Transcending Renewables’ Limits:

Why Innovation Is Essential and How

Federal Investments Can Unlock It
LINH NGUYEN | DECEMBER 2021

Renewables are far from being affordable, available, or reliable enough to meet growing demand
for zero-carbon electricity. Scientists have developed promising solutions to these limitations, but
it will require sustained, expanded federal investments to grow them to a transformative scale.

KEY TAKEAWAYS

▪ The current scale of federal investment is too small to accelerate renewables innovation
with the urgency the climate challenge demands, especially given the time it takes to
bring new technologies into widespread use.

▪ Federal investment in renewables research, development, and demonstration (RD&D)

should focus on technologies that are higher performing, more efficient, viable in broader
geographies, and better integrated with the grid.

▪ Researchers are exploring several promising alternatives to crystalline silicon photovoltaic

(PV) cells. Perovskite—a class of hybrid organic-inorganic PV material—is worthy of
special attention.

▪ Floating wind farms will be necessary to transcend the geographical limits of offshore
wind power. But other countries are far outspending the United States in demonstrating
floating offshore wind technologies.

▪ Enhanced geothermal systems (EGS) projects require significant upfront investments to

cover drilling costs and mitigate geological risk during exploration. Despite the scale of
investment required, federal funding for EGS RD&D dropped in FY 2021.

INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | DECEMBER 2021

INTRODUCTION
Renewables will be essential pillars of a cleaned-up power system in a carbon-constrained world.
Many studies find that global renewable power capacity must double, or even triple, by 2050 to
limit global temperature increases. 1 Record-cheap solar photovoltaic (PV) and wind power have
given the power sector an early edge in the race to net zero greenhouse gas emissions by mid-
century. However, despite impressive improvements over recent decades, renewables are far from
being affordable, available, or reliable enough to meet the world’s growing demand for zero
carbon electricity. The good news is scientists have developed promising solutions that may
overcome renewables’ current limits. Sustained and expanded federal investments will be
essential if these solutions are to grow to a transformative scale.

The renewables that power the grid today are harnessed by certain dominant technologies.
Globally, over 90 percent of solar panels are made with crystalline silicon (c-Si) PV cells, 99
percent of offshore wind turbines have fixed bottoms, and 99 percent of geothermal resources
come from natural reservoirs. 2 There is no doubt that reaching net zero will require the further
deployment of these mature technologies.

But it would be dangerous to assume—as too many do—that these weapons will win the battle.
Every technology has limits, and one purpose of innovation is to overcome those limits. 3
Variability, for instance, is the biggest challenge facing solar PV and wind power. Innovation can
address it by enhancing these technologies’ ability to provide reliable power throughout the day.
In parts of the world with dense cities and limited land, innovation is important to overcome
renewables’ siting issues and land-use conflicts. Innovation can also increase the efficiency of
generating equipment to produce more power using fewer resources.

Market formation and demand-pull policies are equally critical to foster early, rapid, and widespread
adoption of truly transformative innovations.

This briefing complements the Information Technology and Innovation Foundation’s (ITIF’s)
2021 “Climate Technologies to Watch” series and the 2020 report “An Innovation Agenda for
Advanced Renewables.” 4 It provides a deeper dive into federal investments in certain emerging
renewable technologies that should be on federal policymakers’ priority list.

GOVERNMENT SPENDING ON RENEWABLES INNOVATION HAS STAGNATED

The federal government is uniquely suited to spur further innovation in renewables to
decarbonize the power grid and address the climate crisis. The private sector cannot afford to
invest in high-risk, high-capital-cost research, development, and demonstration (RD&D) that
often sets the stage for truly transformative innovations. Market formation and demand-pull
policies are equally critical to foster early, rapid, and widespread adoption.

For instance, federally funded nuclear power RD&D and supportive regulatory policies led to
large-scale private investment in commercial power plants in the 1960s and 1970s. These
plants now account for 20 percent of U.S. electricity generation and 54 percent of low-carbon
generation. 5 Similarly, federal support for shale gas resource characterization and directional
drilling—in tandem with industry-matched applied research and a federal production tax credit—

INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | DECEMBER 2021 PAGE 1

led to the dramatic rise of shale gas production from less than 1 percent of the domestic total in
2000 to nearly 80 percent in 2020. 6
Figure 1: U.S. Department of Energy spending on renewables RD&D, FY 1978–2021 7

2.5

2.0
(US$Billions)

1.5

1.0

0.5

0.0
1978 1982 1986 1990 1994 1998 2002 2006 2009 2013 2017 2021

Even though climate change poses a more severe threat than the energy crises of the late 1970s
did, the U.S. government is investing far less in renewables innovation than it did then. As figure
1 shows, even when the investment surge provided by the 2009 American Recovery and
Reinvestment Act is taken into consideration, real federal funding remains less than half of 1978
levels.

