Kent Moors: Solar power has always offered up the promise of three tremendous benefits.
It’s renewable, it’s great for the environment, and it can be produced right here at home – safely insulated from the ups and downs of global politics and market bottlenecks.
But there has always been one big problem with solar – the price.
For years now, its high cost has always been the biggest weapon in every critic’s arsenal. “It’s just too expensive,” they claim.
However, a study released last week by investment bank Sanford Bernstein suggests this objection is about to fall by the wayside for good.
It was brought to my attention in an article last week by Giles Parkinson of RenewEconomy. To say its findings are rather dramatic is an understatement.
In fact, I can promise you this study will definitely turn some heads…
You Can’t Turn Your Back on Research Like This
Now I must admit, not all analysts (myself included) would accept the study’s premise without some discussion, but its overall conclusion is impossible to ignore.
According to Bernstein, solar PV (photovoltaic systems that generate electricity directly from sunlight) is now cheaper than oil and Asian liquefied natural gas (LNG). The investment bank bases its conclusion on calculations made on a million British thermal unit (MMbtu) basis. This is the standard way analysts equate and compare the energy output for various liquid fuels.
“For these [developing Asian economies], solar is just cheap, clean, convenient, reliable energy. And since it is a technology, it will get even cheaper over time,” Bernstein writes in the report, adding, “Fossil fuel extraction costs will keep rising. There is a massive global market for cheap energy, and that market is oblivious to policy changes” in China, Japan, the European Union, or the United States.
Of course, the bank does provide a needed dose of realism when it acknowledges that the current market share of solar PV in the global energy mix is so small that “the idea that oil and gas is the ‘loser’ in this formulation is laughable… in 2014.”
To the point: The latest BP Energy Survey estimates solar PV accounts for only 0.17% of the global market. That’s the smallest component of any major source. By comparison, oil accounts for 33%, coal comes in at 30%, and natural gas provides 24%. On the lower end of the scale, there’s hydro power at 7% and nuclear at 4%. Even wind and geothermal power (if you’ve ever been to Iceland, volcanoes provide the power) top solar PV, rounding off the list at just about 1% each.