U.S. Renewable Electricity Generation Nearly Doubles: 4 Picks
Zacks Investment Research | Apr 02, 2019 09:58PM ET
Per a recent report released by the U.S. Energy Information Administration (EIA), electricity generation from renewable sources has almost doubled in the last decade. The majority of the increase has been driven by wind and solar generation.
An Insight into EIA data
America witnessed a new record of 742 million megawatt-hours (MWh) of electricity generation from renewables in 2018, nearly double the 382 million MWh produced in 2008. It’s imperative to mention in this context that both wind and solar electricity generation capacity has hit a significant mark lately per the latest EIA data. While wind generation increased by a havoc 400% over the last decade, solar generation surged a whopping 4700%, thereby creating a new record.
Factors Driving Renewable Growth
Growth in U.S. renewable technologies, particularly in wind and solar, has been driven by favorable state policies and declining costs. As of 2018 end, 29 states and the District of Columbia (DC) had renewable portfolio standards (RPS). Such mandates imposed by the states compelled many utilities to shift their electricity generation portfolio toward renewables.
Moreover, corporate ventures in the clean energy space over the past few years have significantly bolstered the U.S. renewable industry. In keeping with this, the RE100 collaborative global initiative brought together some of the biggest U.S. companies from different sectors, with a target to source 100% of their electricity from renewable sources.
On the cost side, the levelized cost of electricity (LCOE) from solar photovoltaics (PV) decreased 69% between 2010 and 2016 while that of onshore wind fell 18% (per a report published by the International Renewable Energy Agency). As installation accelerates, the cost equation for renewables is expected to get much better, thereby attracting more investment in this space.
Our Picks
Trump’s coal favoritism, imposition of import tariff and the continued trade tiff with China had an adverse impact last year on the U.S. renewable industry, especially on solar stocks. However, considering the recent developments, these impediments should fade over time.
We have handpicked four investment worthy stocks from the Zacks Original post
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