Alternative Energy Tax Credits - Green Energy Cost Savings

Alternative energy fuels drive renewable power systems, integrating hydrogen, biofuels, and electricity with power electronics, smart grids, and energy storage for efficient conversion, decarbonization, and resilient distribution across modern electrical networks.

What Are Alternative Energy Fuels?

Alternative energy fuels are renewables—hydrogen, biofuels, electricity—supporting conversion and smart grid integration

✅ Power electronics convert DC/AC and manage grid-tied renewables.

✅ Fuel cells and hydrogen storage integrate with microgrids.

✅ Battery systems and EMS stabilize variable solar and wind.

Alternative energy fuels can help reduce harmful greenhouse gas emissions produced from traditional gasoline or diesel fuels. Using alternative energy fuels means that you might have to change your conventional vehicle in for a more environmentally-friendly ride. Is this true? Let's find out. To start, a quick primer on what alternative energy is can clarify terms and set expectations in practical terms.

Alternative Energy Fuels - Battery-electric Vehicles

Your first option is battery-electric vehicles (BEVs), which powered by motors that draw electricity from on-board storage batteries. These batteries act as an engine to propel the motor. Using electric vehicles presents a great potential to reduce greenhouse gas (GHG) emissions and smog-forming pollutants because pollution isn't produced from the tailpipe or through fuel evaporation. The vehicles can also have low overall (life-cycle) GHG emissions depending on the electricity source used to recharge the batteries. This option would require you to say goodbye to your conventional vehicle. When charged from renewable energy sources, BEVs can further minimize lifecycle emissions and operating costs.

Alternative Energy Fuels - Hybrid-electric Vehicles

If you don't necessarily want to give up your conventional vehicle, but still want the environmental and energy benefits of electric vehicles, then hybrid electric vehicles (HEVs) are your best option. HEVs are made up of a battery powered electric motor with combined with a conventional internal combustion engine. Instead of paying outrageous gas prices every time your gas tank nears the empty mark, a rapid refueling option recharges your conventional vehicle. If this alternative energy fuel option appeals to you then you'll be glad to know that many hybrid vehicle models are already widely available on the market, with many more manufacturers planning on introducing new hybrid electric/gasoline vehicles in the next few years. Many buyers also view HEVs as pragmatic alternative energy solutions that ease the transition away from full reliance on gasoline.

Alternative Energy Fuels - Fuel Cells and Hydrogen

If you are using a portable or a stationary power device, then fuel cells might be the ideal option for you. Electricity is generated in fuel cells electrochemically when hydrogen and oxygen are combined. Fuel Cells can produce zero or very low emissions depending on the source of the hydrogen. These energy-conversion devices can also utilize hydrogen and other fuels and, in the future, might be used for transportation applications. This alternative energy fuel source is also an option for vehicles and prototypes for hydrogen fuel cell vehicles that are currently in the works. But, unfortunately, barriers exist. A lack of a hydrogen distribution infrastructure has made it difficult for this alternative energy fuel source to move ahead. Also, costs are high for fuel cells and hydrogen-production technologies and there are challenges related to hydrogen storage. However, fuel cells are a viable energy technology that can offer significant environmental, supply, economic and energy efficiency benefits because of the variety of fuels available for conversion to hydrogen. This pathway fits within the spectrum of alternative energy sources, each with distinct infrastructure and cost considerations.

For a broader perspective on where hydrogen, electricity, and fuels like bioenergy fit, explore the major forms of alternative energy and how they complement one another across sectors.

Alternative Energy Fuels - Ethanol

When scientist Dr. Emmett "Doc" Brown used food to add fuel to his gas tank in the famous ‘80s flick, Back To The Future 2, he must have been thinking of ethanol, a liquid alcohol made of oxygen, hydrogen and carbon obtained from the fermentation of sugar or converted starch contained in grains and other agricultural or agri-forest feedstocks. Using fuel ethanol (or gasohol, which means that the alternative energy fuel source is distilled and dehydrated to create a high-octane, water-free alcohol) might one day be a viable alternative energy fuel source. However, oral consumption is unadvised because this alternative energy fuel is made unfit for drinking when a small amount of a noxious substance such as gasoline is added. In order for fuel ethanol to work as an effective alternative energy fuel source, all traces of water must be removed because water and alcohol combined cannot dissolve in gasoline. Further research into technology to produce ethanol from non-food sources is quickly moving this alternative energy fuel source toward commercialization. Because many feedstocks derive from crops and residues, ethanol often intersects with biomass energy pathways and agricultural policy.

