If you follow the solar industry at all, you know that solar power costs have fallen off a steep cliff in recent years, but the graph above puts that into somewhat shocking perspective. The contrast between the solar price trend and price trends for various types of fossil fuels is so sharp, and the ramifications for those industries so disruptive, that the creators of the graph gave it a title more fitting of the welcome mat for a Halloween haunted house: "Welcome to the Terrordome."
AllianceBernstein's Michael Parker and Flora Chang, the creators of the graph, write:
Exhibit 2 is the chart the solar industry has been working towards for 60 years. Solar is now – in the right conditions – cheaper than oil and Asian LNG on an MMBTU basis. Yes, we are using utility- scale solar costs in developing markets with lots of sun. But that describes the growth markets for global energy today. For these markets solar is just cheap, clean, convenient, reliable energy. And since it is a technology, it will get even cheaper over time. Fossil fuel extraction costs will keep rising. There is a massive global market for cheap energy and that market is oblivious to policy changes at the NDRC, MITI, the EU or the CPUC.
The first line of a Business Insider article about this, where I first ran across the chart, notes: "It's now a question of how and where, not if, solar becomes a dominant force in energy markets."
That line actually brought another chart to mind for me, the one below. But before checking that chart out, be sure to note one important oddity. The chart shows total recoverable reserves of finite energy resources (i.e., coal, natural gas, petroleum, and uranium), but it only shows annual energy potential for renewable resources. (Also note that the big yellow thing is not the background.)
As Thomas Edison famously said back in 1931, “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”
Of course, markets don't care about potential. They care about cost. Nonetheless, combining that first image with this second one makes for quite a prelude to energy market disruption. We're seeing the very early stages of that with solar's strong growth in recent years. Expect much, much more of that in the coming decades.
Since someone influential once said that three's a charm, I'll close with one more chart, one we've shared a few times but which deserves all the love it can get. It shows the drop in solar panel prices over 36 years.