Analysts at the U.S. Energy Department's National Renewable Energy Laboratory (NREL) are providing a method for measuring the economic potential of renewable energy across the United States. They say that at 2014 costs, renewable energy technologies combine for 820 terawatt-hours of estimated economic potential beyond the generation from renewable energy facilities already in operation. This additional potential equals nearly 20% of total U.S. annual electricity generation from all sources in 2014.

Philipp Beiter, NRELThe NREL study applying this new method finds that renewable energy generation is economically viable in many parts of the United States largely due to rapidly declining technology costs. The report, Estimating Renewable Energy Economic Potential in the United States: Methodology and Initial Results, describes a geospatial analysis method used to estimate the economic potential of several renewable resources. Economic potential is a metric that quantifies the amount of economically viable renewable generation that is available at a specific location. Analysis to date includes photovoltaics (PV), wind, geothermal, biomass and hydropower resources.

"This report presents one method for estimating economic potential," says NREL Energy Analyst Philipp Beiter.

Looking at the potential at developable sites, the report found that when the social cost of carbon is taken into account, renewable generation is economically viable in many parts of the country.

"Declining renewable technology costs are a significant driver for these results," Beiter says. "Economic potential has more than tripled as a result of cost reductions already realized for renewable generation technologies between 2010 and 2014, particularly for wind and solar PV."

The study also finds that projected future renewable energy cost reductions yield further increases. At 2020 projected costs, economic potential equals almost half of U.S. annual generation; in 2030, further cost reductions result in over 75% of generation, showing the "significant impact" that could be realized through continued research, development and deployment that drive down renewable energy costs.

NREL says that economic potential differs from other projections of renewable energy deployment in that it does not directly consider market dynamics, customer demand, exports from one location to another, or most policy drivers that may incentivize renewable energy generation. The methodology represents a first-level screening that identifies where renewable energy can be cost-competitive. As technology costs and other relevant factors change, NREL says that economic potential may be a useful metric to assess the evolving role of renewable generation in the energy landscape.