Alternative Energy Fuels - Biodiesel

Conventional diesel combustion harms the environment, but biodiesel combusts better with a higher cetane rating that produces fewer life cycle greenhouse gas emissions (GHG). This alternative energy fuel source is a non-toxic and biodegradable fuel that comes from vegetable oils, animal fats, waste cooking oil, or tall oil (a by-product from pulp and paper processing). Biodiesel is made from these feedstocks through transesterification, a process that reacts the oil with an alcohol (methanol is usually used, but so can ethanol) and a catalyst (eg. sodium hydroxide). Glycerine, an ester called biodiesel, is produced from this chemical reaction. Most biodiesel is generated using this method. In practice, successful biodiesel programs are often part of broader renewable alternative energy strategies that leverage regional feedstocks and local distribution.

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• Alternative Energy Channel

Forms of alternative energy span solar, wind, hydro, geothermal, and biomass, engineered with power electronics, inverters, and grid-tied systems for efficient generation, storage, and distribution across smart grids and microgrids.

What Are Forms of Alternative Energy?

They include solar PV, wind, hydro, geothermal, and biomass, converted via generators, inverters, and grid storage.

✅ Solar PV: MPPT inverters convert DC modules to AC for the grid.

✅ Wind: variable-speed turbines use converters to regulate frequency and voltage.

✅ Hydro, geothermal, biomass: dispatchable sources aid grid stability and storage.

Forms of Alternative Energy - Solar Energy

The sun is one gigantic star that constantly radiates an enormous amount of energy (solar energy). How much is "enormous?" Well, let's just say that the sun sends out more energy in one second than Earth has used since the beginning of time. Like most stars, the sun is a huge ball of gas made up mostly of helium gas and hydrogen. As a primer on solar technologies, the resource at solar power fundamentals offers context for how these systems scale.

The Earth, being the third planet from the sun, only receives a small portion of the sun's solar energy, however, that amount is more than enough to supply all our electric power needs. For comparisons across resources, see renewable energy sources to understand how solar's potential relates to wind, hydro, and more.

Two ways to make electricity from solar power are photovoltaic and solar thermal systems. Photovoltaic electric generation is produced using photovoltaic (PV) cells: the sunlight hits the solar cell and converts sunlight into electricity instantly and silently--without the hassle of wearing out any mechanical parts. These solar systems are mainly used to generate power in areas that are a long distance from electric power lines. For configurations and component choices, alternative energy systems guidance explains typical PV setups used off-grid and in hybrid applications.

Solar thermal systems (or concentrated solar power) use a solar collector with a mirrored surface to focus sunlight onto a receiver that heats a liquid into steam and then turned into electric power. The process is in the same vain as coal plants: coal is burned into steam, which is then turned into electricity. Deployment considerations are explored in alternative energy solutions that compare CSP with other utility-scale options.

Solar power is expected to be a global supplier of electricity between 2015 and 2020. Solar power's benefits are phenomenal: it's free, its supply can never deplete, it doesn't pollute, and it doesn't damage the environment. These benefits underpin broader renewable alternative energy strategies that accelerate decarbonization across sectors.

Forms Of Alternative Energy - Wind Energy

The sun’s heat reaching the planet earth creates winds, which makes wind a form of solar energy. How does it work? Well, as the sun's rays heat the Earth’s air is heated by the sun, it expands and regions of high and low pressure are formed, these high and low movements create wind energy. For context on definitions and categories, what is alternative energy clarifies how wind fits within the broader mix.

Harnessing wind energy is done using contraptions such as wind turbines. Large wind turbines are built close together to operate on wind farms to produce large amounts of power for electrical utilities. Smaller small wind turbines can be used by homeowners and remote villages who want to generate their own electricity.

Generated Wind power, like other forms of alternative energy, can also be used for charging batteries, pumping water, or grinding grain. All of this can be done without causing greenhouse gas emissions which damage the environment. This form of alternative energy also uses minimal land area, but intermittent wind patterns make it difficult for this form of alternative energy to be a constant and reliable energy source.

