The Winds Are Changing for Renewable Energy

Red states won’t abandon their resistance to renewable mandates, but over time, the growing economic dynamism of solar and wind energy could compel a more balanced approach.

Peter Dejong / AP

In the policy arena, the distance is widening between blue and red states over whether to promote, or resist, the shift away from fossil fuels toward renewable energy sources like solar and wind. But the economics of generating electricity from alternative sources are growing more attractive for states across the political divide. The pivotal, and unresolved, question is whether the political divergence or economic convergence will more heavily shape the next stages of the fractious debate over climate change and the nation’s energy mix.

Starting with Iowa in 1983, 29 states have required utilities to generate a fixed share of their power from renewable sources. Initially, these renewable portfolio standards found favor in states throughout the political spectrum.

But as on almost every other major domestic issue, red and blue states are now separating. In recent years, West Virginia, Kansas, and Ohio each repealed or suspended renewable-power requirements. Four other states with Republican-controlled legislatures (and in three cases, with Republican governors) chose not to extend earlier renewable requirements when utilities met the initial state goals in 2015.

Even more emphatically, 26 states, almost all of them Republican-led, sued to block federal Environmental Protection Agency regulations requiring states to reduce emissions of greenhouse gases tied to global warming. Those EPA rules, under President Obama’s “Clean Power Plan,” would have encouraged utilities to shift more of their power generation from coal toward lower-carbon alternatives, including both natural gas and renewables. In February, the Supreme Court blocked the EPA from developing the plan while the courts consider the states’ lawsuit.

Blue states are hurtling in the opposite direction. Eighteen states (all of them carried twice by Obama) legally intervened last year to support the EPA regulation. Almost all of those states have also indicated they will continue planning to implement the EPA rule despite the court stay. Late last year, California and New York each established landmark requirements for their utilities to generate fully half of their power from renewable sources by 2030. Oregon joined them this year with a 50 percent renewables by 2042 mandate. Though smaller markets, Vermont (75 percent renewables by 2032) and Hawaii (100 percent by 2045) have set the bar even higher. Massachusetts may soon approve its own increase. “There is a strong trend toward strengthening renewable portfolio standards,” said Jocelyn Durkay, an energy specialist at the National Conference of State Legislatures. “But that’s not a universal trend.”

This political gulf is deep and durable. But the rapidly shifting economics of renewable energy may be transcending it. The price of electricity generated from solar and wind has steadily fallen, making it more cost-competitive with conventional fossil fuels. Falling cost has triggered a growth spurt for renewables. Solar and wind combined have accounted for at least half of the total new electrical generating capacity utilities have installed in three of the past four years; so far in 2016, those two sources represent virtually all of the newly installed capacity. Another milestone fell in March when, for the first time, renewable sources (excluding hydropower) accounted for 10 percent of all power generated in the U.S., according to federal statistics. Ten years ago, renewables accounted for less than 3 percent of all power generated.

Importantly, this surge in renewable energy has extended into red states. The 11 states with the most installed wind capacity include Texas, Oklahoma, Kansas, and North Dakota across the blustery Great Plains. And while California has installed nearly five times as much more solar capacity as any other state, such sun-splashed red and purple places as Texas, Arizona, and North Carolina also rank in the top 10 today, with Florida and Utah projected to join them by 2021.

When economics and state policy reinforce each other, the result can be, well, electric. California is the prime example. For decades, it has led the nation in establishing standards for increasing energy efficiency, utilizing renewable sources and reducing carbon emissions. Those policy signals have helped spur a dynamic clean-energy industry. “In California the bar is being set higher and then the venture capitalists and entrepreneurs work to achieve those new goals,” said F. Noel Perry, founder of Next 10, an independent San Francisco-based think-tank that recently released an annual survey of California’s clean-energy industry. That virtuous cycle has produced both environmental and economic breakthroughs: As Next 10 reported, California has reduced its carbon emissions per dollar of economic activity by nearly 40 percent since 1990 and simultaneously built a powerhouse green industry that has attracted two-thirds of all the nation’s clean-energy capital investment.

Red states aren’t likely to soon abandon their resistance to renewable mandates or federal initiatives to reduce carbon emissions. That’s partly for ideological reasons and also because many of them are either major fossil-fuel producers or rely on low-cost (but high-carbon) coal. Yet over time, the growing dynamism of solar and wind as economic engines in those same red states could compel a more balanced approach. “As the economics get better, as the business models prove themselves, as renewable energy industries become stronger and stronger in every state,” said Aliya Haq, who follows state climate and clean air policy at the Natural Resources Defense Council. “I just think the politics have to follow that.”