Most energy innovations in the past—even recent successful consumer products such as LEDs
and batteries—have taken 20 to 70 years to go from the first prototype to a 1 percent market
share. 8 If federal investment in renewables innovation continues at the current pace, critical
technologies now in the pipeline will not reach maturity in time to meet the growing demand for
zero carbon power in the coming decades.

WIND POWER BEYOND LIMITS

Even though wind power capacity in the United States has grown 40 times in the past three
decades—from 0.2 percent of generating capacity in 1990 to 8 percent in 2020—constraints to
further progress loom in the near future. 9 For instance, land for optimal sites may become more
limited and expensive as onshore wind penetration increases. Innovations that reduce the land
required for each megawatt (MW) generated would help overcome this constraint. Radical
alternatives such as vertical-axis turbines—a much less common technology that uses towers just
10 meters tall and captures wind from any direction to produce 10 times the energy from the
same amount of land—may be worth exploring. 10

Offshore wind power also faces geographical limits. Fixed-foundation wind farms—in which
turbines are rooted to the seabed—dominate this emerging sector. Yet, most of the nation’s

INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | DECEMBER 2021 PAGE 2

offshore wind resources lie in deep waters beyond the reach of fixed-foundation turbines. If the
United States is to meet the Biden administration’s target of 30 gigawatts of offshore wind by
2030, floating wind farms will be necessary to transcend these limits. Only innovation in
conjunction with early deployment will bring down their costs, which are currently twice those of
fixed-foundation wind farms and three times that of onshore wind.
Figure 2: Government funding for floating wind demonstration projects 11
300

250

200
US$Millions

150

100

50

0
Aqua Ventus (United WindFloat Atlantic Fukushima Hywind Tampen
States) (Portugal) FORWARD (Japan) (Norway)

Floating offshore wind technology has been proven on a small scale, but large-scale investments
in it remain extremely risky. No company in the United States has yet announced a commercially
viable project. 12 Public-private partnerships to demonstrate this technology at scale are crucial to
help it take the next big step.

Other countries are far outspending the United States in this regard. Aqua Ventus, off the coast
of Maine, is the only such project under construction in the United States. The U.S. Department
of Energy (DOE) is providing up to $50.7 million to create 11 MW of capacity, far smaller than
comparable projects elsewhere in the world (see figure 2). The 25 MW WindFloat Atlantic project
in Portugal, for example, has received $106 million in grants and loans from the European
Investment Bank, an agency of the European Union. 13 And the 88 MW Hywind Tampen project in
the Norwegian North Sea was awarded nearly $240 million by the Norwegian government in
2019. 14

SOLAR POWER BEYOND LIMITS

C-Si solar PV cells have made extraordinary progress, with power-conversion efficiency
improvements of over 50 percent over the last 15 years contributing to declining unit costs. 15
Yet, even though this technology dominates the global market, it is pressing up against
significant limits. These cells have an efficiency limit of 30 percent, are thick and bulky, and are
made through a complex and energy-intensive process.

INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | DECEMBER 2021 PAGE 3

Researchers are exploring several promising alternatives to c-Si cells. Organic PV materials
composed of carbon-rich polymers, for instance, capture light with higher efficiency. 16 Quantum
dots generate electricity using semiconductor particles a few nanometers wide and are easy to
manufacture. III-V semiconductors can achieve exceptionally high efficiencies and have other
advantageous physical properties. 17 Combining these materials and others, including c-Si, in
hybrid architectures multiplies the opportunities.

Perovskite—a class of hybrid organic-inorganic PV material—is worthy of special attention.

Perovskite has a flexible bandgap, which allows it to convert light from a wide swath of the solar
spectrum into usable energy. This flexibility means perovskite can be paired with other PV
materials for combined efficiencies over the 30 percent limit of c-Si alone. It is also deployable
as thin films, which might be integrated into building components. Such technology would
reduce the need to devote large land areas to solar farms.
Figure 3: DOE Solar Energy Technology Office spending for solar research and development, 2020 18