Forms of Alternative Energy - Biomass Energy

Biomass energy is a way to turn your food waste into electricity. Biomass is any kind of organic matter (anything that was once alive) that can be used as an energy source. Besides food waste, crops, wood, animal and yard waste are examples of biomass. People have used this form of alternative energy for thousands of years - longer than any other energy source.

Biomass feedstock (farm animal wastes, crops and residues, etc.) is the main ingredient of biomass energy. The heat in this form of alternative energy is used to generate power, fuels and other energy options. The biomass fuels (or biofuels), which comes from biomass feedstock, can be used in a solid, liquid, or gas state. Disposed food, paper, sewage, lawn clippings and sawdust, are some available biomass energy resources used for power production.

Forms of Alternative Energy - Geothermal Energy

Geothermal is a Greek word: geo (earth) and therme (heat). This form of alternative energy comes from the heat, which is from the earth's core (almost 4,000 miles beneath the earth’s surface). Earth's double-layered core is made from melted rock (hot magma), which surrounds a solid iron center. The heat comes from the slow decay of radioactive particles produce high temperatures that constantly rise to the earth's surface. Geothermal electricity is created by pumping a fluid (oil or water) into the Earth, allowing it to evaporate and using the hot gases vented from the earth's crust to run turbines linked to electrical generators. Further technical detail is summarized in geothermal energy basics for readers interested in plant designs and resource types.

In some areas on the planet (such as Iceland), there is very hot water or steam that is close enough to the surface where this alternative energy resource can be reached economically with a drill. When obtained, the steam, or hot water flashed to steam, turns a turbine, which then, turns a generator that produces electricity. Many experts believe that geothermal energy only be a minor contributor to the global energy supply because of the scarcity of geothermal sites in the world.

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Alternative Energy Solar Power converts sunlight via photovoltaics into electricity using PV modules, inverters, MPPT, and battery storage for grid-tied systems, microgrids, and off-grid resilience, improving efficiency, reliability, and decarbonization.

What Is Alternative Energy Solar Power?

A renewable electrical system converting solar irradiance to AC via PV modules, MPPT inverters, and optional storage.

✅ PV arrays generate DC; power electronics regulate voltage and current.

✅ Inverters with MPPT perform DC–AC conversion, grid sync, and protection.

✅ Battery storage and EMS enable peak shaving, backup, and microgrid control.

Alternative energy solar power is, perhaps, the first energy source that comes to mind when most people think of alternative energy sources, but — unlike wind — alternative energy solar power is still a long way from being considered a mainstream source of electricity generation. In fact, it accounts for less than one per cent of the world’s electricity production. For readers new to the topic, what is alternative energy clarifies key definitions and the role solar plays among emerging options.

Two main ways to harness the sun's energy to generate alternative energy solar power include: photovoltaic (PV), where solar cells directly convert sunlight into electricity, and solar-thermal power. PV is a proven alternative energy solar power technology that is most appropriate for small-scale applications to provide heat and power to individual houses and businesses. Sunlight falls on a layer of semiconductors, which excites electrons. This, in turn, creates an electrical current that can be transmitted via electrical cables to serve useful applications. Alternative energy solar power solar PV cells are already cost effective for powering houses and businesses in some regions. As with alternative energy wind power, costs have reduced in the past few years thanks to technological developments. But, unlike alternative energy wind power, however, large scale electricity production using alternative energy solar power costs about 22 cents per kilowatt-hour, significantly more expensive than its fossil fuel generation competitors and nuclear power. Comparative cost and performance data across technologies are summarized in alternative energy power, which details where PV is most competitive.

Solar-thermal energy is a completely different technology. It collects and concentrates the sun's rays to heat up fuel such glycol or any other liquid that heats up easily. The heat trapped within this medium is then used transferred through a heat exchanger so that heated water can be used for regular hot water applications like bathing and space heating and heating swimming pools, etc. Fossil fuels are sometimes used as a back-up to heat the water in the boiler if the sun is not shining and cannot heat the system. There are three different methods for concentrating the sun’s rays:

• Parabolic Trough — This method uses long, parallel rows of glass mirrors in the shape of a trough to concentrate the sun’s rays directly at the “absorber tube," which is often filled with oil, to achieve maximum effect.
• Power Tower — Similar in principle to parabolic-trough technology, the mirrors are placed in a circular pattern. At the center of the circle is a tower, at the top of which is a receiver filled with water, air, liquid metal or molten salt that moves to a power block and is used to power a steam turbine.
• Parabolic Disk System — In this system, dishes rather than troughs are used to concentrate the power of the sun.

