Top Predictions for Renewable Energy in 2021
The global renewable energy market is predicted to grow from $184.3 billion in 2020 to $226.1 billion in 2021.
The COVID-19 pandemic slowed momentum from 2019 — the first decline in two decades of renewable energy progress. But these expert forecasts show a different story for next year.
In part, this growth is expected because many of 2020’s challenges are actually re-fueling demand for renewables, like:
- Reduced oil and gas production redirecting investor activity
- The need for sustainable job-creation policies
- Public calls for corporate and governmental accountability
- Demand for better access to lower-cost necessities like power
These social, economic, and governmental factors not only support the renewables market’s growth, but they’re also directing how the market is set to evolve in the new year and beyond.
Renewable Energy Predictions for 2021
Renewables’ increasing popularity and feasibility are driving the market’s reset after a tough 2020.
The RE100 is a coalition of global companies committed to 100% renewable energy — and it grew by more than a third last year. Today, the group includes almost 300 businesses with a combined $6.6 trillion in revenue across 140 global markets.
For many of these leaders, it’s just about good business. Given the pace of innovation and growing economies of scale, renewables are the cheapest energy option today.
Their popularity can’t be ignored, either. Today’s public outlook is brighter than ever, according to Pew Research, with:
- 79% of people saying renewable energy sources should be a priority
- 84% supporting policies like carbon taxes
- 80% wanting tougher restrictions on emissions producers
Answering this sustainability call is a win-win for governments, corporations, and the public alike. The top predictions for 2021 are based on how these different perspectives will shape the renewables market’s momentum.
Government-Led Renewable Energy Expansion
Today, almost half of all planned wind and solar projects are tied to government-backed funding.
In part, this activity supports governments’ own renewable energy commitments. But this collaborative approach is set to mature even more in 2021.
In 2020, we’ve already seen governments take on expanded roles in their relationship with businesses to manage pandemic impacts. Given today’s increased public pressure for climate solutions, this suggests we’ll see more leadership with policies:
- Focused on green job creation
- Offering grants for technological development
- Providing tax breaks for renewable energy adoption
An Accelerating Investor Mindset
From tech leaders to oil giants, more and more businesses are pledging support for greener operations. But it’s not all just about idealism and speaking to consumers’ values. Investors today are ramping up the pressure.
A study from 2020 showed that renewable investments average a 178.2% return over a five-year period — compared with a -20.7% return on fossil fuel investments.
While renewables weren’t immune to COVID-19’s disruptions, the International Energy Agency (IEA) confirmed this upward trend isn’t halting. Its analysis found that:
- In 2020, auctioned renewable capacity was 15% higher than in 2019 — setting a new record.
- Shares of solar companies worldwide more than doubled in value.
- Renewables are the only energy sources expected to grow next year compared to 2019.
A Focus on Social Equity
Climate change disproportionately affects lower-income areas and communities of color. Then there are the repercussions for developing nations as sea levels rise, pollution mounts, and weather patterns change.
Public appetite for better social justice has mounted for years — and it hasn’t gone unnoticed by business leaders. Research shows that companies with Corporate Social Responsibility (CSR) programs are more profitable than those that don’t.
But 2020 then brought one of the largest protest movements in recent memory spurred by the death of George Floyd. For boardroom executives, it became clear that the standard CSR playbook isn’t enough.
There will be an increasing demand for renewable energy solutions that don’t just correct climate change inequities. Today’s plans will also have to be grounded in social justice.
This means investors will be looking for projects that:
- Positively impact communities holistically, from tax revenue generation to job creation
- Prioritize employee safety, representation, and well-being throughout the supply chain
- Have transparent supply chain accountability
- Offer improved accessibility for public, commercial, and industrial stakeholders alike
- Account for trade-offs with equitable solutions
Cheaper Renewable Choices
Green energy options are cheaper than ever — and reports show that this trend is accelerating.
The International Renewable Energy Agency (IRENA) says we’ll see more investment in sources like solar and wind. This is largely thanks to costs driven lower by:
- Improved technologies
- Greater economies of scale
- Increasingly competitive supply chains
Between 2010 and 2019, renewables’ electricity costs dropped significantly — including 80% for solar cells and 39% for onshore wind. In 2020, Bloomberg reported that costs fell another 4% and 9% for wind and solar projects, respectively.
But renewables’ economic draw is also expanding.
Utility-scale storage costs have declined by 74% since 2013 — and are set to continue to fall by 8% per year through the next decade. Cheaper storage creates a sort of renewables feedback loop of growth. It extends the availability, access, and amount of clean energy delivery with every project.
According to IRENA, these trends don’t just undercut less sustainable options like fossil fuels. They’ll also boost the renewables market nearly indefinitely, driving more competition and innovations that cut costs year after year.
Innovation in Green Building Technology
Heating an igloo with solar or wind energy doesn’t make it more sustainable by default. How we produce energy is only a part of the picture.
The demand for renewable energy solutions means a need for more sustainable energy architecture. By 2027, this green design market is expected to grow by $187 billion — rising almost 9% every year.
This means there will be a greater emphasis on commercial building projects that maximize efficiency in their design, like:
- Architectural attention to building layout like wind direction, window positioning, and heat flow
- Use of green building technologies like energy-efficient windows and insulation
- Refurbishing instead of rebuilding
- Using locally sourced, recycled materials
Harness 2021’s Potential
Whether it’s about matching consumer values, attracting investors, or supporting clear global goals, renewable energy is the way forward.
Going greener doesn’t have to be complicated. If you’re looking to optimize your sustainability efforts, get in touch with Miniwiz. From sourcing green building materials to zero-waste design, our solutions ensure you’re aligned with 2021’s renewable energy growth.