From the Editor

If renewables didn’t have policy support, there wouldn’t be much of a market, so the saying goes. You only need to glance at Paula Mints’ most recent report showing how the spread of the European Feed-in Tariff (FIT) caused a spike in development activity to realize how policies manipulate markets.

I wonder however, if that is changing as more and more corporations get into the space. Major players like Amazon, Google and others are signing PPAs left and right. Our story on corporate PPAs gives more insight into how these mechanisms work.

One reason that corporations are interested in PPAs is because of economics. When Chief Financial Officers (CFOs) run the numbers they realize that locking in electricity rates for the next 10, 15, 20 years makes a lot of sense. Policy is a factor here because it is tax credits or other incentives that help make PPA economics look so attractive.

But a second equally important reason is not driven by policy: public support. A recent Strom Report shows that in major industrialized countries, renewables have approval ratings above 80 percent.

This uptick in corporate PPAs can be attributed to policy and public support. The CFO wants the electricity rate-lock, the sustainability officer wants to reduce the carbon footprint of the organization, and the marketing group wants renewables because they are viewed so favorably by the public. If technology costs keep dropping and public support of renewable energy keeps growing, that means that policy could eventually step out of the picture with no detriment to the growth of renewable energy.

Play the video letter from the editor at this link for more on this topic.

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From the Editor

Even as the price of oil tumbles, renewables are making progress all over the world. In fact, as our Last Word explains, a true “decoupling” of oil prices and renewable energy prices has taken place, particularly with regard to returns on renewable energy projects in the developing world. Today, we are seeing an equal amount of investment dollars going to projects in the developing world as we are seeing investments being made on projects in the developed world. That’s a first.

The de-centralized nature of renewable energy means that small villages and rural areas in very remote locations can leapfrog the grid, becoming energized with solar microgrid technology. Further, innovative “pay-as-you-go” type business models are proving that bringing green energy to the developing world is no longer a charitable endeavor. There is real money to be made in this work.

Finally, Bloomberg New Energy Finance shows us that globally the amount of new clean energy capacity installed in 2014 was greater than the amount of new fossil-powered energy capacity – a trend that the firm expects will continue as we move forward.

In conversations that I have with those working in the fossil industry, I get the sense that statistics like these often make them feel defensive about the work they are doing and fearful about the future of their careers. It is important for us all to keep in mind that it took more than 100 years to get to this point in our energy evolution and a full transition to clean energy will likely take an equally long time. It’s a mighty long see-saw but the tipping point may very well be here.

Jennifer Runyon, Chief Editor