To see how these concentrating approaches integrate with storage, controls, and grid interconnection, alternative energy systems offers design-level guidance for practitioners.

Advantages of Alternative Energy Solar Power

In spite of its cost versus other sources of energy, alternative energy solar power is attracting interest due to the following:

• Alternative energy solar power makes use of a renewable natural resource that is readily available in many parts of the world.
• The process used to generate alternative energy solar power is emission-free.
• Costs have greatly reduced thanks to technological advances in solar power technlogy to a point that it can compete with fossil fuel alternatives in specific circumstances.
• The technology is scalable in that it can be used for domestic heating purposes or on a larger scale for commercial electricity generation, as solar water heaters are an established technology, widely available and simple to install and maintain.

For a deeper dive into real-world performance benefits, case studies in advantages of solar power highlight emissions reductions and lifecycle savings.

Disadvantages of Alternative Energy Solar Power

The biggest barriers to increasing alternative energy solar power generation are the cost, the amount of land required for large-scale electricity production, and the intermittent nature of the energy source. In terms of the latter, thermal systems do not work at night or in inclement weather. Storage of hot water for commercial or domestic use is simple because only insulated tanks are needed, but further technology advancements are required to improve storage for the higher-temperature liquids required to generate electricity on a large scale and storage of the electricity itself. Emerging roadmaps in alternative energy solutions discuss thermal storage media and hybrid configurations that mitigate intermittency challenges.

Outlook for Alternative Energy Solar Power

Although alternative energy wind power is more economical and has been more widely adopted for large-scale power production than solar energy, solar energy is the most flexible in scale and application. It also is widely available and an environmentally benign source of alternative energy. Broader market drivers and renewable policy trends are tracked under renewable alternative energy, providing useful context for long-term solar adoption.

It is currently a $7 billion per year business that is growing at 40 per cent per annum. As part of the wider clean-energy portfolio, the taxonomy in forms of alternative energy situates solar alongside complementary technologies.

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Alternative energy cost analyzes LCOE, CAPEX, OPEX, and grid parity across solar PV, wind turbines, and battery storage, considering efficiency, load factors, and grid integration to optimize system design and lifecycle economics.

What Is Alternative Energy Cost?

Alternative energy cost is LCOE-based pricing for solar, wind, and storage, reflecting CAPEX, OPEX, and grid impacts.

✅ Uses LCOE comparing PV, wind, and storage across duty cycles.

✅ Includes CAPEX, OPEX, maintenance, and financing assumptions.

✅ Evaluates grid integration, curtailment, and reliability metrics.

Alternative energy cost is determined by how utilities typically set their rates and account for the cost differential between alternative energy and conventional energy sources. Basically, cost recovery of a utility’s investments and operating expenses determine electricity rates. For background on definitions and resource types, see this overview of what is renewable energy to align terminology across programs.

These alternative energy costs include:

Understanding the breadth of technologies captured under renewable alternative energy helps clarify why cost components vary by resource.

• owning generation
• owning transmission and distribution assets
• a return on owned assets
• purchased power contracts
• recovery of various operating expenses, including fuel costs, maintenance, and administration.

  Costs for generating, transmitting, and distributing electricity are in a utility’s rate. Because utility costs are bundled together, all generation resources are combined to create a utility “system mix” of generation. In other words, utilities do not normally distinguish between individual generation sources for their customers. Therefore, an equivalent mix of the utility’s generation resources and purchased power is provided to each customer. In practice, product structures for alternative energy power are designed to work within this system mix paradigm.

  For alternative energy cost determination, utilities and regulators are interested in separating the specific alternative energy costs related to securing green power. In this way, green power products are unique, differentiated electricity products. Since customer participation is voluntary, only those customers that choose to sign up for these programs pay the incremental costs. Alternative energy power program participants typically pay the higher alternative energy cost in the form of a premium on their monthly bill. In some jurisdictions, available alternative energy incentives help offset premiums for early adopters.

