Renewables are already the cheapest source of new power generation in most markets across the world. Cost declines due to technology evolutions and rapid policy advancements have triggered new investments, leading to further capacity additions and price drops. In the case of solar PV, investors and governments have come to expect continuously lower capex. In recent years however, as the technologies have matured, the capex of solar and wind has declined at a slower pace and become subject to temporary supply chain hurdles, such as the past year's escalating shipment costs, rising module prices and escalating steel costs.

As the penetration of renewables increases, it is not so much about the cost, as it is about the value provided to the system. In a moment of high volatility, the predictability in operating renewables is valued. Financiers and investors also value investments in renewables as a step to meet climate commitments and de-risk portfolios. The consolidated banking experience with renewables, alongside a strong push for green financing, has also brought down the cost of capital for renewable power projects. Recent spikes in electricity prices have also improved the captured prices for renewables. These perceived values counterbalance the industry's higher-than-expected capex and underpin the continued build-out of new renewables capacity.

Supply chain risks and increasing costs remain a major concern for the renewables industry, and companies throughout the value chain will need to mitigate and hedge these risks to remain successful. Despite these concerns, the value of renewables remains high enough to sustain a healthy growth rate of renewables additions...

This is just one of 10 cleantech trends expected this year in technologies that reduce carbon emissions and confront climate change. For the full breakdown of the list, watch the video below.

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For a comprehensive overview of each trend, supporting data, and a summary as to why it's going to play such a key role this year, download your copy of the new 10 Cleantech Trends of 2022 whitepaper.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.