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Next page: 4 more myths >> By Peter Gardett
Managing Editor, AOL Energy
Accounting firm Ernst & Young is accustomed to crunching data from a wide range of sources and sorting it into manageable categories. The company has taken an increasing thought-leadership profile in energy, and recently released an update to its substantial renewable energy attractiveness indices as part of that practice. The surprisingly-bullish report includes scores for state renewable energy markets, renewable energy infrastructure and their suitability for individual technologies. The indices provide scores out of 100 and are typically updated on a biannual basis. In discussing the report, the indices and the results this year that placed California at the top of the heap had some surprising breakouts. Ernst & Young LLP Senior Manager, National Tax Michael Bernier dispelled some of the most entrenched myths in the renewable energy business. Myth 1: The renewable energy industry is facing an unprecedented challenge in the end of the production tax credit (PTC) at the end of this year.
Myth 2: Wind energy will still lead growth in renewable energy. Bernier says it is actually solar energy that will attract the most growth in the renewable sector over the next three to five years, and that resulted in a much heavier weighting for solar in the accounting firm's renewable energy attractiveness report. The solar industry is "clicking on all cylinders," Bernier said, with an attractive environment for large-scale utility projects, domestic-scale home solar panels and medium-scale distributed generation solar. To hear a podcast with a celebrity distributed generation solar distributor (yes, really) on AOL Energy, click here. Myth 3: Geography and weather are the determining factor in how appealing a market is for renewable energy. People oversimplify when they talk about solar, Bernier said, presuming that projects cannot be profitable or contribute when they are outside of sunny areas. In fact there are about 10 different factors in determining the success of a solar energy installation, he said, including the cost of the power a unit of solar energy is replacing. In Boston, Massachusetts, although sun is comparatively rare, power prices are high enough that even intermittent solar when combined with incentives can make a project attractive. Myth 4: Natural gas and renewables are always competitors. Low natural gas prices are not the end of the world for renewable energy, says Bernier. While natural gas generation currently sets the marginal price for electricity, the price of renewable energy generation is falling fast enough to compete with other forms of generation, even natural gas. "High power prices would help expedite the adoption of renewables, but renewables can already compete in many markets," Bernier said. Discuss the interaction of power prices and natural gas markets on AOL Energy here. Next page: 4 more myths >>
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