Renewable generation, primarily from wind and solar, accounts for a steadily growing portion of global capacity and an even greater share of investment. Solar and wind are increasingly competitive with other generation sources (even without subsidies) due to rapid increases in the efficiency of photovoltaic cells and a new generation of larger, more efficient, turbines. Offshore wind projects which typically utilize the largest and most efficient turbines are finally being developed in the US. Utility scale solar projects are growing in size and increasingly becoming more complex to increase performance. Issues with intermittency have led to a rapid increase in the deployment of energy storage and increasing investment in a more robust smart grid using smarter and stronger equipment. At the same time, reduction and expiration of feed-in tariffs and subsidies has led to a reduction in residential installs in many areas.
Despite near term challenges, companies involved in the manufacturing, installation, operation and maintenance of green energy sources, as well as the technologies that enable them, should see slowing but steady growth in the coming years. The installed base of renewables is increasingly important for companies in the green energy sector to maintain steady growth. However, operating in the sector is not without challenges. While significant consolidation has taken place among providers of turbines and solar panels, the service landscape is still highly fragmented. Many energy storage and smart grid software and equipment providers are at the stage of transitioning from early stage venture capital companies to operating companies and face the choice between selling to a larger company or implementing the strategy and systems to build a company capable of selling and delivering their innovative products and services to new customers and geographies.