Renewable energy is an impressive technological advancement. The ability to turn plentiful, never-ending natural resources like wind and sunlight into energy and electricity is nothing short of amazing.
Environmental benefits often dominate conversations about renewable energy, and that makes sense. We only have one earth. It's up to all of us to make the right choices so future generations have the resources they need to thrive and flourish. Stopping climate change and reducing pollution are responsibilities we all share. And renewable energy has significant potential to help in achieving these goals.
But the benefits of renewable energy aren't limited to the environment. In fact, renewable energy makes a significant contribution to the local, national, and global economies. Currently responsible for $600+ billion per year, the renewable energy sector is projected to reach $1.1 trillion by 2027. Doubling the current market share of renewable energy by 2030 would raise the global gross domestic product by as much as 1.1% - approximately $1.3 trillion.
In this article, we'll dig deeper into the economic benefits of renewable energy.
How Renewable Energy Benefits the Economy
The International Energy Agency describes it well when they say that energy is the engine that propels economic activity. Virtually every product and service requires energy in order to be produced and distributed. In this way, energy is woven into the very fabric of our economy - and renewable energy is the golden thread.
Renewable energy is a monster job growth creator. More than three million people in the U.S. and 11 million people worldwide have jobs in renewable manufacturing, installation, engineering, sales, marketing, and more. And investing in renewables pays off. On average, renewable energy creates three times as many jobs as the same level of spending on fossil fuels.
One of the most attractive aspects of the jobs created by renewables is that they're distributed throughout the country wherever the sun shines and the wind blows. This is a stark contrast to fossil fuel jobs, which are primarily limited to a few specific resource-rich areas.
And it's an industry that's stable and growing. Wind turbine and solar panel installers are among the fastest-growing job titles. Solar jobs in particular grew by 148% between 2010 and 2020. Some estimates predict renewable energy could employ more than 24 million people by 2030.
Trade and Energy Independence
It's true that renewable energy can help the United States meet its energy needs domestically, reducing dependence on foreign oil and price fluctuations that accompany it. From an economic perspective, renewable energy is an investment with big impacts on a local level.
Every dollar spent on imported energy is a dollar lost from the local economy. Creating renewable energy domestically reduces the need to import fossil fuels from elsewhere in the world. And because renewable resources don't run out, we can count on that independence to last.
Compared to oil imported from across the world, renewable energy can be created, distributed, and used locally, helping to keep energy dollars at home. It's a significant opportunity to ensure dollars spent on energy stay local.
The IRENA report that examined the potential effects of doubling renewable energy production by 2030 found that it would result in a savings of over $104 billion annually in fossil fuel imports, while creating new import and export markets.
Better Investment for the Long-Term
Renewable energy generation costs have dropped dramatically in recent years and are projected to continue to drop. Creating energy from wind and sunlight is passive and doesn't depend on limited, finite resources. In fact, aside from the upfront capital construction expenses, the ongoing costs of renewable resources are limited to minimal operations and maintenance costs. This makes renewables a stable and predictable source of low-cost electricity.
Generates Income for Landowners
Renewable energy has emerged as a lucrative source of income for rural landowners and farmers. According to the American Wind Energy Association, land leases for wind farms in the U.S. generate $222 million every year for rural landowners.
And there's even been a push for the responsible development of renewable energy on the public lands we all own. Between 1982 and 2019, the U.S. saw the creation of 96 utility-scale solar, wind, and geothermal projects on public lands that generated $660 million for federal, state, and local governments. The construction of renewable energy projects on public lands has contributed over $13 billion to the economy since 1996. And those initiatives led to the creation of more than 12,000 construction jobs and 1,700 operational and maintenance-oriented positions.
Reduces Financial Implications of Climate Change
The effects of climate change are not limited to the environment. A report from the Universal Ecological Fund found that, over the last ten years, climate change has cost the U.S. economy around $240 billion every year.
And if climate change continues unchecked, it could cause the U.S. economy to shrink by up to 10% by the end of the century, according to scientists from federal agencies who wrote the Fourth National Climate Assessment.
Switching to renewables can slow climate change and reduce economic losses. Electricity generated by solar panels results in 96% fewer emissions than the same amount of electricity generated by coal.
Does Renewable Energy Have Benefits for Individuals?
It's worth mentioning that the economic benefits of renewable energy aren't limited to macroeconomic examples; individuals can experience financial benefits as well. One example is homeowners who install solar panels on their homes. If their setup meets all of their electricity needs, they might be able to reduce their bill to zero and possibly even upload and sell their excess electricity to the grid.
Another bonus is that renewable energy equipment can raise property values. For example, installing solar panels can return $20 for every dollar saved on energy bills. This can be an attractive and lucrative perk for energy-conscious homeowners who want to ensure they get the most out of their property when it's time to sell.
The Future Potential for Renewable Is Like Its Supply - Endless
The energy sector influences the entire economy and renewable energy is an opportunity to amplify that influence in a very positive way. As our energy needs continue to grow, deploying renewable energy will be an important part of not only meeting energy needs and doing what's best for the environment, but driving local and national economic activity while creating jobs.