imgRenewablesIcon Renewables

Encourage or discourage building solar panels, geothermal systems, and wind turbines. Renewable energy includes wind, solar, geothermal, hydropower, and other technologies that produce energy with little to no carbon dioxide emissions. Note that nuclear and bioenergy are considered separately.


  • Governments offering tax incentives to families installing solar panels on their roofs.

  • Farmers and land owners allowing the installment of wind turbines on their land.

  • Research and development for improvements to renewable energy technologies in order to improve efficiencies and/or reduce costs.

  • Businesses committing to powering themselves with 100% renewable energy.

Big Message

  • Subsidizing renewable energy helps to limit coal and gas demand and reduce future temperature. Without other actions, however, it isn’t enough to keep fossil fuels in the ground.

Key Dynamics

  • Impact. As you encourage renewables, watch demand for Renewables (in green) grow and the demand for Coal (in brown) and Natural Gas (in blue) reduce in the “Global Sources of Primary Energy” graph. Renewable energy is already growing steadily in the Baseline scenario so the additional subsidies help reduce emissions but only so much.

  • Price-demand feedback. Additionally, subsidies to renewables decrease energy costs, which increase energy demand over what it would have been otherwise (people use more energy when it is cheap). This feedback effect somewhat reduces the positive impact of encouraging renewable energy. View this dynamic with the graph “Final Energy Consumption.”

  • Delays. It takes time for the subsidies and encouragement of renewables to show up in installed capacity. Subsidies are phased in over 10 years so note in the “Renewable Final Energy Consumption” graph that the Current Scenario does not immediately differ from the Baseline.

Potential Co-Benefits of Encouraging Renewables

  • Decreased air and water pollution from switching away from fossil fuel sources can improve public health, worker productivity, and savings for governments and households.

  • Renewables can help expand energy access during power outages.

  • Renewable energy offers opportunities for high- and low-skilled employment.

Equity Considerations

  • Although the price of renewable energy infrastructure continues to fall, many low-income communities remain unable to access the technology in both developed and developing countries. Working to ensure an equitable energy transition can help everyone to reap the benefits. 1

  • Policies in many developed countries limit solar and wind subsidy programs to homeowners, who often occupy higher income brackets.

Slider Settings

The following table highlights the numerical ranges for the labelled input levels of the Renewables slider. Each of the energy supply sliders is set to reflect a similar percentage cost increase or decrease for each input level.


status quo


highly subsidized

Change in price per kilowatt hour (kWh)

+$0.02 to +$0.01

+$0.01 to -$0.01

-$0.01 to -$0.02

-$0.02 to -$0.03

Cost increase or decrease

+30% to +10%

+10% to -10%

-10% to -30%

-30% to -60%

Model Structure

This sector tracks the time it takes wind and solar installations to move through several stages – capacity under development, under construction, and actually producing energy.

The most important feedback loops in the renewables sector include:

  1. Overheating – costs go up when demand grows faster than the manufacturing and support industries can keep up.

  2. Site availability – efficiency goes down and costs go up when renewables are sited in less optimal locations (e.g., solar power in rainy climates).

  3. Learning effect – every doubling of cumulative production will bring costs down 20% (aka, the progress ratio). Costs come down as supply chains, business models, and production industries grow.

Case Studies

United States: Scaling up wind and solar energy sources is estimated to have avoided 7,000 premature deaths and saved $87.6 B in health costs and climate impacts from 2007-2015. 2

Benin: Solar-powered drip irrigation for women farmers was shown to increase household vegetable production and consumption, increase income level, and decrease food insecurity. 3

Global: Increasing the share of renewable energy in the global energy supply to 65% could generate 6 million jobs and add $19 trillion to the world economy by 2050. 4


Why doesn’t encouraging renewables with a big subsidy avoid much future warming alone?

  • Renewables only reduce CO2 emissions when they displace fossil fuels. In some cases renewable energy just meets new energy demand and doesn’t replace the demand met by coal and gas.

  • Second, there is a price-demand feedback effect – in order to grow, renewables are made less expensive. The drop in energy price boosts demand, undoing some of the positive effect.

How can I get renewables to grow faster?

  • Discourage coal and oil by taxing them individually or setting a carbon price.

  • Adjust the “Renewables R&D breakthrough cost reduction” slider to simulate a sudden breakthrough that would dramatically lower the cost of renewable energy.

How do you handle the availability and cost of storage of electricity from renewables?

  • The cost of storage for renewables is explicitly modeled in En-ROADS, and as renewables become a significant part of energy supply, storage must be cost effective to enable further expansion.

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Eisenberg, A. (2018). Just Transitions. Southern California Law Review, Vol. 92, No. 101, 2019.


Millstein, D., Wiser, R., Bolinger, M., & Barbose, G. (2017). The climate and air-quality benefits of wind and solar power in the United States. Nature Energy, 2(9).


Burney, J., Woltering, L., Burke, M., Naylor, R., & Pasternak, D. (2010). Solar-powered drip irrigation enhances food security in the Sudano–Sahel. Proceedings of the National Academy of Sciences, 107(5), 1848–1853.


IEA/IRENA. (2017) Perspectives for the Energy Transition – Investment Needs for a Low-carbon Energy System. Paris/Abu Dhabi: IEA/IRENA.