U.S. DEPARTMENT OF E NERGY



# Revolution Now

The Future Arrives for Four Clean Energy Technologies

– 2014 Update

October 2014Gaining Force

................................ ................................ ................................ ................................ ................ 1

Land

- Based Wind Power

................................ ................................ ................................ ............................... 2
Wind deployments on a steep upward climb

................................ ................................ ........................... 2
Skyrocketing demand, downward trending prices

................................ ................................ ................... 3

The future of wind

................................ ................................ ................................ ................................ .... 3

Solar Photovoltaic Power

................................ ................................ ................................ .............................. 5

A dr amatic shift

................................ ................................ ................................ ................................ ......... 5
99% cheaper

................................ ................................ ................................ ................................ .............. 5
A bright future

................................ ................................ ................................ ................................ ........... 6
LED Lighting

................................ ................................ ................................ ................................ ................... 7
More choice, lower cost

................................ ................................ ................................ ........................... 8

A soli d investment

................................ ................................ ................................ ................................ .... 8

Electric Vehicles

................................ ................................ ................................ ................................ ............ 9
Accelerating deployment

................................ ................................ ................................ .......................... 9

A race to the clouds

................................ ................................ ................................ ................................ .. 9

Road to the future

................................ ................................ ................................ ................................ ... 10

Conclusion

................................ ................................ ................................ ................................ ................... 12Contributors

James Brodrick, DOE Building Technology Office Austin Brown, DOE National Renewable Energy Laboratory David Feldman, DOE National Renewable Energy Laboratory Eric Lantz, DOE National Renewable Energy Laboratory Sarah La Monaca, DOE Office of Energy Efficiency & Renewable Energy
Levi Tilleman

- Dick, DOE Office of Energy Policy & Systems Analysis Rich Tusing

, DOE Wind Technology Office Jacob Ward, DOE Vehicles Technology Office Ryan Wiser, DOE Lawrence Berkeley National Laboratory1



## Gaining F orce For decades, America has anticipated the transformational impact of clean energy technologies

. But

even as costs fell and technolog ies matured
, a clean energy revolution always seemed just out of reach

. Critics often said a clean energy future would “always be five years away.”

In 2013, the DOE released a report called R evolution Now highlight ing four transformational technolog ies that are here today : o nshore wind power , p olysilicon photovoltaic (PV) modules
, light

emitting diodes (LEDs)
, and e lectric vehicles (EVs)

. That study showed how dramatic reduction s in cost 1

are driving a surge in consumer, industrial
, and commercial adoption for these clean energy technologies

. This report provides an update and finds that cost reductions and deployment have continued to advance in the past year.

T he se technologies are changing the nature of our energy system. Solar and wind power are attracting new participants to the energy sector, including household names like Google, Apple and MetLife. LED lighting has em erged as a powerful market competitor to traditional, inefficient incandescent bulbs and
EVs are remaking the global automotive economy

. Today, c lean energy technologies are providing real

- world solutions for reducing emissions of the harmful carbon pollution that causes climate change . Clean energy manufacturing and installation has also become a major opportunity for America n workers in the 21 st century

. In 2014, m arket data assembled by the U.S. Department of Energy show s that the hi storic shift to a cleaner
, more domestic and more secure energy future is not some far

- away goal. We are living it, and it is gaining force.

1 The levelized cost of energy (LCOE) is used as a convenient summary measure of the overall competiveness of different generating technologies. It represents the cost (in real dollars) per kilowatt hour of building and operating a generating plant over an assumed financial life and duty cycle. Key in puts to calculating levelized costs include capital costs, fuel costs, fixed and variable operations and maintenance (O&M) costs, financing costs, and an assumed utilization rate for each plant type. As with any projection, there is uncertainty about all o f these factors and their values can vary regionally and across time as technologies evolve and fuel prices change. See the Energy Information Administration’s Annual Energy Outlook 201 4 for a deeper discussion regarding these issues: http://www.eia.gov/fo recasts/aeo/electricity_generation.cfm2



## Land

- Based Wind Power



## U.S. Deployment & Cost for Land

- Based Wind

1980

- 2013

Wind deployments on a steep upward climb 2
Today, deployed wind power in the United States has the equivalent generation capacity of about 60 large nuclear reactors. 3 Wind is the first non

- hydro renewable energy source to begin to approach the same scale as conventional energy forms like co al, gas and nuclear.

