While this is still well below countries such as Spain and Germany, where renewable energy accounts for up to one-third of consumption, the US has avoided the high costs associated with renewable energy in the early years of its development.
Already ranked second to China with 229.91 gigawatts of installed renewable energy capacity, the US is now set to capitalise on falling production costs and increase its renewables exposure.
Chris Archer, Head of Green Energy, Americas, at Macquarie Capital says while there are opportunities for growth, industry participants need to be aware of the market dynamics.
“There is no one market for renewables in the US," Archer says. “There are significant differences from region to region depending on climate, geography, demographics, grid capacity and regulatory policies, creating separate markets with distinct characteristics.
"To explore the US opportunity effectively, market participants and investors need to understand how regional differences affect renewables strategies."
Archer sees three key opportunities in the US renewables market:
A relatively cheap renewable energy source, utility-scale costs in the US have dropped from $US4.57 per watt in 2010 to $US1.03 in 2017, while residential photo-voltaic costs dropped from $US7.24 to $US2.80 per watt over the same period.
As improving technologies and economies of scale drive costs lower, Macquarie is working with companies to identify potential solar sites, purchase needed land, evaluate the best available technology and develop appropriate capital structures.
"In some regions, we are at the point where solar power makes economic sense without subsidy. Just as we saw with cell phones as costs fell in the 1990s, what was once a niche product is now going mainstream and is poised for exponential growth," says Archer.
Offshore wind power
Offshore wind facilities are an attractive option for major metropolitan centres, which are typically located near coastal areas.
The shallow Northeastern coastal seabed is suitable for offshore wind farms, potentially serving areas of high population density such as New York and New England and easing pressure on the Northeastern grid, which is stretched to near-capacity.