Renewable energy to the United States

Trends and opportunities

The market

In the United States (US), renewable energy is primarily defined by solar, wind, geothermal, hydroelectric, biomass and biofuel power generation. The country is abundant in renewable energy resources, and companies across all industries are developing, manufacturing, or installing renewable energy systems. The push for renewables in the United States has been driven by legislation such as the national Clean Power Plan (CPP), and state-specific efforts to generate and consume renewables, and cut harmful emissions such as CO2. In terms of national energy consumption, the top three sources of renewables by quantity are hydroelectric power, wind power and wood biomass. Nonhydropower renewables are forecast to generate 8 per cent of the United States’ electricity generation in 2016 and nine per cent in 2017 (Source: EIA, Short-Term Energy Outlook, 8 November 2016).

For individual consumers, solar, wind and geothermal systems are more accessible and affordable than ever, with many residents interested in the option of generating their own electricity for eco-friendly and tax purposes, as well as selling excess energy generated back to their utility providers. California is the leading state in terms of cumulative solar electricity capacity installed (13,241 MW), followed by Arizona (2,303 MW) and North Carolina (2,087 MW) (Source: Solar Energy Industries Association; Top 10 Solar States; 27 July 2016). The top three states for generated wind capacity are Texas (18,531 MW), Iowa (6,365) and California (5,662 MW) (Source: American Wind Energy Association, U.S. Wind Energy State Facts, 31 July 2016). The top three states for geothermal capacity are California (2,760 MW), Nevada (580 MW) and Utah (77 MW) (Source: Geothermal Energy Association; 2015 Annual U.S. & Global Geothermal Power Production Report; February 2015).

The US has the second highest level of clean energy investment in the world behind China, reaching US$56 billion in 2015, an eight per cent increase y-o-y from 2014. Competitors Europe and Brazil saw double-digit declines in 2015, making the United States a clear winner in the places to do business as a foreign exporter in this sector. (Source: Bloomberg New Energy Finance, Global Trends in Clean Energy Investment, January 2016).

Opportunities

There are many opportunities around the country to provide products and services for renewable energy generation, distribution and maintenance, and the opportunities are only growing, with the share of renewable energy in power generation. The International Renewable Energy Agency is anticipating that the share in the United States will reach at least 10 per cent under conservative efforts, but as much as 27 per cent by increasing investment and utilising existing renewable energy technologies.

US Solar Energy Potential Map
US Wind Project Map

Competitive environment

While the United States can be self-reliant for its current renewable energy capacity, it relies on imports for many of the products and technology to develop systems for commercial and residential consumers. The United States maintains only a small share of global solar manufacturing capacity – roughly five per cent, despite inventing or innovating most solar technologies. More than 90 per cent of the production capacity of the solar manufacturing firms operating in the United States resides outside the U.S. market (Source: International Trade Administration; 2016 Top Markets Report Renewable Energy Sector Snapshot: Solar Energy; 2016).

Suppliers will continue to find steep competition from lower-cost manufacturers, particularly Asian suppliers, but the extension of the renewable electricity production tax credit (PTC) will enable more domestic projects to be completed and require more inputs, increasing demand from imports from foreign suppliers.

Tariffs, regulations and customs

As a result of the Australia-United States FTA established in 2005, most tariffs for exported products from Australia have been eliminated, including many natural resources and fuel products.

See Annex 2-B (Australia tariff schedule) of AUSFTA for more detailed tariff information for specific products.

For further information on tariffs for exported products from Australia to the United States you may refer to the United States Customs and Border Protection and see their tariff tool and additional resources.

Austrade can also assist if you would like to speak to a US Customs broker for classification, compliance and other services in exporting to the United States.

Marketing your products and services

Market entry

Whether you are an upstream or downstream provider, breaking into the United States for exporting natural resources can be difficult. Research into the market environment and applicable regulation is important before exchanging goods and services. Additionally, knowing if your company is export-ready beforehand can determine how successful or unsuccessful your offerings will be in a new market.

See Austrade's International Readiness Indicator for new exporters.

As a new exporter, contacting/joining national and regional trade associations can also be a useful first step to find information on industries, obtaining member lists for contacts, and attending trade events for finding customers (see below ‘Links and industry contacts’). Reaching out to cities’ and states’ Chambers of Commerce and economic development organisations can also be useful to understand local markets and regulation.

Distribution channels

Other than direct transactions, utilising wholesalers and other retailers are common ways to market natural resources in the United States. Customs brokers are also recommended for foreign importers of products, in order to avoid financial and regulatory pitfalls.

Transport

Association of American Railroads – Freight Rail Works
US Customs and Border Protection – Basic Importing and Exporting

Links and industry contacts

Industry standards

Government and industry

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

• develop international markets
• win productive foreign direct investment
• promote international education
• strengthen Australia's tourism industry
• seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.