2 Bolinger, Mark; Wiser, Ryan. MEMORANDUM

- Documentation of a Historical LCOE Curve for Wind in Good to Excellent Wind Resource Sites ; Lawrence Berkeley National Laboratory, June 11, 2012. UPDATED February 10th, 2014. Bloomberg New Energy Finance power plant database (1980

- 1994) and American Wind Energy Association wind industry database (1994

- 201 3 ).
3 This number refers to “nameplate capacity” which represents the peak generation capacity of a n electric generator ( wind turbine , solar panel, nuclear plant, etc

. ) While no electric generator generates up to its capacity 100% of the year

– even generators with very high capacity factors, like nuclear energy, top out at an average capacity factor of around 90%

– variab le generation resources tend to produce a t a lower capacity factor than nuclear generators (average for onshore wind turbines in the US from 2006

- 2013 was 32 %). For more information on capacity factors, s ee the Energy Information Administration’s Annual Energy Outlook 2014: http://www.eia.gov/forecasts/aeo/electricity_generation.cfm3

This success has been decades in the making

– with both government and private

- sector R&D dollars propelling its progress. W ind turbines have gotten progressively larger in terms of generation capacity over the past 30 years and this has helped to drive down costs. In fact, since the 1998

- 1999 period, the average electric generat ing capacity of a single turbine has increased by about 162%

. 4 Today’s wind turbines are taller and have longer blades , which allow them to operate in lower wi nd conditions and to access stronger, more consistent winds . In the U.S., t he average hub height of a new wind turbine in
2013 was 45% taller than in 1998

- 1999 and the a verage rotor diameter was 103% greater

– which translates to a 310% increase in the bla des’ swept area. 5 The emergence of larger, more cost

- effective turbines was enabled by industry efforts in technology advancement, as well as by considerable
investments by DOE , which worked with partners in industry and national laboratories to execute cr itical R&D in turbine design and performance.

It is also worth noting that, a s with many industries, increases in scale of production have helped to drive down the cost of wind energy

. Efficiencies and cost

- savings through scale

- up have been further enabl ed by the federal Production Tax Credit ( PTC ), which , for wind turbines under construction before December 31, 2013, pays an additional 2.3¢ per kilowatt hour for the electricity produced over the first 10 years of operation . The PTC has been critically important to incentivizing deployment of wind energy.


### Skyrocketing demand, downward trending prices Since the beginning of 2008, wind power capacity has more than tripled in the U.S. This success has led to new challenges for wind developers. For instance, it has become more difficult to find windy terrain near large power lines on which to build new wind farms. But at the same time, there have been dramatic improvements in technology and operations

. 6

Such improvements have kept wind prices on a long

- term downward trend. Leading up to 2009, there was a rise in the price of power purchase agreements (PPAs) for new wind farms

– it ticked up to about $70/MWh . However, in 2013 the national average levelized price of new wind PPAs fell to a record low of around $25/MWh. 7 From 2009

- 2013 wind represented approximately 30% of new electrical generation in the U.S. 8



### The future of wind
Wind continues to be one of America’s best choices for low

- cost, zero carbon, zero pollution renewable

energy , and in an increasing num ber of markets may be the cheapest source of new energy available

. The combined potential of land

- based and off

- shore wind is about 49,700 TWh 9

– or about 10 times U.S. electricity consumption today . And wind is 100% renewable, so it won’t ever run out

. The industry is working both to build new power transmission lines from some of the windiest parts of the country to

4 U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. 201 3 Wind Technologies Report ; U.S. Department of Energy, 201 4

. 5 Ibid
6 Ibid
7 Ibid
8 U .S. Federal Energy Regulatory Commission (FERC) Office of Energy Projects Energy Infrastructure Updates
9 U.S. Renewable Energy Technical Potentials: A GIS

- Based Analysis Anthony Lopez, Billy Roberts, Donna Heimiller, Nate Blair, and Gian Porro http://www.nrel.gov/docs/fy12osti/51946.pdf4

more densely populated areas and to improve turbines for less windy areas in order to maintain aggressive growth in the sector. This also includes building “marine” wind farms offshore

– where steady , strong ocean breezes contain vast wind power potential. With continued technology improvement s and policy support
, the Department of Energy estimates that as much as 20% of projected U.S. elect ricity demand could be met by wind power by 2030. 10

10 U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy. 20% Wind Energy by 2030: Increasing Wind Energy’s Contribution to U.S. Electricity Supply , July 20085



## Solar Photovoltaic Power



## U.S. Deployment and Cost for Solar PV Modules

2008

- 201 3

A dramatic shift Although the energy potential of the sun is, for practical purposes, limitless, the cost of converting that energy into usable electricity has traditionally kept solar PV out of reach for all but a few niche applications

– such as powering cell phone towers in remote terrain, warning beacons on offshore oil rigs
, and on satellites and spacecraft

. But t oday we are in the midst of a dramatic shift to solar energy

. The dramatic decline in the price of solar PV modules mean s that the infinite power of the sun is increasingly within reach for the average American homeowner or business

. Today, solar PV is rapidly approaching cost parity with traditional electrical generation from natural gas and coal in many parts of the world , including parts of the U.S.


