Market Overview

The success of renewable energy sources and its rapid up-take has been attributed to three factors, (1) concern over remaining fossil fuel reserves, import dependence and security of supply, (2) concern about environmental pollution, and (3) government support and financial incentives. While the first two of these factors are fundamental drivers, without financial incentives which are currently offered by nearly 70 governments, renewable energy would not have taken off because of its high costs.

Renewable energy is seen by many as a sustainable, environmentally friendly energy for a polluted industrialized world, with rapidly developing new technologies. The main areas that are being focused on are solar photovoltaic, solar thermal, wind power, hydro power, biomass, and geothermal high temperature electricity generation and low temperature heat.

The majority of the Solar industry in the United States is made up by the PV sector: PV is mainly used for power generation in both residential and commercial developments. Hot water solar systems in the USA, Canada and Australia, used in heating swimming pools, have an installed capacity of 18 Giga Watt as of 2005. However, China is the world leader of hot water solar systems with a capacity of over 70 Giga Watts in 2006 and has a long term goal of 210 Giga Watts to be developed by the year 2020. Israel and Cypress are the per capita leaders in the use of solar hot water systems with over 90% of homes using them. As of 2007, the total installed capacity of solar hot water systems in the World is approximately 154 giga watts.

A Solar thermal collector is intended to collect heat by absorbing sunlight. Although the term may be applied to simple solar hot water panels, it is usually used to denote more complex installations. There are various types of thermal collectors, such as solar parabolic, solar trough and solar towers. These type of collectors are generally used in solar power plants where solar heat is used to generate electricity by heating water. This produces steam and drives a turbine connected to an electrical generator.

The Solar thermal market in North America could reach over 100 million households and 200 million motel/hotel rooms, restaurants, fast food chains, laundries, dormitories and offices. This is the largest market section for solar energy applications in the world.

The solar water heating, solar space heating and solar air conditioning applications could reach every family and every business with an average return on investment in approximately five years.

Wind energy is a major source of power in over 70 countries across the world and is a key solution in the fight against climate change. Wind energy is helping meet America's increasing energy needs while protecting our Nation's energy security and environment, the U.S. Department of Energy's Wind and Water Power Program is working with wind industry partners to develop clean, domestic, innovative wind energy technologies that can compete with conventional fuel sources. Program efforts have culminated in some of industry's leading products today and have contributed to record-breaking industry growth.

The Wind and Water Power Program aims to research, test, and develop innovative technologies capable of generating renewable, environmentally responsible, and cost-effective electricity from water. These include marine and hydrokinetic technologies, which harness the energy from wave, tidal, current and ocean thermal resources, as well as technologies that improve the efficiency, flexibility, and environmental performance of conventional hydroelectric generation.

Biomass is a clean, renewable energy source that can help to significantly diversify transportation fuels in the United States. The Biomass Program is helping transform the nation's renewable and abundant biomass resources into cost-competitive, high-performance biofuels, bioproducts, and biopower.

Geothermal reservoirs of low-to moderate-temperature water — 68°F to 302°F (20°C to 150°C) — provide direct heat for residential, industrial, and commercial uses. This resource is widespread in the United States, and is used to heat homes and offices, commercial greenhouses, fish farms, food processing facilities, gold mining operations, and a variety of other applications. In addition, spent fluids from geothermal electric plants can be subsequently used for direct use applications in so-called "cascaded" operation.

Direct use of geothermal energy in homes and commercial operations is much less expensive than using traditional fuels. Savings can be as much as 80% over fossil fuels. Direct use is also very clean, producing only a small percentage (and in many cases none) of the air pollutants emitted by burning fossil fuels.

The US department of energy announced massive investment into the renewable energy industry including $60 billion in clean energy investments, which will include $11 billion in a smart grid system and $2 billion in developing the next generation of energy storage batteries. An announced move away from corn-based ethanol fuel and $1.8 billion investment in the next generation of biofuels will stimulate the vehicular fuel industry, towards a cleaner, more efficient system. The new administration has announced intention to develop available offshore renewable energy sources located on the continental shelf area. The area has vast potential and scientists estimate that 900GW of wind power may be achieved.

Although still primarily a conventional thermal based country, through incentivized support in renewable energy, a new energy market is beginning to evolve. Recent addition has been made to the energy mix by way of renewable energy technologies which include power from the wind – wind turbines, and power from the sun – solar cells, and geothermal – relying on the heat that can be found at varying degrees of depth into the Earth’s surface. In the last decade newly installed renewable energy technologies are starting to gain a notable share of the market.

Money is pouring into renewable energy and it's a global trend. The United Nations reported that $100 billion went into renewable energy and efficiency technologies in 2007 and 2008.

The money is coming from stock markets, venture capital investments and private individuals. Publicly traded renewable energy stocks rose more than 60 percent during the first and second quarter of 2008, creating even more investor interest.

Among the different types of renewable energy, wind is most popular with investors. It's followed by solar and biofuels. The main reasons for the increase in renewable investments are concerns over our climate change along with the high petroleum prices.