Ernst & Young -
Proponents of renewable energy in the US and Canada say there has
never been a better opportunity to replace carbon-based fossil
fuels - coal, natural gas and oil -with alternatives such as wind,
hydroelectric and solar power.

The governments of both countries are evaluating their
long-term energy policy, and the Obama administration has touted
renewable energy as a driver of future growth. Despite the
favourable environment, however, businesses are only tentative
consumers of renewable energy. And many energy producers are still
waiting to see if there are significant opportunities to generate
new revenue.

To investigate the views of Canadian and US senior
executives with regard to renewable energy, the Economist
Intelligence Unit conducted an online survey of 132 executives,
interviews and related research and found that the
most significant drivers for renewable energy are public perception
and government, while cost and technological immaturity are still
significant barriers.

These are the main findings.

• Despite recently announced government incentive programs,
  renewable energy still remains expensive for both consumers and
  suppliers in Canada, impeding the shift to new energy
  sources.
  
  
  
  



• Canadian suppliers are clearly concerned with the cost of
  generating renewable energy - with 64% saying high costs make
  renewable energy unattractive to their customers. It appears that
  their concerns are not unfounded, as 68% of energy consumers
  surveyed say their organization has not taken steps to develop and
  adopt a renewable energy strategy.
  
  
  
  



• As a result, suppliers aren’t moving quickly to add renewables
  to their portfolio. Only 38% of suppliers see growth of their
  renewable energy portfolio as a high or extremely high priority,
  with almost as many (34%), indicating that it is not as much of a
  priority.
  
  
  
  



• 57% of suppliers say that positive public perception is the
  biggest benefit to their organization incorporating renewables into
  its energy mix.
  
  
  
  



• In order to make significant progress with renewables, both
  suppliers and consumers agree that government has a crucial role to
  play in providing the necessary impetus.
  
  
  
  



• Government regulation is particularly important in Canada,
  where 73% of supplier-respondents see it as a barrier, compared
  with only 42% in the US.
  
  
  
  



• 46% of respondents say that recent policies or those being
  proposed in their country are a step in the right direction -
  although more incentives are needed.

Here are some highlights from the final
report:

In any business environment, the bottom line
matters. So making renewable energy production and consumption
attractive boils down to cost.

Supply of renewables is limited by the need for heavy
investments in infrastructure and relatively lower margins.
Uncompetitive pricing vis-a-vis fossil fuels constrains demand from
energy consumers.

The bottom line matters - For renewable energy
to contribute significantly to reducing North America’s heavy
reliance on fossil fuels, the cost of renewable forms of energy
must fall.

Surprisingly, one concern trumps

financial results for energy suppliers: public opinion.
The public eye matters - for suppliers. Public
perception is a significant driver for energy suppliers, pressuring
them to commit to incorporating renewables into their energy
portfolio. In contrast, there is less pressure on energy
consumers.



For all the debate about the exact

means of lowering infrastructure and cost barriers, there is one
point of near-perfect consensus: the solution will come via
government intervention.

Whether through regulation or incentives, government has a crucial
role to play.

Governments are in the driver’s seat. - If
renewables are to meet public expectations, governments must pursue
a clear agenda to provide incentives for suppliers and consumers
alike.

Both groups say that governments have a key role in creating an
environment favourable to renewable energy. Consumers are most
influenced by government tax incentives. For suppliers, government
regulation remains the biggest barrier to greater investment in
renewables.

The Ernst & Young report, href=”http://www.ey.com/Publication/vwLUAssets/RenewableEnergy/$FILE/RenewableEnergy.pdf”
target=”_blank”>Renewable energy in North America: Moving toward a
richer mix, was produced in cooperation with the
Economist Intelligence Unit (EIU).  Cathy Cobey
and Melanie Steiner of Ernst & Young worked with EIU to develop
this report.