRES Forum

• Industrial processes account for about 29 percent of global energy use and one fifth of global greenhouse gas emissions.
• China accounts for 50 percent of global steel, cement, and chemical production, and nearly 60 percent of all aluminum production. The majority of manufacturing emissions are emitted in China.
• The United States has a competitive carbon advantage: the average product made in China results in about three times the carbon emissions than the same product made in the United States.
• Continuing to improve the emissions efficiency of the industrial sector can be done through employing technologies like carbon capture and hydrogen energy deployment.

 

Charles Bolden, Senior Director of Congressional Affairs, Solar Energy Industries Association

• The vast majority of U.S. imports of solar panels—about $8 billion in total—come from countries covered in the Auxin anticircumvention case, including Thailand, Malaysia, and Singapore. [U.S. solar panel manufacturer Auxin Solar accused Chinese competitors of passing their exports to the United States through these countries to circumvent U.S. tariffs.] The recent two-year reprieve of the circumvention tariffs is expected to cause a major spike in solar imports.
• The most recent Solar Market Insight Report shows strong growth in 2023 and projects even stronger growth in 2024.

 

Vincent Barnes, Senior Vice President of Policy and Research, Alliance to Save Energy

• The Infrastructure Investment and Jobs Act (IIJA) (L. 117-58) and the Inflation Reduction Act (IRA) (P.L. 117-169) investments are expected to bring utility energy-efficiency program spending back to above 2019 levels. Tax credits like the 25C Energy Efficient Home Improvement Credit will motivate homeowners to claim more credits. Developers are incentivized to build more ENERGY STAR® homes. There are additional incentives for retrofitting existing commercial buildings.
• The $27 billion Greenhouse Gas Reduction Fund includes $7 billion dedicated specifically to rooftop solar retrofitting projects in low-income communities.
• The International Energy Agency has indicated that better energy-efficiency practices alone can help the United States achieve 40 percent of the greenhouse gas emission reductions that the country has committed to under the Paris Agreement.

 

Biljana Kaumaya, Senior Director, Federal Affairs, American Clean Power

• The renewable energy sector has grown continuously for the past decade, with the exception of 2022, which saw slightly less growth than was seen in 2021. Possible reasons for this decrease in growth include supply chain issues, the need to update the grid, and permitting obstacles.
• Permitting reform is needed to increase implementation of renewable energy projects.
• Four gigawatts of battery storage were installed in 2022, which increased the total battery storage capacity by 80 percent.

 

Yvonne McIntyre, Vice President, Federal Affairs, Pacific Gas & Electric (PG&E) Corporation

• Increases in weather and climate-related disasters are leading people to look for ways to keep their own power on in their homes. This has led to an increase in residential solar and battery storage in California.
• As of February 2023, 54,000 PG&E customers have installed behind-the-meter battery storage in PG&E’s service territory, totaling 500 megawatts of capacity.
• Residential energy storage has the ability to help the reliability and resilience of the whole PG&E system. For example, PG&E has a virtual power plant pilot program with Tesla. Customers with Tesla batteries can join the program and PG&E pays them a fee for the right to access their stored electricity under certain conditions. PG&E can call on that energy storage when there is an overall lack of capacity to deliver power back to the grid. The program was deployed for the first time in August 2022, when 2,500 customers delivered 16.5 megawatts of power back to the grid. It was subsequently used nine more times in August and September 2022.

 

Jennifer Kane, Energy Policy Leader, Trane Technologies

• There is a lack of consistency across states in energy code adoption for residential and commercial properties.
• Federal agencies and federal buildings can exemplify best practice for energy efficiency by using the latest energy codes.

 

Q&A

 

Q: Over the last several years, the United States has passed significant pieces of legislation focusing on energy efficiency. Do any of these laws help states and localities that want to do more on building codes or building efficiency in general?

Kane

• Between IIJA and IRA, there are over a billion dollars allocated to supporting states in their adoption of more efficient energy codes. The provisions in IIJA are dedicated to helping states improve their energy efficiency through avenues including workforce development and technical assistance. The IRA provides funding for states to implement the most recent version of building energy codes.
• The Department of Energy estimates that 75 percent of buildings in the United States will be newly constructed or renovated by 2035. To meet climate goals, these buildings need to be consuming the least amount of energy possible.

 

Q: What are the trends in electric vehicles that you are seeing in PG&E's service territory and how are you thinking about them in terms of storage and the energy transition?

