FIGURE 1.1 Average price for natural gas for the electric power sector.

Source: EIA, 2008a.

Since the late 1990s, renewables have begun an era of strong growth in the United States, albeit from a small base. The amount of electricity produced from wind in particular began to increase, owing to advances in technology as well as favorable policies. Wind power electricity generation increased at a compounded annual growth rate of more than 20 percent from 1997 and 2006 and of more than 30 percent from 2004 to 2006 (EIA, 2008a). Solar photovoltaics (PV) have also seen similar growth rates in generation capacity in the United States. In 2008, non-hydropower renewables accounted for 3.4 percent of total electricity generation, up from 2.5 percent in 2007 (EIA, 2009). More details on the electricity capacity and the generation contributions from individual renewables are presented below in this chapter.

The generation of electricity from renewables has increased in part because of the effects of state-based policies adopted during the restructuring of many domestic electricity markets. One prominent policy mechanism for increasing the level of