  Four Main Components In Determinating Alternative Energy Cost

• 1. The cost of the alternative energy source. This includes the total cost of electricity and/or environmental attributes from all alternative energy resources used in the product, whether from wind, solar, geothermal, biomass, or another source, and whether owned by the utility or acquired through a power purchase contract. For example, cost trajectories for alternative energy solar power have declined sharply in recent years due to technology improvements.
• 2. Program implementation costs. Any additional alternative energy costs attributed to implementing the alternative energy program, including administration and marketing. Utilities sometimes leverage alternative energy grants to defray outreach and administration expenses.
• 3. Ancillary services costs. The additional costs incurred to integrate variable output resources, particularly wind, into a utility’s system.
• 4. Displaced utility generation (and capacity) resource costs. The renewable resource displaces electricity that the utility would otherwise have generated or purchased.

   

  In conclusion, alternative energy costs can be represented as: Alternative energy premium = (1) + (2) + (3) – (4)

  Alternative Energy Cost Determination

  Alternative energy costs are captured through the specific power purchase agreements for alternative energy (in this case, the term alternative energy is interchanged with renewable energy) or RECs (renewable energy contracts), or through the regulatory approval process for utility-owned renewable projects. As long as these are tracked separately from the rest of the generation mix, the appropriate alternative generation costs can be determined. However, generation costs are hard to determine because it's uncertain how many customers plan to enroll in the program and how long they plan to participate. In electric markets that have not gone through restructuring from the electric industry, contracts for generation are typically long-term (10 years or more), and investment in owned facilities is generally considered to be for the life of the facility (20 years or more). For readers new to key terms and market structures, this primer on renewable energy facts provides helpful context for interpreting contract and REC pricing.

  The long-term nature of the resource commitment severely contrasts with the program subscription commitment required of most customers. Most alternative energy programs do not require that customers enroll for a specific term, much less sign up for 10 or 20 years to match the facility or contract life of the renewable power supply source. Therefore, while the annual cost of renewable energy is straightforward to determine, the utility faces some level of risk that will likely be reflected in the product pricing.

  However, if the utility is also subject to a renewable portfolio standard and is therefore required to procure a certain fraction of renewable energy for its overall load, there may be less risk, because the utility has greater flexibility in managing its overall renewable portfolio between its compliance and voluntary program obligations.

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Alternative energy incentives accelerate grid decarbonization via tax credits, rebates, net metering, and grants for solar, wind, storage, power electronics, microgrids, and smart grid upgrades, reducing LCOE and supporting EV charging infrastructure.

What Are Alternative Energy Incentives?

Incentives—tax credits, rebates, net metering—finance clean electrification, grid upgrades, and storage to cut costs.

✅ Lowers LCOE for solar PV, wind, and battery storage projects

✅ Supports grid modernization, smart inverters, and microgrid controls

✅ Enables EV charging, demand response, and power electronics R&D

Alternative energy incentives encourage companies to pursue non-fossil-fuel energy as a way to consume power. Different countries have different alternative energy incentive programs available for businesses and residences through country, state/province, or municipality levels. However, in this article, alternative energy incentives for business take the center focus. For background on definitions and technologies, see this overview of what constitutes alternative energy and typical market drivers.

In the U.S., two alternative energy incentives available are the investment tax credit and the production tax credit (both can be claimed on a taxpayer’s federal income tax return). A third incentive is a grant program that gives businesses opportunities to receive cash payments from the government for purchasing alternative energy property. Detailed federal and state guidance on credits is summarized in this resource on renewable energy tax credits for common project types.

The investment tax credit, the energy production tax credit or the federal energy grant cannot be claimed in tandem, meaning that a taxpayer can only choose one of these alternative energy incentives. Obviously care will need to be taken in deciding which alternative energy incentive will be best for a specific taxpayer.

Many businesses model total installed cost and depreciation using these alternative energy cost references before selecting an incentive.

While incentives are available They are available for both businesses and individuals; and they can be found at the federal, state and local levels, as well as with utility companies and product manufacturers. A concise primer on renewable alternative energy helps stakeholders align technologies with applicable programs.

1. Alternative Energy Incentives - Investment Tax Credit

A taxpayer can claim a tax credit equal to thirty percent of the cost of qualified eligible energy property placed in service. For credit calculations and eligibility nuances, consult this guide to alternative energy tax credits and common compliance pitfalls.