McIntyre

• California has a goal to end the sale of combustion engine cars after 2035.
• PG&E has over 425,000 electric vehicles in its service territory, which is more than anywhere else in the country. One in every four vehicles sold in its service territory in 2022 was an electric vehicle. PG&E confirms the grid can handle increasing electric vehicle adoption.
• California has the most solar energy installations of any state in the country. To make up for the decreased energy production when the sun goes down, peaker plants, which are often powered by natural gas, are activated. Instead of relying on natural gas-fired peaker plants, PG&E is attempting to rely instead on electric vehicles.
• An electric vehicle battery has the capability to power a house for three days and a Tesla Powerwall has the ability to power a house for three to four hours. PG&E has entered into partnerships with Ford and General Motors to test bi-directional charging technologies.
• The partnership is using the Ford F150 Lightning to look at how bi-directional charging would work and how PG&E’s system needs to be set up to access the power. PG&E is offering a special rate and allowing customers to opt into this program. Due to the large number of electric vehicles already in its system, PG&E hopes that by having most of its customers join this program, it will not have to rely on fossil fuel peaker plants.
• The partnership with General Motors is testing all types of equipment, from high-voltage equipment to appliances, at their lab in San Ramon, California.
• Through partnerships between utilities and the auto industry, PG&E sees that electric vehicles can benefit the electricity grid.

 

Q: How is the solar energy industry feeling going into 2023? How important is policy certainty for investment in the industries that you work in?

Bolden

• The policies passed by Congress provide assurance on domestic manufacturing and bringing jobs back to the United States, and a lot of companies in the Solar Energy Industries Association are focusing on increasing domestic manufacturing jobs. Right now, due to the current capacity of the domestic supply chain, the United States needs to figure out what other countries, in addition to China, we can depend on for solar manufacturing needs.

 

Q: Can you discuss past policies Congress has passed that relate to clean energy and what policies we are lacking at this moment?

Kaumaya

• The IRA provides a decade of tax policy certainty, which has led to a boom in solar manufacturing and investment in clean energy projects. Permitting reform is necessary to realize the full benefits of the IRA because there is a lot of infrastructure that needs to be built, including plants and transmission lines.

Bolden

• When it comes to transmission lines, decision makers have to consider the environmental justice impacts of such development and make sure the process and siting is just and equitable.

Farrell

• There is alignment between reducing domestic greenhouse gas emissions, reducing global emissions, and modernizing permitting. Together, these actions will increase the build-out of clean energy, increase access to critical energy resources in the United States, and secure the supply chain.

 

Q: What else do you want Congressional staff to know about as it relates to energy efficiency?

Barnes

• IRA and IIJA are historic in terms of energy investments, but they only provide a foundation for what is needed in the energy transition. A step the United States should be looking toward is investing in demand flexibility and grid-interactive efficient buildings.
• Demand flexibility, also known as active efficiency or digital energy efficiency, is about the ability of technologies to communicate to make equipment, homes, and buildings more efficient. Bi-directional charging is an example of a demand flexibility technology.
• Demand flexibility is about a building's ability to shift, share, and shed load on a regular basis. We need more investment in this technology to make this happen.

Kane

• There is a new trend to implement building performance standards [policies that require existing buildings to meet certain energy-efficiency or greenhouse gas emission targets] as a way for larger commercial buildings to reduce their energy consumption over time.
• There is a national coalition with over 30 cities and a few states that have already implemented building performance standards.
• Many policies for energy efficiency can work in conjunction with the funding available through IRA. Many energy-efficient improvements qualify for a tax credit.

 

Q: Data shows that between the production of energy and its use, there is a tremendous amount of loss. Can we upgrade the grid and enhance the efficiency of energy delivery? Is any particular industry looking into how to transmit electricity more efficiently?

Barnes

• The loss of energy in the production and utilization of energy is an energy efficiency issue. When energy is produced more efficiently, there are fewer energy inputs needed to produce that energy.
• There are technologies that can make the production of energy more efficient. Efficiency can be improved at the manufacturing level (i.e., producing the solar panels), it can happen when extracting oil and gas, or it can happen in the distribution chain. Energy efficiency can be improved at all of those stages of processing and development to avoid the waste of energy production.

McIntyre

• Part of the energy is lost during delivery. There are tremendous line losses in the power lines themselves.
• This is also a materials issue. Because transmission lines are currently made with copper wires, they produce a lot of heat. The heat produced from these lines is also lost energy. At the Department of Energy, materials experts are working on solving this problem.

Farrell

• The Department of Energy’s Loan Program Office has one program specifically focused on investments at existing facilities that do this type of work. There are also offices that focus on broader transmission technology.

 

Q: What is the outlook on hydrogen? How many different sectors could benefit potentially from hydrogen?

