Capitalism has been one of the significant pillars in shaping the society that we are in today. Also, the free market economy has been at the forefront in raising the community’s standards of living. These two factors have been the determinants in the production of billionaires and giant business firms worldwide.
The free market economy is underrated for long now. For instance, the estimation that mobile phone subscriptions can grow to a billion in Asia is an underestimation of over 2 billion currently. Similarly, the predictions of renewable energy growth in 2030 is an underrating because there was a surpass in 2012.
The free market economy helps channel financial resources into investment risks, which are at their initiation stage. The success of these risks results in daily goods and services. However, the alleviation of other systemic risks requires more than the free market economy. Such threats require government intervention in the form of incentives, for example, pandemics like COVID-19.
When it comes to unmitigated risks, the government can offer incentives for the achievement of broad objectives. Therefore, the firms benefit, and there is motivation to achieve the core goals of the firm. For example, clean, efficient energy incentives directly benefit consumers as they obtain immediate savings and reduce emissions.
The profits of renewable energy accrue from the government’s ITC cost. Various states motivate the renewables to advance their development through RPS. A considerable section of states in the US have renewable energy projects which can sell renewable energy credits (RECs) to institutions and entities, so they meet carbon standards. The revenue accruing after that enhance the growth of the renewable sector and a substantial reduction in greenhouse gas emissions.
The majority of the cities are impressively moving towards clean energy as well as realize these benefits. The states are aggressive to put into action the 100% clean energy by 2040. States are keen to formulate their energy policies. They hope to achieve independence of making choices affecting their dwellers.
The Federal Energy Regulatory Commission (FERC) is the agency that controls the transfer and sale of electricity. Currently, the agency is expanding to penetrate all states and control the policies of local energy. The agency has a Minimum Offer Price Rule (MOPR) to price incentives like the RECs.
Various ratepayers are raising their concerns over the incessantly high net-metering compensation among ratepayers. NERA, one of the ratepayers’ associations, wants FERC to publicize the state-level net-metering policies to avoid succumbing to the ratepayers due to high T&D costs. The above are some of the instances when there is government intervention, derail from the purely free-market economy. Critics argue that the incentives directed to fossil fuel plants distort the implementation of the clean energy programs.
In conclusion, all businesses need to thrive in this exuberantly competitive environment. They must also advance technologically, or else they will be phase out of existence. However, it is essential to note that the renewable industry is making quick steps to technical changes. This move is clear with various projects like wind and solar farms.