How Intellectual Property Impacts Renewable Energy Adoption

The United Nations estimates that, in order to meet the goals set by the Paris Agreement, between 70 and 85% of the world’s electricity must come from renewable energy sources by 2050. In order to meet this target, public and private entities must leverage their unique strengths while working together. Intellectual property plays an important role in these partnerships and technology transfer in general, especially when implementing renewable energy in developing countries.

Public and Private Investment

Governments entered into the Paris Agreement, so in many ways it is up to them to uncover and implement strategies for increased reliance on renewables. They can fund research at government facilities and universities, offer subsidies to end-users, and grant and honor patent protection. 

Some of the countries and regions with the largest number of patents in renewable energy technology, which we can assume to be an early indicator of both environmental and economic benefits, also have a high percentage of private investment in the industry. For example, 60% of renewables R&D funding in the United States was from private sources in 2009. From 2010 to 2019, the country published 6,300 renewables international patent applications, eclipsed only by Japan. China published 2,659 international patent applications for renewables from 2010 to 2019, behind only Japan, the United States, Germany, and the Republic of Korea. In 2009, 72% of renewables R&D funding in China came from private entities. 

The promise of patent protection for renewable energy inventions that are novel and nonobvious encourages this type of private financing. Once companies are granted patents, they can begin to reap the benefits of protected intellectual property rights. This may be through additional investments, licensing agreements, commercialization, or other patent monetization strategies. While these benefits exist within most—if not all—industries, governments committed to the Paris Agreement have even more reason to encourage private companies to take advantage of them for renewable energy technologies. 

Renewable Energy IP Trends

Patenting around renewable energy technologies boomed during the first decade of the 21st century. Patent applications have slowed over the last few years as the public and private sectors focus on commercializing their granted patents. The cost of implementing these maturing technologies is decreasing, thanks to improved performance, healthy competition, and government subsidies and other incentives. Countries are beginning to realize the benefits of renewable energy beyond minimizing climate change, including economic growth and national security. 

One of the barriers intellectual property may present as countries race to meet the goals of the Paris Agreement is technology transfer. In order to mitigate climate change, renewables must be available worldwide, not just in wealthy, developed countries. Weak IP protection not only keeps individuals and organizations from innovating in developing countries but limits the diffusion of technology as well. Businesses may be hesitant to enter developing markets because of the risk it poses to their IP. However, these regions may present a unique opportunity for renewable energy given their natural resources and lack of legacy infrastructure.