Farrell

• The current hydrogen industry is small, but it is expected to scale and grow, particularly in industrial processes.
• Projects such as the ACES Delta project in Utah are game changers from an energy storage standpoint. In the ACES project, green hydrogen will be stored in one salt cavern, providing 150 gigawatt hours of storage.
• Hydrogen is going to be a significant part of the economy and an opportunity to reduce emissions and compete globally.

McIntyre

• There was funding in IIJA for hydrogen hubs and there are tax credits in IRA for hydrogen.
• California has gone after the hydrogen hub funding, and PG&E is currently collaborating with the state on a project in Northern California.
• PG&E set some pretty aggressive climate goals in 2022 to substantially reduce greenhouse gas emissions and gas usage. Part of these goals include putting hydrogen into PG&E pipelines.
• The industrial sector is one of the hardest sectors to decarbonize, so that is where we are trying to see if we can use hydrogen instead of natural gas.

Kaumaya

• There is growing interest in green hydrogen.
• In March 2023, Sens. Chris Coons (D-Del.) and John Cornyn (R-Texas) introduced a package of four bills aimed at boosting hydrogen technologies to reduce greenhouse gas emissions.

Zindler

• The most likely and important application for hydrogen is industrial processes.
• There has not been real progress on reducing carbon dioxide emissions from the industrial sector. Making cement or steel requires very high heat and it is difficult to provide that without burning something that produces carbon dioxide emissions. Hydrogen, which can be burned without emitting carbon dioxide, is likely to help decarbonize industry.
• The IRA is a potential game changer for hydrogen. Provisions in the IRA potentially offer up to $3 per kilogram for the production of hydrogen. Based on BloombergNEF’s projections, you could have a situation where $3 is more than the cost of actually producing hydrogen. In this situation, the federal government would potentially be paying people to produce hydrogen.
• The challenge is that IRA does not necessarily drive demand for green hydrogen. The hydrogen hubs might help drive demand, but there are a lot of unanswered questions.
• The definition of green hydrogen is not straightforward. The Treasury Department will have to address this when they write rules around how this tax credit works by the August 2023 deadline. Is hydrogen green if a co-located solar plant and battery provide the power to produce the hydrogen? Is hydrogen green if the operator buys power off the grid to run the operations and is located in a state where 75 percent of power comes from renewable energy? The answers to these questions will really define how the hydrogen industry can grow in the United States.

 

Q: Do you have any comments on virtual power plants? Can you give a little more detail on how they work?

McIntyre

• PG&E already has a virtual power plant set up with Tesla. Customers with Tesla Powerwall batteries who sign up with PG&E can receive $2 for every incremental kilowatt hour of electricity they return to the grid when there is a capacity shortage. Customers are also able to opt out at any time during a shortage event if they are worried about the amount of power they have stored.
• In February 2023, PG&E announced a program specifically for summer reliability with Sunrun. Sunrun will enroll up to 7,500 customers with home solar and battery systems in PG&E’s service territory who will be capable of discharging 30 megawatts back to the grid during times of constraint. Customers enrolled in the program will feed power back to the grid every day from 7 p.m. to 9 p.m. during the months of August through October. In exchange, they receive an upfront payment of $750 and a free smart thermostat. PG&E will ensure that customers retain enough energy for their own personal use while they are also providing power to the grid.

 

Q: What do Congress and federal regulatory bodies need to do to increase involvement in energy efficiency programs like those that PG&E is implementing? Or is this a decision that needs to be made at the state and local level?

McIntyre

• At the state level, the most important decision to be made right now is how to structure rates and programs to attract customers to join such programs. It is always a challenge to find the right rate structure that is going to get regulatory approval.

 

Q: Any last thoughts before we wrap up?

Bolden

• Throughout my time working in the solar industry, one of the major issues is equity and environmental justice. Respiratory issues have been leading killers among Black, Indigenous, and communities of color for a long time. The more the United States uses solar energy and hydrogen, the less these communities will be impacted by air pollution, which will in turn decrease current health disparities.

Barnes

• One of the ways to ensure that we are improving the health of individuals inside their homes, particularly in low-income and disadvantaged communities, is through energy efficiency investments.
• The Greenhouse Gas Reduction Fund provides $7 billion to increase solar installations in low-income and disadvantaged communities.

McIntyre

• Electric vehicles are also a way to improve the air quality of disadvantaged neighborhoods, many of which are located next to highways.

Farrell

• The global demand for energy is increasing and we need to think about how the United States can have an “emissions advantage” in how its energy is produced.

 

Compiled by Tyler Burkhardt, Madeline Dawson, and Isabella Millet and edited for clarity and length. This is not a transcript.