Game-overSome people might think that the recent drop in oil price is bad for the solar industry, that it'll slow down investment and reduce demand for clean energy. There might be some truth to that in the short-term, but the long-term trend is clear: Solar is going to take over the world.
Why? Because of this:
[The chart above] shows the price of various energy sources since the late 1940s, and as you can see, at that scale there isn't much variation. Even oil's big moment in the 1970s embargo and in the recent years look like pretty small bumps in the road. And then you have solar power that comes in crashing down toward the end. Before then it wasn't even on the charge because the price was above the shown range. (source)
The price of solar has been falling so far for so long, and nothing is even hinting that it'll stop falling, so over time, it'll come to dominate just on that basis alone (even if we remove incentives).
Now a new report from the National Bank of Abu Dhabi, as you can imagine, a big player in oil & gas, says that "fossil fuels can no longer compete with solar technologies on price", and that the majority of the $US48 trillion needed to meet global energy demand over the next 20 years will come from renewables.
“Cost is no longer a reason not to proceed with renewables,” the NBAD report says. In some instances, the price of renewables are remarkably low. “The latest solar PV project tendered in Dubai returned a low bid that set a new global benchmark and is competitive with oil at US$10/barrel and gas at US$5/MMBtu.” This was a 200MW bid by ACWA Power at $US0.0584/kWh (5.84c/kwh), without subsidies. Of course, sunnier countries will have lower costs, but over time even cloudier places will see solar eclipse dirty sources.
The report also addresses intermittency:
As for intermittency, the age-old argument against renewables, the report says intermittency and variability are not an issue. “There has been an historic concern that renewables are an unreliable option, because the wind blows only intermittently and the sun does not shine all the time, but that is proving to be less of an issue,” it says.
In the Gulf region, it says, demand peaks tend to occur in the middle of the day, and grids “can now easily cope” with at least 40 per cent of renewable input before requiring modifications. And gas is an ideal complement to deal with the intermittency where it occurs.
“Furthermore, developments in storage technologies are progressing rapidly, and in the next few years utility-scale solutions will be deployed that further minimise concern around what was until recently seen as a major inhibitor to the uptake of renewable generation.
(bolded parts by me)
This comparison between solar and oil makes more sense in the Gulf region where a lot of oil is used to generate electricity. But as electric cars also come down in price, solar energy will become a competitor to oil everywhere around the world. Not only is progress in batteries helping EVs, but they're also helping grid-scale storage make solar even better.
Oil's best days are behind it, that's for sure.