Saturday, November 1, 2014

Solar energy can compete with fossil fuels in costs

Fossil fuel lobbies often say that renewable energy sources such as solar energy are still far from being cost-competitive with fossil fuels like coal and natural gas. This statement, however, is very much open for debate, especially after the most recent Deutsche Bank report which claims that in 2016 solar energy will become cheap as fossil fuels, if not even cheaper.

Deutsche Bank claims that if U.S. maintains its current 30 percent tax credit on system costs, which is set to expire in 2016, electricity generated by solar energy will be as cheap or cheaper than average electricity-bill prices in 47 U.S. states. If for instance, tax credit is reduced to 10 percent, solar will soon reach cost parity with fossil fuels in 36 states. It has also been reported that solar energy has already reached cost parity in 10 U.S. states.

This means that solar energy is no longer exotic option for rich people that have suddenly decided to go green. Solar energy is becoming competitive with fossil fuels in all segments, and the solar panel prices will no doubt continue to drop even further in years to come thanks to technological advancements. The countless researches in solar energy technologies will no doubt further improve both costs as well as efficiency of solar energy systems.

The report also estimates that solar energy will become world's most dominant source for electricity generation by the year 2050. Today, solar energy only accounts for around one percent of global electricity generation.

Using solar energy instead of fossil fuels would no doubt help global fight against climate change. Burning fossil fuels releases harmful greenhouse gas emissions that contribute to climate change.