### 99% cheaper By 2014 , r ooftop solar panels cost about 1 % of what they did 3 5 years a go, 11 and solar PV installations

were about 15 times what they were in 2008

. 12 Between 2008 and 2014 t he cost for a PV module declined from $3.40/watt to about $0. 7 9 /watt

. 13 While in 2012, price declines were partially driven by

11 Mints, Paula. “Photovoltaic M anufacturer Shipments: Capacity, Price & Revenues 2013/2014.” SPV Market Research. April, 2014
12 SEIA and GTM Research. (2014). “U.S. Solar Market Insight Report: 2013 Year

- In

- Review.” March 2014.
13 Mints, Paula. “Photovoltaic Manufacturer Shipments: Capaci ty, Price & Revenues 2013/2014.” SPV Market Research. April, 2014. (2014) Bloomberg New Energy Finance. Solar Spot Price Index. Accessed July 7, 2014.6

oversupply and many manufactur ers had razor thin

– or negative

– margins , i n 2014 the glut is mostly past and still prices remain low due to reductions in manufacturing costs.

T his is part of a broader trend. Historically, a doubling in industry capacity for solar PV manufacturing has correlated with a bout a 20% decline in PV prices. A s more and more solar panels are built and deployed, costs have fallen

. The federal Investment Tax Credit, equal to 30% the cost of rooftop PV systems , has helped this process along , as has DOE’s $3.7 bi llion investment in solar photovoltaic R&D from 1975 to 2008, which has resulted in a net economic benefit of $15 billion. 14 Indeed, federal government investment in R&D for solar PV accelerated solar industry progress by an estimated 12

years. 15 Local incen tives for PV deployment in the U.S.

– as well as the E.U., Japa n, China and other
countries

– have also helped to push solar manufacturing down th e cost curve.

F alling costs have led to a surge in residential, commercial and utility

- scale (>100MW ) deployments. The DOE’s L oan Program s Office kick

- started the utility

- scale solar industry by financ ing the first five utility

scale solar PV projects in the U.S with more than 1500 megawatts (MW) of capacity

. Today utility

- scale solar is being financed by the private sector : a s of s ummer 2014, there were 17 privately financed utility

scale solar PV projects , representin g more than 3800 MW of capacity, either built or under construction.


### A bright future The cost of installing a solar PV system includes not only the price of the PV module, but permitting and installation costs as well

– what the industry calls “soft costs.” As the cost of PV modules has come down
, some of the best opportunities to bring down the price of solar energy are now reductions in the se “soft costs.” I n 2012
, the soft costs for installing a rooftop solar panel in the U.S. we re about f ive times higher than in Germany ($ 3

. 34 per watt in the U.S. vs. $0. 62 per watt in Germany) 16

, indicating huge potential to reduce these costs in the U.S.

New technologies, government policies and business models are supporting the solar industry’s rise. As a result, Americans are increasingly turning to the power of the sun, which allows them the security of generating their own
, low

- cost , electricity.

Represents average Chinese multi

- crystalline module for first 6 months of 2014. Inflation adjustment: "C onsumer Price Index

- All Urban Consumers" from the Bureau of Labor Statistics

. Note: b eyond module costs, PV system costs generally include other hardware costs such as inverters, racking, and wiring, as well as process and business soft costs including c ustomer acquisition, permitting, inspection and interconnection, financing and contracting, supply chain, and margin.
14 “Retrospective Benefit

- Cost Evaluation of DOE Investment in Photovoltaic Energy Systems.” DOE, August 2010. http://www1.eere.energy.gov/analysis/pdfs/solar_pv.pdf . In 2008 dollars.
15 Ibid.
16 Seel, J.; Barbose, G. ; Wiser, R. (2012 ). Why Are Residential PV Prices in Germany So Much Lower Than in the United States?

