• 2 hours Kinder Morgan Warns About Trans Mountain Delays
  • 9 hours India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 14 hours Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 18 hours Russia, Saudis Team Up To Boost Fracking Tech
  • 24 hours Conflicting News Spurs Doubt On Aramco IPO
  • 1 day Exxon Starts Production At New Refinery In Texas
  • 1 day Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 2 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 2 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 2 days China To Take 5% Of Rosneft’s Output In New Deal
  • 2 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 2 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 2 days VW Fails To Secure Critical Commodity For EVs
  • 2 days Enbridge Pipeline Expansion Finally Approved
  • 2 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 2 days OPEC Oil Deal Compliance Falls To 86%
  • 3 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 3 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 3 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 3 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 3 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 3 days Aramco Says No Plans To Shelve IPO
  • 6 days Trump Passes Iran Nuclear Deal Back to Congress
  • 6 days Texas Shutters More Coal-Fired Plants
  • 6 days Oil Trading Firm Expects Unprecedented U.S. Crude Exports
  • 6 days UK’s FCA Met With Aramco Prior To Proposing Listing Rule Change
  • 6 days Chevron Quits Australian Deepwater Oil Exploration
  • 6 days Europe Braces For End Of Iran Nuclear Deal
  • 7 days Renewable Energy Startup Powering Native American Protest Camp
  • 7 days Husky Energy Set To Restart Pipeline
  • 7 days Russia, Morocco Sign String Of Energy And Military Deals
  • 7 days Norway Looks To Cut Some Of Its Generous Tax Breaks For EVs
  • 7 days China Set To Continue Crude Oil Buying Spree, IEA Says
  • 7 days India Needs Help To Boost Oil Production
  • 7 days Shell Buys One Of Europe’s Largest EV Charging Networks
  • 7 days Oil Throwback: BP Is Bringing Back The Amoco Brand
  • 7 days Libyan Oil Output Covers 25% Of 2017 Budget Needs
  • 7 days District Judge Rules Dakota Access Can Continue Operating
  • 8 days Surprise Oil Inventory Build Shocks Markets
  • 8 days France’s Biggest Listed Bank To Stop Funding Shale, Oil Sands Projects
Alt Text

Unusual Ruling Could Impact Cheap Solar Panel Imports

The U.S. International Trade Commission…

Alt Text

Solar Costs Are Dropping Much Faster Than Expected

The U.S. Department of Energy…

Gaurav Agnihotri

Gaurav Agnihotri

Gaurav Agnihotri, a Mechanical engineer and an MBA -Marketing from ICFAI (Institute of Chartered Financial Accountants), Mumbai, is a result oriented and a business focused…

More Info

Is Solar Energy Ready To Compete With Oil And Other Fossil Fuels?

Is Solar Energy Ready To Compete With Oil And Other Fossil Fuels?

The solar energy industry may prove to be a dark horse in the race to provide global energy security. The world has renewed its interest in solar energy investment as it searches for a cleaner and more sustainable alternative to conventional fossil fuels. Countries like China, Germany, the UK, the US, Japan and Canada have already made significant investments in solar power. Who are the other players who are investing big in solar energy? With its own set of limitations such as high installation costs and high plug-in time, are consumers across the world ready to choose solar energy to power their daily lives? Or, are the conventional energy sources still the best bet?

InvestmentByCountrySector

Source: Bloomberg

Cost Matters

The best part about solar energy is that it is abundant and freely available, at least in most parts of the world. However, the high upfront costs of a photo voltaic panel remain a concern for many. Things are changing fast, however, and according to data from SEIA, the cost of an average PV system in the US is declining each year at a rate of 11%. In fact, the average price of a PV panel has dropped by 63% since the third quarter of 2010. Related: Audi’s Fuel Breakthrough Could Revolutionize The Automotive Sector

AveragePVPriceSystems

Source : http://www.seia.org/research-resources/solar-industry-data

‘Oil Behemoths’ Betting Big On Solar

In a surprising development, even the gulf region has now recognized the changing nature of global energy dynamics and the growing demand for sustainable energy. According to a report for the national bank of Abu Dhabi by the University of Cambridge and PWC: “As Government and utilities are driven to bring new generation capacity on stream, this new reality (Solar energy) presents a significant opportunity to make savings, reduce fuel cost risks, achieve climate ambitions and, at the same time, keep more oil and gas available for export.

The study says that more than half of global investment in new electricity generation is in renewables. As per this report, around $150 billion was invested globally in solar energy generation in 2014 and solar energy is all set to be at grid parity in 80% of the countries in the next two years. These are big numbers. What we get from this study is that even the gulf region, which is traditionally more inclined towards oil and gas production, is slowly and steadily investing in solar energy. Very few are aware that at the end of 2014, Dubai set a new benchmark by showing the world that photovoltaic technologies can be competitive with oil at $10/ barrel and gas at $5 MMBTU.

Solar Power Set To Become Profitable In Japan

According to Thomas Kaberger of the Japan Renewable Energy Foundation, solar energy is all set to replace imported uranium and fossil fuels in Japan as it is set to become profitable by this financial quarter. Japan is among the world’s four largest markets for solar panels. After the Fukushima disaster, the country’s 43 nuclear reactors have been shuttered. Following these crucial developments, Japan has tripled its renewable energy capacity to 25 gigawatts. What is worth noticing here is the fact that solar energy accounts for more than 80% of this capacity.