Property eligible for this alternative energy incentive are:

• Solar property,
• Geothermal property,
• Qualified fuel cell property,
• Stationary micro turbine property,
• Combined heat and power system property,
• Qualified small wind energy property, and
• Geothermal heat pump property

  The federal tax credit is not considered to be taxable income; however, the cost basis of the energy property will need to be reduced by one-half of energy credit claimed. The investment tax credit is also subject to an alternative minimum tax limitation. The credit cannot reduce a taxpayer’s regular tax below the taxpayer’s alternative minimum tax. Any unused credit can be carried back one year and forward twenty years. Case studies of successful deployments in solar, CHP, and wind are profiled among these alternative energy projects to illustrate basis and credit interactions.

  A percentage of the investment tax credit will have to be recaptured if the energy property is disposed of within five years of being placed in service.

2. Alternative Energy Incentives - Production Tax Credit

A taxpayer can claim a tax credit equal to a percentage (between .0075 cents and 2.1 cents per kilowatt hour) of energy generated from qualified energy resource property placed in service. The credit can be claimed for a ten year period starting with the date that the energy resource property is placed in service.

Eligible energy resources for this alternative energy incentive include:

• Geothermal or solar energy,
• Wind,
• Open-loop biomass,
• Closed-loop biomass,
• Marine and hydrokinetic renewable energy

   

• Small irrigation power,
• Qualified hydropower production, and,
• Municipal solid waste

  Unlike the investment tax credit, the cost basis of energy property does not have to be reduced by the production tax credit claimed. In addition, for facilities that generate electricity, there is no alternative minimum tax credit limitation for the first four years that a facility is placed in service.

  Similar to the investment tax credit, an unused energy credit can be carried back one year and forward twenty years.

3. Alternative Energy Incentives - Grant For Specific Energy Project Investments

This grant program offers cash payments to eligible taxpayers who place in service specific energy properties. Only taxpayers that are in a trade or business can qualify for this grant, which means that a residential energy-efficient property does not qualify. Application procedures and deadlines are outlined in these alternative energy grant resources for business applicants.

The grant is in lieu of the aforementioned alternative energy incentives, meaning that a taxpayer can apply for the grant or claim one of the business tax credits, but not both.

The following persons are not eligible to receive payment:

• Federal, state or local governments,
• Non-profit organizations,
• Cooperative electric companies.

   

  Property eligible for this alternative energy incentive are:

• Solar property,
• Geothermal property,
• Qualified fuel cell property,
• Stationary micro turbine property,
• Combined heat and power system property,
• Qualified small wind energy property, and
• Geothermal heat pump property

   

The cost basis on which the payment is based upon is its original cost and, which includes all costs. These costs, such as installation and cost of freight, are part of property’s depreciable basis.

The investment tax credit, which is similar to the above alternative energy incentive, the cost basis of the energy property has to be reduced by fifty percent of the grant received. In addition, to the extent that specified energy property is disposed of within five years of being placed in service a percentage of the grant will need to be recaptured.

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Alternative energy solutions leverage renewables like solar PV and wind turbines, with battery storage, smart grids, power electronics, and advanced inverters enabling grid integration, microgrids, load balancing, and high-efficiency electrical systems.

What Are Alternative Energy Solutions?

Systems using renewables, storage, and power electronics to provide efficient, reliable, grid-integrated electrical power.

✅ Power electronics: MPPT, inverters, converters for grid-tied PV and wind.

✅ Energy storage and EMS for frequency regulation and peak shaving.

✅ Smart grids, microgrids, protection, SCADA, and IEC 61850.

Why are alternative energy solutions so important? Fossil fuels, such as coal and oil, continue to contribute to the ever-growing pollution in the environment by producing carbon dioxide and other harmful chemicals, which causes further damage to Earth's atmosphere by increasing the hole in the layer of the upper atmosphere (the ozone layer). The ozone layer, which protects Earth's inhabitants from the sun's radiation, prevents the snow in the Northern and Southern atmospheres from melting. These increased atmospheric temperatures, known as global warming, is a concern for governments all over the globe because flooding could occur on such catastrophic levels (much of North America, Europe and other parts of the world would be under water and countless lives would be lost). So, many of the world's nations are rallying together to reduce their fuel consumption and dependency on fossil fuels and find other alternative energy solutions. For readers new to the topic, see this overview of what constitutes alternative energy to understand how these technologies differ from conventional fuels.

