Market Analysis
Click to view report: Impacts of Voluntary Renewable Energy Demand on Deployment: A Market-Based Approach (pdf)
Most research to date on the impacts of voluntary demand on renewable energy deployment has been primarily based on modeled outcomes of individual projects or of modeled energy systems. Both modeling approaches are useful but limited methods for characterizing the full impacts of voluntary renewable energy demand. In this peer-reviewed report for the EPA’s Green Power Partnership, Dr. Eric O’Shaughnessy develops an alternative approach that describes voluntary market impacts in terms of the estimated effects of voluntary market functions (revenues, de-risking through long-term contracts, and long-term demand signals) on the renewable energy development industry and deployment. The report analyzes observed market-level metrics in four categories:
- Market size. Voluntary market sales have grown for over two decades, reaching about 319 million megawatt-hours (MWh) in 2023, or about 44% of all U.S. non-hydropower renewable energy sales.
- Long-term contracts. Voluntary buyers have collectively signed long-term contracts to procure energy from over 70 gigawatts (GW) of renewable energy capacity.
- Voluntary market revenues. An estimated $3 billion to $5 billion of voluntary market revenues accrued to the U.S. renewable energy industry from 2014 to 2023, in addition to about $5 billion to $10 billion in power sales in voluntary long-term contracts.
- Voluntary buyer public commitments. Hundreds of non-residential institutions have made credible public commitments to voluntarily procure renewable energy.
Based on these metrics, the report estimates that the voluntary market drove 17–60% of non-hydropower renewable energy deployment outside of state clean energy mandates from 2014 to 2023, or 7–25% of all renewable energy deployment. The report also suggests that analysis from multiple perspectives can support a more comprehensive and accurate understanding of the role of the voluntary market.