; Berkeley, CA
, Lawrence Berkeley National Laboratory
, September 2012.7



## LED Lighting



## U.S. Deployment and Cost for A

- Type LED Lights

2008

- 201 3

Plenty of light, but not much heat

The argument for Light Emitting Diode (LED) lighting is easy to make: they provide plenty of light, but not much heat. An incandescent light bulb generates light exactly the same way Edison’s bulb did 100 years ago: it heats a tungsten filament until it ge ts blazing hot

— in excess of 400 ° F 17

— and that process produces light. However, about 90% of the energy used by an incandescent bulb is actually transformed into heat rather than visible light

– which is why you can burn your fingers when changing a light b ulb. In terms of energy use, the light we enjoy from incandescent bulbs is really a byproduct.

LED lighting flips this equation on its head

. A standard 60 watt incandescent light bulb can be replaced by a ~9 watt LED light that is 84% more efficient whil e emitting the same amount of light

. 18 And although LEDs cost more up front, they also last as much as 25 times longer (1,000 hours vs. 25,000

17 Lindgard, RD; Myer, MA; Paget, ML. Performance of Incandescent A

- Type and Decorative Lamps and LED Replacements

; Pacific Northwest Laboratory, November 2008.
18 For one example, see the Cree Day Light 60

- Watt Replacement, http://www.cree.com/lighting/landing

page/~/media/Files/Cree/Lighting/Lamps/Bulb /CreeBulbDataSheet.pdf8

hours). 19 Because of this, a mother who installs a quality LED fixture when her child is born may not need to chang e it until that child goes to college

– or even graduates. Over that period, she could save over $160 for every incandescent bulb she swaps for an LED. 20

For many commercial facilities, the advantages go bey ond energy saved. Changing hard

- to

- reach light bu lbs is a hassle, and can even be dangerous. LED lighting solves this problem in a sleek, elegant, efficient package.


### More choice, lower cost Over the past five years, price reductions in LED bulbs have transformed the economics of the industry. Until recen tly, installing LED lighting didn’t seem like such a bright idea for normal home lighting. They

were not generally powerful enough to replace a standard light bulb and even in 2012 cost as much as $50 apiece. At that price, LEDs seemed destined to remain a distinctly niche product. But today’s LEDs are brighter, have better color quality, improved dimming capabilities
, and can be purchased for less than $10 at the local hardware store. This is making LEDs an increasingly popular choice for Americans who wan t to reduce their lighting bills or simply don’t want to deal with changing bulbs so often.

In 2009, fewer than 400,000 LED lights were deployed as replacements for standard household light bulbs across the U.S. But by the end of 2013, deployment had grow n nearly 90 times to 34 million

– almost all of these in applications that would have once utilized energy

- intensive incandescent bulbs. By
2013 LED s accounted for about 5% of lighting sales and 1% of total lighting installed nationally . This represents a significant foothold in the U.S. lighting market , but also an enormous opportunity for growth.



### A solid investment For more than a decade, the Energy Department has funded research and development of LED lighting. During the American Recovery and Reinvest ment Act, the Department of Energy also made significant investments in manufacturing to help bring down the price of LEDs.

Today, America is beginning to reap the rewards of these years of investment. According to DOE projections, by 2030, LED lighting will save Americans over $30 billion a year in electricity costs and cut America’s energy consumption for lighting in half. LEDs are a bright spot in America’s effort to reduce carbon pollution, lower energy bills and provide a more s ecure energy future for America. 21

19 For more information see the web site for the U.S. Department of Energy L

- Prize http://www.lightingprize.org/about_ssl.stm

20 Based on usage of 2 hours per day and a national electricity cost of 12.84 cents per kilowatt hour and a purchase price of $10 for LED lamp and $0.50 for incandescent

21 U.S. Department of Energy, Energy Efficiency and Renewable Energy. Energy Savings Potential of Solid

- State Lighting in General Illumina tion Applications

. U.S. Department of Energy Solid

- State Lighting Program, January 2012. Available at: http://apps1.eere.energy.gov/buildings/publications/pdfs/ssl/ssl2012_energysavings_factsheet.pdf9



## E lectric V ehicles 

## U.S. Deployment and Cost for Electric Vehicles and Batteries
2008

- 201 3

Accelerating deployment In 2013, Americans bought nearly 100,000 plug

- in electric vehicles (EVs)

– nearly double th e number purchased in 2012

– a nd in the first half of 2014, EV sales continued to expand at a rate of about 30%

year

- on

- year. This success is the direct outgrowth of combined federal, state and industry efforts to bring down the cost of EVs through research and dev elopment of better batteries
, pro mot e consumer adoption through tax and other incentives
, and support public and private investments in a new American manufacturing economy

.


