Move Over Oil: Solar Power Will Dominate by 2050
Author: Jonathan Whiting
Published: Wednesday, 26 November 2014
It’s common knowledge that solar is one the most favourable power sources for our struggling planet.
But for years solar power has struggled to keep the public interest, due to the cheaper cost of fossil fuels. While the wind and sun are free, the technology used to capture this near-infinite resource has to date generated power that is more expensive than that provided by coal or gas-fired power plants.
This is about to change. Recent findings by Deutsche Bank showed that solar power will become the main source of energy and it will happen very soon.
According to the report, solar electricity is on track to be as cheap or cheaper than average electricity-bill prices in almost all of the U.S. states in 2016 and Solar will be the world’s biggest single source of electricity by 2050.
And, unlike the cost of fossil fuels, prices will continue to drop as the technology improves, the costs of equipment to generate it plummets and financing becomes more affordable.
The prediction of grid parity in 50 US states by 2016 – up from just 10 now – suggests a dramatic increase in the uptake in household and commercial rooftop solar in the world’s biggest economy.
Over time, this should spread to the rest of the world as the efficiency of solar power technology increases and prices fall, whereas the price of Earth’s limited fossil fuels will tend to go in the other direction.
The report was released by Vishal Shah, the leading solar industry analyst at Deutsche Bank, regarding Vivint Solar, the second largest US installer. It predicted rooftop solar PV will reach grid parity in 50 US states by 2016 while declining system costs, customer acquisition costs, financing costs and rising volumes should drive significant scale benefits.
Even if the tax credit on system costs in the US drops to 10 percent (currently 30 percent), solar will soon reach price parity with conventional electricity in well over half the nation.
The chart below shows how far solar will come by 2016 in the US:
This could mean great things for the UK over the coming years too. With big developments and a massive uptake of solar power on the cards for the US, chances are the UK won't be far behind. And with reports suggesting that China is planning a massive investment in the UK infrastructure by 2025, this could be perfect timing.
According to research conducted by London-based Centre for Economics and Business Research and the law firm Pinsent Masons, the Financial Times reported that the world’s second largest economy is set to invest £105bn in British infrastructure, primarily in the UK's energy, property and transport infrastructure in the next ten years.
It said the energy sector is likely to be the largest recipient of inward Chinese investment to the UK, with nuclear energy, wind power generation and solar PV projects set to enjoy a share of £43.5bn of investment over the next 10 years, with renewables investment picking up the pace towards the end of the decade.
All in all the reports and findings over the last few months offer a positive and welcome "game-changer" for UK infrastructure as the government struggles to modernise energy and transport networks.