Public support for renewable energy technologies has been part of U.S. energy policy for nearly 30 years. Yet these technologies have failed to emerge as a prominent component of the U.S. energy infrastructure. This failure has created the impression that renewable technologies have not met the goals and claims of proponents, and that therefore after several decades of support without success, it is time to pull the plug on renewables.

This study evaluates the performance of renewable technologies for electricity generation measured against stated projections that helped shape public policy goals over the last three decades, and we evaluate this performance against projections and trends in conventional electric power generation. We propose two measures for evaluation. One is performance relative to projections for the contribution of renewable technologies to total electricity generation. The second is their performance relative to projections of cost.

The renewable energy technologies investigated are biomass, geothermal, solar photovoltaics, solar thermal, and wind. We reviewed 25 studies completed over the last three decades that contained projections of the costs and market penetration of some or all of these technologies. We also reviewed projections of costs and demand of conventional sources of electricity. All the studies included could not be given equal weighting, because the rigor of the analyses varied tremendously. To account for this variation, we developed several qualitative criteria related to the projections of both electricity production and cost. We then evaluated the studies according to these criteria.

Our findings document a significant difference between the success of renewable technologies in penetrating the U.S. electricity generation market and in meeting cost-related goals, when compared with historic projections.

For market penetration, we find:

• In general, renewable technologies have failed to meet ex-pectations with respect to market penetration. One exception to this trend is wind, which has met projections from the 1980s, although earlier projections were overly optimistic. The other exception is biomass applications, for which market penetration has exceeded previous projections.

• For four of five of the renewable technologies reviewed, projections of installed capacity and generation have generally been revised downward over the past three decades. Graphs of these three sets of projections take the form of a “fan diagram” resulting from successive revisions downward of the projections.

• Nongovernmental organizations were generally more conservative than government, industry, or research organizations in their projections of capacity and generation of the various renewable technologies.

With respect to cost, however, the performance of renewable technologies is significantly different.

• Renewable technologies have succeeded in meeting expectations with respect to cost. For every technology analyzed, successive generations of projections of cost have either agreed with previous projections or have declined relative to them.

• In virtually every case, the path of actual cost has equaled or been below the projections for that period in time. The only exception appears in the case of capital costs for photovoltaics, where expectations from the 1970s and 1980s underestimated actual realized costs in the 1980s and 1990s.

• Retail prices of electricity from conventional sources have also been overestimated historically, yielding another fan diagram of projections from successive time periods.

These findings refute the premise that renewable technologies have failed to meet public policy goals, especially with respect to projections of cost, which we perceive to be the more important measure. This is remarkable, given that renewable technologies have not significantly penetrated the market, nor have they attracted large-scale investment and production that can contribute to technological development or economies of scale in production, as many analysts anticipated when forming their cost projections. The small market share of renewables appears to have more to do with changes outside their own development — principally regulatory reform and changes in conventional technologies — than with their technological performance. The industry appears to have been most successful with respect to factors most within their control.

We conclude that many significant expectations and public policy goals regarding development of renewable technologies for electricity generation have been achieved. Any argument that public policy support for renewable technologies should be ended because “past efforts have been unsuccessful” is based on a faulty premise. These findings should be of interest in the policy debate about the possible future role of renewable energy technologies, and about whether public policy can contribute effectively to the direction and pace of technological change.

Abstract A Message from the Staff of the Renewable Energy Policy Project Article