### A race to the clouds Before 2010, U.S. EV demand was almost nothing. But today EVs are helping America achieve its energy and climate goals and positioning its manufacturing economy to remain globally competitive in the 21 st
century.

To maintain this momentum t he most critical area for cost reductions is batteries. DOE models f or EV battery fabrication costs show that the cost of high volume EV batter ies has fallen by an astounding 68 %10

since 2008

. 22 While a ctual battery production costs are closely held by industry, prices in commercial EVs also appear to be on a steady downward glide. These cost reductions can be attributed to a number of factors. So

- called “process improvements”

– which increase the efficiency of manufacturing by eliminating wasted materials, capital and time

– are one key element

. So is higher production volume

– whi ch help s amortize capital costs for expensive facilities, assembly lines and robots used to build batteries. Finally, automakers are integrating new materials into EV batterie s that both reduce cost and
increase energy

- density

– the amount of energy that ca n be stored in a battery. Today
, batteries are receiving an enormous amount of attention from universities, research labs, industry
, and government because of their critical role in enabling EVs and other clean energy technologies , which should continue

to drive down costs and improve performance

.


### Road to the future In many senses, EVs are already competitive with traditional cars. For instance, for three years in a row the Chevy Volt topped JD Power’s APEAL Study on consumer satisfaction for compact sedans

. In 2013
, Consumer Reports said the Tesla Model S was the best car they had ever tested and Tesla is now exporting American cars to markets around the world

. 23 Compared to gasoline, fueling EV s is also cheap

. The Energy Department calls this an “eGallon,” and today an eGallon

– the amount of electricity it takes to drive an EV the same distanc e a standard car can travel on one gallon of unleaded gasoline

– costs only about $1. 2 7

. 24 This is in large part because electric motors are ab out three times as efficient as combustion engines.

F urther progress on reducing the cost of EV batteries will make these benefits available to a larger audience

. Some private sector analysts have said that there is a relatively clear technology path to $2 00 /kW h for battery storage by 2020 , down from about $1,000 kWh

. 25 The Department is working with industry, academia and our own labs toward an even more aggressive goal of $125/kwh by 2022. At that point, ownership costs for a 24 0

- mile EV will be equal to a standard vehicle. 26

Improved charging infrastructure will also be c ritical to maintaining momentum

. T here are now over 18,000 EV charging stations in the U.S., but lack of street charging in America’s cities remains a challenge to urban deployment , espe cially when many residents lack off

- street parking at home . Workplace charging, new EV

- friendly municipal codes for public and private parking facilities and an expanding network of so

- called “fast chargers”

– which can charge an EV much quicker than stand ard chargers

– can all help create a more EV

- friendly environment and drive continued success

.

22 Modeled costs are validated through applied research, and represent calculated high

- volume commercial production costs, rather than market price.
23 The Tesla Model S is our top

- scoring car, Consumer Reports, May, 2013
24 U.S. avera ge, accessed September 29 , 2014, http://energy.gov/maps/egallon

. 25 Hensley, Russell; Newmanm, John; Rogers, Matt. Battery Technology Charges Ahead; McKinsey Quarterly, July 2012.
26 C ost estimates reflect production of batteries at sc ale and with mature manufacturing processes

. For more information see the Department of Energy’s EV Everywhere Blueprint
, http://www1.eere.energy.gov/vehiclesa ndfuels/electric_vehicles/10_year_goal.html11

International a utomakers are competing aggressively to design and deploy the electric car of the future. But today America has the largest EV market in the worl d , as more and more Americans are abandoning the gas pump and fuel ing their cars on this cheap, clean, secure, American energy.12



## Conclusion
As these and other clean energy industries continue to expand, so will the challenges and opportunities associated with transforming America’ energy sector. Already u tilities are beginning to wonder how they will support their current business model s in the face of increased energy efficiency and cheap rooftop solar power . As EVs move beyond the market for “first adopters” and become mainstream, America will have to invest in building a more extensive network of EV charging stations.

Despite these challenges, e lectric vehicles, solar PV, wind power and LED lighting are all on track to transform our economy for the better. They will clean up the air in our cities, reduce America’s vulnerability to unstable international oil markets and help build an economy that is more competitive and more efficient , all while reducing carbon pollution

.

T he Energy Departme nt’s goal is to encourage these trends by providing performance targets, support for R&D
, consumer education
, and targeted deployment assistance

. With continued progress in critical renewable and energy efficient technologies like these, we can look forwar d to a future of clean, green,
American

- made energy. F or some of these innovative technologies, that future is here today

.