25%

CSP R&D
46% $750 Million
Allocated PV R&D

Systems Int, Soft Cost, Planning

25%

4%

Perovskite PV R&D

Federal funding for perovskite has inadequately reflected the scale of this opportunity. DOE only
recently established a perovskite research and development (R&D) program within the Solar
Energy Technology Office (SETO). 19 In FY 2020, only 4 percent of SETO’s funding was allocated
for perovskite R&D (see figure 3). 20 More broadly, appropriations for PV R&D within SETO have
remained unchanged at $72 million annually for the past three fiscal years. Increased funding
for PV R&D, with a specific focus on perovskite R&D, is essential to bring this promising
technology to market on an accelerated time scale. 21

GEOTHERMAL POWER BEYOND LIMITS

The growth of intermittent renewables such as wind and solar PV will bring with it a demand for
firm, zero carbon power to fill in the gaps. Geothermal power has the potential to meet some of
this demand. Virtually all commercial-scale geothermal projects today draw on conventional
hydrothermal reservoirs (natural pockets of heat and water not far below the surface). However,
only 2 percent of the Earth’s geothermal resources are available through such reservoirs. 22

INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | DECEMBER 2021 PAGE 4

Enhanced geothermal systems (EGS)—artificial reservoirs that draw heat from rock formations
deep beneath the earth’s crust—could provide access to the other 98 percent. 23 Government
investments in next-generation high-temperature, high-pressure sensors, drilling tools, and well-
casing materials, as well as commercial-scale demonstrations, are vital for EGS to become cost
competitive with other power-generation sources.
Figure 4: DOE spending on EGS research, development, and demonstration, FY 2018–2021
80

70

60
(US$Millions)

50

40

30

20

10

0
2018 2019 2020 2021

EGS projects are very capital intensive, requiring significant upfront investment to cover drilling
costs and mitigate geological risk during exploration. Despite the scale of investment required,
DOE funding for EGS RD&D dropped from $69 million in FY 2020 to $65 million in FY 2021
(see figure 4).

EGS has received strong support from Congress, though. The Energy Act of 2020 authorized DOE
$105 million to construct four EGS demonstration projects, and $300 million to develop three
Frontier Observatory for Research in Geothermal Energy sites to study EGS for the period of FY
2021 through 2025. The Infrastructure Investment and Jobs Act, signed into law in November
2021, authorized DOE $84 million for the period of FY 2022 through 2025 to advance EGS
reservoir simulation technologies and techniques. ITIF’s “Innovation Agenda” report recommends
congressional appropriators fully fund these programs in the coming years. 24

CONCLUSION
The world is not on track to meet net zero emissions by mid-century unless renewables and other
low-carbon power technologies become affordable and reliable enough to supplant unabated
fossil fuel generation. The current scale of federal investment is too small to accelerate
renewables innovation with the urgency the climate challenge demands, especially given the time
it takes to bring new technologies into widespread use.

Federal investments in RD&D should focus on technologies that are higher performing, more
efficient, viable in broader geographies, and better integrated with the grid. While advanced

INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | DECEMBER 2021 PAGE 5

renewables are not the only options for reaching net zero emissions by mid-century, they would
expand the portfolio in valuable ways. They could be the conduits linking the planet’s limitless
natural resources to clean energy a thriving global society can depend on.

FURTHER READING
▪ Robert Rozansky, “An Innovation Agenda for Advanced Renewable Energy Technologies”
(ITIF, 2020), https://itif.org/publications/2020/12/21/innovation-agenda-advanced-
renewable-energy-technologies.
▪ Colin Cunliff and Linh Nguyen, “Energizing Innovation: Raising the Ambition for Federal
Energy RD&D in Fiscal Year 2022” (ITIF, 2021),
https://itif.org/publications/2021/05/17/energizing-innovation-raising-ambition-federal-
energy-rdd-fiscal-year-2022.
▪ Linh Nguyen, “The Next Big Things: Climate Technologies to Watch” (ITIF, 2021),
https://itif.org/next-big-things-climate-technologies-watch.

Acknowledgments
The author wishes to thank David M. Hart for providing input to this briefing. Any errors or
omissions are the author’s alone.

About the Author

Linh Nguyen is a research assistant for clean energy innovation with ITIF. She previously worked
for Climate Advisers and Resource Energy. She holds a master’s degree in energy policy from
Johns Hopkins University.

About ITIF
The Information Technology and Innovation Foundation (ITIF) is an independent, nonprofit,
nonpartisan research and educational institute focusing on the intersection of technological
innovation and public policy. Recognized by its peers in the think tank community as the global
center of excellence for science and technology policy, ITIF’s mission is to formulate and
promote policy solutions that accelerate innovation and boost productivity to spur growth,
opportunity, and progress.

For more information, visit itif.org.

INFORMATION TECHNOLOGY & INNOVATION FOUNDATION | DECEMBER 2021 PAGE 6

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