In a divided renewable landscape, the solar market thrived in 2023, while wind encountered significant obstacles. The wind and solar sectors experienced the weight of project inputs, labor and capital cost pressures, as well as delays in interconnection and permitting, along with limitations in transmission. On the other hand, supply chain limitations began to ease as impactful clean energy and climate laws were implemented.
The convergence of federal investments in clean energy and the growing demand for decarbonization from both public and private sectors has reached unprecedented levels. As we enter 2024, these powerful drivers have the potential to overcome the obstacles that arise from the transformative changes required to meet our country's climate goals. The upcoming year promises a variable-speed takeoff for renewable technologies, industries, and markets, with a careful balance of progress and challenges. In this guide, we will examine the key milestones achieved in renewable energy production during 2023 and present insightful predictions for the year ahead in 2024.
2024 Renewable Energy Development Growth
The collective efforts of federal agencies, industry leaders, and passionate advocates have set the stage for transformative change in the renewable energy sector in 2024.
The IIJA and the IRA have boosted renewables through historic investment in new or expanded programs, grants, and tax credits to accelerate the deployment of established and emerging renewable technologies. Over the past two years, they helped catalyze $227 billion of announced public and private investments in utility-scale solar, storage, wind, and hydrogen. As a result of the IIJA and the IRA, The Energy Information Administration expects renewable deployment to continue to grow by 17% to 42 GW in 2024 and account for almost a quarter of electricity generation.
The IIJA and IRA have had some of the most significant impacts on solar and storage. For example, solar investment in the U.S. in 2023 increased 75% from 2022. The Energy Information Administration expects solar power to continue to be the leading source of growth in electricity generation in both 2024 and 2025 as 36 gigawatts (GW) and 43 GW of new solar capacity come on line, respectively. The new capacity will boost the solar share of total generation to 6% in 2024 and 7% in 2025, up from 4% in 2023.
According to Deloitte, twenty-nine jurisdictions, representing approximately half of US electricity retail sales, have implemented mandatory renewable portfolio standards. Additionally, 24 jurisdictions, including two new states in 2023, have set ambitious goals of achieving zero greenhouse gas (GHG) emissions or 100% renewable energy by 2030 through 2050. These renewable portfolio standards and clean energy standard policies are projected to necessitate an additional 300 terawatt hours (TWh) of clean electricity by 2030.
Moreover, 56 individual utilities and 28 parent utilities, serving a staggering 83% of US customer accounts, have committed to carbon reduction targets. Notably, 25 utilities have gone a step further, pledging to achieve either an 80% reduction in carbon emissions or an 80% share of clean generation by 2030. Anticipated to stimulate increased investments in renewables, the IRA's direct pay and transferability tools will facilitate broader market participation for more states, localities, and public utilities in 2024.
To reach these goals, it is becoming more clear that public land will need to be utilized for renewable energy purposes. The Bureau of Land Management (BLM) has recently announced a proposed update to its renewable energy regulations. The aim is to encourage the development of solar and wind energy on public lands. This proposed Renewable Energy Rule seeks to reduce fees nationwide and streamline the process for development in priority areas. These efforts align with the Biden-Harris administration's ambitious goals of permitting 25 gigawatts of clean energy on public lands by 2025 and transitioning to 100 percent carbon-free electricity by 2035.
Government agencies can analyze the renewable energy potential of their properties and list their land for lease for free using LandGate's platform.
2024 Renewable Energy Development Challenges
Despite these positive developments, the renewable energy industry still faces several challenges. From the need for continued investment in research and development to address technological limitations, to the importance of scaling up renewable energy infrastructure to meet global energy demands, there are hurdles that need to be overcome.
One of the main obstacles is the process of interconnection and permitting for new projects. This has been a long-standing issue that can delay or even prevent renewable energy projects from being built. However, with the growing demand for decarbonization and investments in clean energy, there is an opportunity to improve and streamline this process in 2024. The IIJA and the IRA have allocated significant funds for grid modernization, which could help alleviate these challenges. These include the DOE’s announced plans to accelerate high-voltage transmission line permitting, $3.9 billion in grants from the Grid Resilience and Innovation Partnerships Program, and $1.3 billion in grants for three interregional grid projects.
Another challenge facing the renewable energy industry is the supply chain limitations, particularly in key components such as solar panels and wind turbines. These supply chain issues can delay projects, increase costs, and ultimately slow down the growth of the industry. However, with increased federal investments and support for domestic manufacturing, there is potential for these supply chain challenges to be alleviated in 2024.
Labor and Capital Costs
The increase in labor and capital costs can also pose challenges for renewable energy projects. The rising cost of materials, such as steel and copper, along with labor shortages due to the pandemic, can significantly impact project budgets and timelines. Similarly, sustaining the growth of renewable energy will require expanding and (re)training a workforce with the right skills. With a renewed focus on job creation and training in the renewable energy sector, there is potential for these challenges to be addressed in 2024.
As we look ahead to 2024, the renewable energy industry is poised for significant growth and progress. The overall federal investments through the IIJA and IRA have provided a boost to the industry, and with continued efforts to decarbonize and increase renewable energy generation, we can expect to see more advancements in the coming years.
LandGate's suite of PowerTools helps renewable energy developers plan and manage projects seamlessly, while our marketplace allows them to connect with interested private and public landowners who have listed their land for lease. To learn the renewable energy potential of your property, generate your free property report on LandGate's map today: