Solar To Take Over US Electricity By 2022
According to Yuri Horwitz, co-founder and CEO of Sol Systems, solar power will be the main form of electricity generation by the time 2022 hits, despite the tariffs imposed by the Trump administration. In a report released on the 15th of February 2018, Horwitz names three reasons for solar power to advance.
Polls show significant support for renewable energy. A Pew poll of January 2017 notes 65% of Americans would prefer to develop alternative energy sources, as opposed to 27% who would rather expand production of fossil fuels. A Gallup poll of March 2018 notes that 59% of Americans prefer environmental protection to development of energy supplies, and that 63% would rather emphasize conservation, as opposed to 32% who would rather emphasize production. A second Gallup poll of March 2017 saw 71% of respondents favour emphasis on alternative energy, versus 23% who prefer oil, gas, and coal.
Horwitz believes that this base of public support will become important, as the US continues to develop its renewable energy assets.
Solar Rises to the Challenge
Horwitz then considers natural gas, currently America’s primary fuel in terms of power generation. He notes an increase in production that will lower prices by 2019, but also is concerned that the long-term picture doesn’t look as good. New gas discoveries have fallen to a 70-year low, and continue to fall, and recent studies show that the least expensive wells have already been tapped. Whether or not these are valid concerns, there are also projections that estimate prices to rise to $79-$85, depending on location, by 2039.
Solar, on the other hand, is getting cheaper all the time. Solar-based power purchase agreements are getting cheaper every year, and many such agreements in 2017 for delivery in 2018 and 2019 came out at a price below the range for new-build natural gas. As solar develops, prices are fully expected to go even lower, not just due to after-the-fact costs, but also because the technology is maturing. Raw material prices are going down, manufacturers are figuring out how to use less material to achieve the same result, and performance in output per watt is increasing.
Investors Want Solar
Horwitz’s third point is based on a detailed analysis of the current state of the stock market. Boiled down, the current market is shrinking and growing more expensive to invest in; investors are looking for stability over the long term, which solar assets offer. Also, Horwitz cites ‘a global preference for dollar-denominated investments, specifically infrastructure, and especially renewable energy investments’. This preference has driven large investors towards renewable, and thus capital for utility-scale solar is expected to remain cheap or grow even cheaper.
The simple fact of the matter is that the money has to go where it’s cheap, and right now, with public interest in renewable energy, the good bet is on solar. It just so happens that solar is also the environmental option. With the three factors above, it’s well on track to overtaking other sources.
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