According to the U.S. Department of Energy, fossil fuels currently give the U.S. more than 85 per cent of all consumed electric power and almost all of consumed transportation fuels. DOE points out that the likelihood that America's reliance on fossil fuels will continue to increase over the next two decades as the economy expands--even with aggressive development and deployment of new alternative energy technologies. In parallel, DOE and industry roadmaps highlight the role of renewable alternative energy in moderating long-term demand growth.

What does this mean? Energy is essential to economic growth. Without adequate energy supplies, a world population of six to ten billion people would not be possible. Every human life and every sector of the economy requires energy and even the most basic needs of humanity (such as food and water) could not be supplied without adequate energy supplies. Diverse renewable energy sources can help meet these fundamental needs while reducing environmental and supply risks.

For any alternative energy solution to be successful in today's marketplace, it must provide more energy than other large energy sources (fossil fuels and natural gas), which presents a formidable challenge. Why? Most of today's energy sources are already considered difficult to satisfy current demand. The difficulty doesn't exist in the resource being too small, but the challenge is to maintain a high rate of growth necessary to keep up with demand. How is this to be done? Here are some alternative energy solutions. For a broader primer on technology categories, explore the principal forms of alternative energy described by industry educators.

Alternative Energy Solutions - Hydro Power

Hydroelectricity is a well-established and cost-effective form of alternative energy. This alternative energy solution has helped support energy-intensive industries like rely on cheaper forms of electricity. Hydro Electricity also plays an important role in energy storage, but, hydro energy's potential won't be enough to power the global economy on hydroelectricity. However, hydro-electric energy projects will continue to be deployed wherever the resource is readily available. Readers can compare hydro with other options by reviewing key alternative energy sources and their typical applications.

Alternative Energy Solutions - Solar Power

Solar energy hasn't gone large scale mainly due to cost and distribution issues, but that hasn't stopped solar energy companies from making investments. In fact, recent expansions have resulted in 265 megawatts of energy and more than two billion dollars of investment in the U.S. economy. When cost isn't such a major factor, it's expected that solar energy will play a larger role in the world economy. Solar energy, particularly in thee electricity sector, will have to become much more cost efficient before it can compete with other energy resources. While there is no obvious floor to the price of solar energy, progress in the last few decades has been slow. Another factor affecting cost is electricity storage, which, at present, is not currently available to meet immediate high energy demands. But, if cost becomes roughly three times cheaper than other electricity sources that satisfy immediate demand, then solar energy stands a chance of becoming a major energy source. It's expected that prices will decrease dramatically with emerging solar technologies, such as photovoltaic cells. It remains be seen, however, if these reductions can give solar energy the competitive edge in the world economy. For technology pathways and case studies, see this guide to alternative energy solar power and its emerging cost trends.

Alternative Energy Solutions - Wind Power

Wind energy is helping many nations meet their ever-growing energy demands. Today, wind energy provides the U.S. with enough electricity to power over 9.7 million American homes. And, according to the National Renewable Energy Laboratory (NREL), there is a potential of 37 trillion kilowatt-hours of electricity that could be used to power the U.S. annually——nearly 10 times the country’s existing power needs. At the moment, there are over 400 American manufacturing plants that build wind components including blades, towers and other major turbine components. Plus, new wind energy manufacturers are currently coming online, being announced or expanding (over 100 since 2007). However, wind energy requires further development in technologies before they are ready to operate at full scale. Grid planners often analyze how alternative energy power integrates with reliability standards and transmission upgrades.

Alternative Energy Solutions - Geothermal Power

The geothermal potential is very large. At the moment, the technology for this alternative energy solution is limited to special locations (such as Iceland, Kenya and locations in California) with very steep thermal gradients, resulting in very large temperature differentials between the surface and the geological reservoir. For the time being, many of the possible energy resources are simply not large enough to operate at the scale necessary to satisfy a substantial fraction of the world’s energy demand. In some cases, like wind energy, the locations are large enough, but raise serious questions about the environmental impact of large-scale deployment.

What is the best alternative solution?

Governments continue to strive to find one energy solution that can power the world, but it might be that a collaboration of alternative energy solutions is best to saving the world.

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