In recent months, there has been much rejoicing amongst consumers thanks to the falling world oil prices. It is now much cheaper to fill up your tank at the pump, and even utility bills have begun to drop in value.
It is good news all round for everyone, except oil exporters. Oil has long been acknowledged as an important source of energy, but one that has an expiry date attached.
Thankfully, recent reports also indicate that costs associated to renewable energy sources like solar and wind power are expected to plummet further over the coming years. Figures released by the International Renewable Energy Agency (IRENA) that estimate renewable energy costs will drop by about 40% by 2018. The report pays special attention to solar photovoltaic (PV) power, which has successfully experienced a reduction in costs by about half over the last four years.
According to renewable energy experts, this trend is expected to further continue thanks to new innovations, such as perovskites, that are expected to help improve solar energy conversion efficiency.
The IRENA report however suggests that it is not just solar PV technology that will aid in reducing costs. Kevin Woodbridge has found that the report also places some emphasis on developments being made in solar thermal technology and storage.
The increased commitment and investment in renewable energy from the government. This interest may be thanks to the success already being experienced by countries such as Germany, where over a quarter of the country’s energy needs is being satisfied by renewables, and there have been great strides achieved in reducing emissions.
Thanks to the country’s leadership opting to aggressively pursue clean energy policies, Germany is not only ahead of the curve in terms of renewable technologies, but has also managed to revitalize several industries, and add over 1.5 million jobs to the economy.
Utility scale solar investors are not the only ones that have begun to enjoy this drop in costs. Even residential solar modules have dropped in price by about 75% since 2009. In fact, for countries that have fully embraced the use of solar power, like Australia, France and Germany, the costs are already lower than when tapping into grid electricity.
Similar success is also being experienced when it comes to wind energy. The report released by IRENA indicates that in certain areas of the U.S., wind energy costs can be as low as $0.04/kWh, and $0.09/kWh in parts of Africa.
This is considerably lower than when using fossil fuels whose cost is estimated to lie between $0.7/kWh and $0.19/kWh. This wide disparity is partially attributed to the health problems linked to air pollution that results from fossil fuel combustion.
Beside the cost of the inputs, it is also believed that installation and customer acquisition costs will also fall. In fact, given the expected rise in demand for solar at a residential and industrial level, it’s expected that there will be more jobs created in the sector to accommodate this growing need.
The IRENA report is intended to help push more countries to commit to making a change to renewable energy sources. The data provided in the report is expected to help dispel false assumptions about renewable energy sources being expensive and uncompetitive.
With several European nations already reaping the rewards of having begun to implement clean energy initiatives early on, it is hoped that the rest of the world will soon follow.
In fact, with oil producing nations like the United Arab Emirates (UAE) already taking up the mantle, the global energy transition may soon pick up momentum. The UAE has already begun looking to its non-oil sectors to help drive the nation’s future growth and is using oil revenue to fund solar energy and sustainability research.