Whereas fossil fuels are exhaustible, renewable energy sources - water (hydropower), biomass, wind, heat from the earth (geothermal), and the sun (solar energy) - regenerate and can be sustained indefinitely. "Green" renewables contribute much less to global warming and climate change by offsetting fossil fuels used to generate electricity.

The use of renewable energy is not new. Five generations (125 years) ago, wood supplied up to 90 percent of our energy needs. Due to the convenience and low prices of fossil fuels, wood use declined. Now, the biomass which would normally present a disposal problem is converted into electricity (e.g., manufacturing wastes, rice hulls, and black liquor from paper production).

Renewable Energy Consumption in the Nation's Energy Supply, 2005

Renewable Energy Consumption Increases. Renewable energy consumption increased 2 percent from 2004 to 2005, while total U.S. energy consumption remained flat at 100.94 quadrillion btu. There were increases in coal and petroleum demand domestically, however declines in both natural gas and nuclear energy offset their growth.

The electric power and industrial sectors continued to have the largest portions of renewable energy consumption with 56 and 29 percent of the market respectively. However, renewable energy consumption in the transportation sector has been on an upward trend since 2001, and increased 17percent between 2004 and 2005. Growth in renewable transportation fuels ethanol and biodiesel has powered this growth.

Biomass consumption increased by 3.2 percent, or 102 trillion Btu in 2005. Wood energy in the industrial sector and alcohol fuels in the transportation supported the growth. Wood energy consumption in the residential sector continued to trend upward at 2.4 percent between 2004 and 2005.

Wind energy used to generate electricity increased 26 percent from 2004 to 2005. This form of renewable energy now accounts for nearly 5 percent of all renewable energy resources consumed by the electric power sector.

Consumption of geothermal and solar renewable energy resources grew from 2004 to 2005.

Overall, U.S. electricity generation increased 2.1 percent to 4,055 billion kilowatt hours from 2004 to 2005. Contrasting from its last year generation number, electricity generated from renewable energy rebounded and showed exceptional growth. U.S. electricity generated from renewable energy in 2005 was 365 billion kilowatt hours, an increase of over 7 billion kilowatt hours.

Solar Thermal Collectors / Solar Photovoltaic Cells and Modules. Shipments of solar photovoltaic (PV) cells and modules continued to show strong growth during 2005. PV cells and module shipments increased 25 percent, from 181,116 (2004) to 226,916 (2005) peak kilowatt hours. Continuing its upward growth trend from 2004, shipments of PV cells and modules during 2005, broke the previous record high set in 2004.

The total value of photovoltaic cell and module shipments grew around 40 percent to $701 million in 2005. The average price for modules (dollars per peak watt) increased 6.6 percent, from $2.99 (2004) to $3.19 (2005).

Shipments of solar thermal collectors increased 13.6 percent in 2005 to 16,041 million square feet, even as the number of companies producing solar thermal collectors declined slightly. Domestic shipments of solar thermal collectors for 2005 were 14.6 million square feet, a 10 percent increase from 2004's 13.1 million square feet. Exports gained 67 percent, while imports increased 22 percent from 2004 to 2005. The number of companies importing or exporting solar thermal collectors increased by one in 2005, peaking at 26.

Material costs, growing slightly faster than efficiency and production economies of scale, have led to marginal increases in the price of solar thermal collectors. The average price for total shipments increased nearly 18 percent, from $2.43 in 2004 to $2.86 (per square foot) in 2005. The residential sector continued to be the prime market for solar collectors, totaling 16 million square feet, 92 percent of total shipments. The largest end use for solar collectors shipped in 2005 was for heating swimming pools, consuming 15.0 million square feet and 94 percent of overall enduse.

Geothermal Heat Pumps. Manufacturers shipped 47,830 geothermal heat pump units in 2005, a 9.2 percent increase from 2004 (43,806). This represented the largest number shipped since EIA began tracking geothermal heat pump shipments in 1999. The total rated capacity of heat pumps shipped in 2005 was 160,402 tons, reflecting continued growth from 2004, which was 144,301 tons. The average unit size shipped in 2005 increased to 3.4 tons; this is a slight increase from 3.29 tons in 2004.

Green Pricing Participation Increases. Green pricing/marketing programs allow electricity customers to pay the additional costs for renewable energy through direct payments on their monthly bills. In 2005, the number of electric industry participants reporting customers in green pricing programs was 442, up 9.6 percent from 2004. Residential customers accounted for 92 percent of the total green pricing customers in 2005. As of 2005, Ohio had the largest number of green pricing customers at 402,433. While Ohio's 2005 customer population declined 11 percent Florida, Maryland, New York, Rhode Island, and Vermont experienced substantial gains in customers participating in green power programs.

U.S. Green Pricing Customers by Top 5 States, 2005

How Renewable Energy Is Produced and Consumed. The sun produces predictable flows of energy that can be converted to other energy forms, such as electricity and heat, or stored in biomass. Clouds, the daily pattern of light and darkness, seasons, and dust in the air greatly affect the fraction of sunlight which is available. The sun's rays must fall on a relatively large area for enough heat to be collected for conversion to electricity; a "concentrating collector" can be used to focus the rays onto a much smaller area.

Solar energy can also be directly converted into electricity by means of photovoltaic cells (based on the element silicon). Photovoltaic systems generate electricity which may be used for lighting and appliances or stored in batteries. In nations with underdeveloped electricity networks, photovoltaic systems may be chosen because they can provide small amounts of electric power.

The major economic application of solar energy is heating residences and other buildings. Solar collectors, often seen on rooftops, are used for hot water, space heating, and heating swimming pools. However, backup heating systems are generally needed.

Electricity from modern windpower has been demonstrated using technologically advanced wind turbine designs. Steady winds at 12 miles per hour or higher are needed for commercial electricity generation. Such conditions occur in many places in the United States.

Biomass, formed when the sun shines on plants and trees, can be burned, providing heat for homes and fuel for boilers. Electricity generators burn wood chips, sawdust, garbage, bagasse (a plant refuse), and low-quality methane gases from landfills, but supplies are limited by distance to the generator (a maximum of about 50 miles; distance increases costs and decreases profits) and by the mass that would be removed from the topsoil (a form of erosion). Another widely available fuel source is the biomass from corn; this is fermented into alcohol (ethanol) and the alcohol is used to replace automobile fuel (by blending with gasoline). Another biomass is oil is extracted from soybeans that is blended with diesel. Biomass burning for cooking and heating, especially in underdeveloped nations, may contribute to global warming and erosion.

Geothermal energy comes from natural processes beneath the earth's surface, and is recovered as steam and hot water. Known geothermal resource areas are rare, with the 2005 domestic geothermal capacity of 2,285 megawatts (MW) at much less than 1 percent of 2005 total U.S. electric net summer capacity from all fuel sources. Most domestic electricity from geothermal energy is generated in California, other western States, and Hawaii. The world's largest geothermal facility and the first commercial-scale development tools placed in California are at The Geysers, a 10-megawatt unit owned by Pacific Gas & Electric. Direct-use of geothermal energy for aquaculture, health spas and district heating continues to grow, as do installations of geothermal heat pumps.

More information can be found in the following EIA publications: Renewable Energy Annual; Annual Energy Review; Monthly Energy Review, Electric Power Annual, Annual Energy Outlook, and Short-Term Energy Outlook.