A record-breaking $105 billion was invested into U.S. clean energy assets in 2021, according to market analysis.
Renewable energy and electric vehicles received the bulk of the overall clean energy investing capital, which increased 11% year-over-year in BloombergNEF's 10th annual Sustainable Energy in America Factbook.
“Last year really was a year of firsts,” said Ethan Zindler, BloombergNEF’s head of Americas. He said the sector experienced record volumes of new capital deployed to support the transition to a lower-carbon economy, a record number of electric vehicles sold, and record contributions to the power grid from zero-carbon renewable sources of power. Despite the gains, he said that "plenty of open questions about future demand that clearer signals from Washington could resolve.”
Developers added 37 GW of wind and solar capacity in 2021, and renewable energy's contribution to the U.S. electric grid increased by 4.1% compared to 2020.
The U.S. now invests around $200 million per year in hydrogen, which is double the spend from 2020. Investment tied to electric vehicles reached $35 billion.
Corporations led the way
Corporate demand for clean energy remained a key driver of clean energy investment and deployment in 2021, the research found.
Corporations signed power purchase agreements for 17 GW in 202. That topped the previous record of 14.1 GW in 2014. Solar made up a majority of contracted clean energy capacity with 13.4 GW. The largest corporate offtakers were Microsoft, Amazon, Meta, and Google.
The tech giants accounted for more than half of the capacity contracted through PPAs in 2021.
More than 350 companies have joined the RE100 pledge to procure 100% clean energy, BloombergNEF found. In 2021, 65 new member corporations joined the RE100 group, including Zoetis, Deloitte, Under Armor, Dupont, and Home Depot.
Cheapest form of generation
Rising material and transportation expenses sent the cost of most power-generating sources higher in 2021, according to the BloombergNEF report. Renewables didn't escape unscathed, but remained the cheapest source for power generation in the U.S.
Before accounting for subsidies, the levelized costs of electricity of onshore wind ($31-63/MWh) and tracking solar PV ($32-50/MWh) were lower than combined-cycle natural gas ($38-81/MWh). Combined-cycle natural gas was the least-cost form of dispatchable power in the U.S.
Congress passed the $1.2 billion bipartisan infrastructure package in 2021, which included $80 billion for the energy transition. The bill included $28 billion for grid enhancement, $9.5 billion for hydrogen hubs and demonstration, and $7.5 billion for an electric vehicle charging network.
The Build Back Better Act, meanwhile, has stalled in Congress, and so has the $550 billion for clean energy. The budget reconciliation would extend the crucial investment tax credit for solar and the production tax credit for onshore wind before each begin to phase down in the coming years.