What Stops Solar Energy?

The process of connecting a PV system to the grid can be time consuming, frustrating and expensive. In some locations in the US, homeowners wait for more than six months to complete this process. This is one of the biggest factors that limit the tremendous potential of solar energy. Intermittency is another area that dampens the impact of this renewable as current modern grids can only cope with around 40 % of renewable input before requiring modifications. But the biggest limitation of solar energy is the lack of proper storage technology.

Energy Storage Attracting Major Investment

Energy storage is a solution that would tackle several issues related to intermittent power generation. As per the report by Cambridge and PWC, Total Energy Ventures (TEC), the venture capital arm of Total invested in the California based company Stem at the start of 2015. This marked TEV’s fifth investment in storage and smart grids. The truth is that energy storage technologies require big purchase opportunities and decisions in order to drive down the cost of batteries; one such decision has been taken by Southern California Edison (SCE). In 2014, SCE awarded a huge energy storage contract of 250 MW, thereby providing a fair chance to different energy storage technologies. Related: HSBC Advises Clients To Get Out Of Fossil Fuels

As sources from Morgan Stanley put it: “Given the relatively high cost of the power grid, we think that customers in parts of the US and Europe may seek to avoid utility grid fees by going “off-grid” through a combination of solar power and energy storage. We believe there is not sufficient appreciation of the magnitude of energy storage cost reduction that Tesla has already achieved, nor of the further cost reduction magnitude that Tesla might be able to achieve once the company has constructed its “Gigafactory,” targeted for completion later in the decade.” The report states that Tesla’s future batteries could potentially store more than 10 gigawatt hours of energy per year, which is enough to run an average home for 1000 years!

Interestingly, according to a report form Rocky Mountain Institute, a combination of photovoltaics and battery storage technology would be able to compete commercially with grid electricity in US within a decade.

Moreover, nearly 600,000 US homes and businesses have already gone solar by the end of 2014. This shows that in spite of its current shortcomings, people have slowly and steadily started turning towards solar power.

India: A Potential Game Changer For Solar Power

Although China’s investments are almost ten times that of India’s, with the election of Prime Minister Narendra Modi in 2014, India is all set to change the dynamics of solar energy investments in South East Asia. With some bold new initiatives proposed by the new Indian government, many foreign companies are eying India as an attractive solar destination. US based Sun Edison committed to setting up a 15,200 MW plant and First Solar a 5,000 MW plant at a ‘RE-invest program that was inaugurated by Narendra Modi recently. If all goes well, Morgan Stanley and other institutional investors like Goldman Sachs and Standard Chartered would soon be investing in the Indian solar space.

The Indian ministry of new and renewable energy (MNRE) received a mandate from Prime Minister Modi to scale up solar power to 100,000 MW by 2019. The country would require no less than $100 billion dollars to achieve this kind of solar power. As per Vinay Rustogi, Managing Director of the consultancy firm Bridge to India, “All of this could not come from domestic investors alone. More than half of this amount, or even more, will come from outside India. The big-ticket announcements by the Indian government has made serious investors sit up and take notice.”

The biggest reason as to why India can be a game changer for solar would be the new government’s ‘Make in India’ campaign. The campaign’s focus on local equipment manufacturing would ensure that costs of PV panels and other equipment would be further reduced due to availability of cheap skilled labor. However, the limited availability of land for solar power generation coupled with local land acquisition issues are the biggest challenges that India faces with respect to solar power. 

So, Where Does Solar Go From Here?

TheFutureSolar

Source: GE

Related: How Shale Is Becoming The .COM Bubble Of The 21st Century

What the solar energy industry desperately needs is sustained improvement in energy storage technologies and some innovative thinking. One of the best examples of innovation is the creation of ‘Community Solar Gardens’ in the United States. With systems in Colorado, Minnesota, California and Massachusetts, these ‘solar gardens’ feed electricity to the local power grid and customers who subscribe to this power get credit on their utility bills. Denver based SunShare LLC is one such company that runs its operations in Colorado and is developing more in association with Excel Energy Inc. Community solar is one innovative option which opens doors for those who cannot afford their own private solar panels.

A Question Worth Asking

Leaving aside China, US, Germany, the rest of the EU and the UK, what we are witnessing now is that a solar revolution is gaining momentum in the most unlikely places such as the Gulf States, India and Japan. The Gulf is rich in oil and gas, India depends heavily on coal and oil while Japan previously relied on natural gas, coal and nuclear energy. Why are these countries now looking towards solar energy?

It is because solar energy is clean, abundant and its costs are reducing with each passing day.

By Gaurav Agnihotri of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Comments currently closed.

  • David Hrivnak on May 04 2015 said:
    Yes I have made the switch to solar and there is no going back. And with our EV and Chevy Volt we need VERY little gasoline either.
  • Vishwas on May 22 2016 said:
    Wonder whether the energy the universe uses to move planets and be harnessed?

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News