Economics, Not Politics, Is Driving Renewable Energy Demand: Deloitte

Demand for renewable energy by consumers and businesses – along with a long-term commitment from utilities – seems to be fundamentally shifting energy attitudes and decisions, independent of federal stances, according to Deloitte's annual "Resources 2017 Study – Energy Management: Sustainability & Progress."

Technology advancements and cost declines have made renewable energy resources competitive with conventional energy, the report says. This gives consumers and businesses more clean energy options and pushes utilities to offer "smarter, high-tech offerings."

"The demand for clean energy has passed the point of no return. It is not only political anymore. It is an economic issue," says Marlene Motyka, U.S. and global renewable energy leader and principal, Deloitte Transactions and Business Analytics LLP. "Green energy no longer solely means environmental concerns, 'green energy' also means the dollars that can be saved by investing in wind, solar and other clean energy sources."

Key findings include:

• Sixty-three percent of residential consumers were very concerned about climate change and their personal carbon footprints. In fact, using clean energy sources was the most important energy issue among consumers, with 37% citing "increasing the use of solar power" (up 4% from 2016) as the top issue and 25% placing a priority on use of wind power (up 4% from 2016).

• Nearly 6 in 10 consumers cited the option to use renewable sources as a motivation to switch providers. Further, they stated that they are willing to pay a 4-8% surcharge on their electric bills for renewables, although the need for such surcharges has been declining.

• Millennials have been driving much of the support for renewables. Nearly two-thirds (64%) of millennials said they were extremely or very interested in installing solar panels, up 9% over last year, and more than half (53%) were extremely or very interested in purchasing a share in a community, or "shared," solar installation.

According to the study, energy storage could be the biggest potential game changer for renewable energy growth from consumers and businesses, as technology advances and costs decline.

• About half (48%) of business respondents said that they are working to procure more electricity from renewables. Of the 39% who are not working to procure more renewable electricity, 58% said that combining renewable energy sources with battery storage could motivate them to do more.

• Forty-five percent of residential consumers said they would be more interested in installing solar panels if they could combine them with a home battery storage unit.

Deloitte also reached out to more than 700 companies nationwide to conduct interviews with the energy decision-makers within the enterprise. These interviews showed changing business needs are driving a shift in energy priorities in the private sector.

• Eighty percent of businesses viewed reducing electricity costs as essential to maintaining an image that keeps them competitive. Business motivations for energy management have gone beyond cost cutting, with nearly half (45%) reporting it as a key part of corporate strategy and 9 in 10 investing about 21% of their total capital budgets in related programs.

• More than 8 in 10 agreed that their company's view of energy procurement is shifting from merely a cost to an opportunity for reducing risk, improving resilience and creating new value. Sixty-one percent said their customers are demanding their companies procure a certain percentage of their electricity demand from renewable resources.

The report also says that six in 10 businesses now have some form of on-site electricity generation, up from 35% five years ago. And 33% plan to increase the amount of electricity they self-generate.

Businesses that reported an increase in electric outages are taking matters into their own hands, with 26% reporting they intend to develop self-generation capabilities, while another 35% indicated they have considered implementing or participating in a microgrid.