Renewable energy production in the U.S. is expanding at an incredible clip, and some of the states that are switching over to greener energy sources might surprise you.
In this clip from Industry Focus: Energy, Motley Fool energy analysts Sean O'Reilly and Taylor Muckerman talk about how businesses are thinking about renewable energy, some of the surprising ways that President Donald Trump and his administration are supporting the industry's growth, and more.
A full transcript follows the video.
This podcast was recorded on Feb. 2, 2017.
Sean O'Reilly: So, what am I to take away from this? Are people just invested in this because they're like, "Oh, we need more electricity, so we're just going to invest in this because of regulations"? Or is this actually being done in the places where it's economical, and that's it? How are businesses making decisions here?
Taylor Muckerman: Well, it's becoming economical in more places every day. Even if you think, Donald Trump appointed all these folks that are closely tied to the fossil-fuel industry, on his list of infrastructure projects, he has a lot that supports the renewable-energy industry.
O'Reilly: You're kidding. What?
Muckerman: Projects like, a lot of transmission lines so that you can build the infrastructure for these companies, so that they can actually get the power from a wind plant. He has this Plains & Eastern electric transmission line project, which is trying to move wind energy from the western tip of Oklahoma 720 miles south to...
O'Reilly: That sounds like the Pickens Plan, remember that?
Muckerman: ...southeast to Memphis. And that's enough clean energy for 1 million homes in the mid-South. So that's just one area. That's not actually building the wind turbines, but it's allowing that power to be efficiently distributed to places. Obviously, if you think about Memphis' population compared to the plains of western Oklahoma, it's a little bit more densely populated. So right now, those wind turbines probably aren't being used to the efficiency and the efficacy that they should be. But then, you have hydroelectric plants planned, more transmission lines, wind power, energy storage and grid modernization targeting minimizing the magnitude of potential blackouts in California by increasing storage for renewable energy. All told, it says that the projects could add about 9 gigawatts of clean power if they are all finalized and put into place. That's roughly about a third of all the energy capacity that we have added in the last year, just in a few of these projects that Trump has laid out in his initial infrastructure plan.
O'Reilly: Correct me if I'm wrong, but as I just mentioned, that sounds a lot like the Pickens Plan. Do you remember that, in 2008, T. Boone Pickens was like, "You have this energy corridor from the Dakotas down to Oklahoma, you have all this wind, you need to get it to the coast," and he wanted to build these huge transmission lines? And one of the problems is they need to be enormous, because if you're sending electricity over long distances, you lose some of it. It's actually very difficult. That's kind of exciting.
Muckerman: Yeah. A lot of these projects are being built by private companies, so it's very fragmented, almost on a state-by-state basis. If you go to the SEIA website, the Solar Energy Industries Association, they put out a report from September 2016 that basically lists every project that's online, being constructed, or in development in the entire United States. The list is 30 to 40 pages long, because there are just so many small companies that are out there building one plant, two plants. Maybe eventually they will get bought up, or maybe some of those are part of a bigger holding corp. But it's very widely distributed. It's not all public companies that are doing this. Generally, if you think about the suppliers of these wind turbines and solar panels, those are...
O'Reilly: Like a General Electric or something.
Muckerman: Yeah, those are coming from publicly traded companies like a General Electric, like a Siemens. Then on the solar-panel side you have First Solar and SunPower, and then SolarCity on the residential side. They're actually providing the solar panels and doing some installation. But a lot of the folks that are building these and operating them are private companies, for now.
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Sean O'Reilly has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool owns shares of General Electric. The Motley Fool has a disclosure policy.