Has solar power's day in the sun arrived?

Has solar power’s day in the sun arrived?


Solar power was once derided as a pipe dream and many industry players have floundered, but while the use in this renewable energy remains tiny compared with fossil fuels, it may be poised to completely reshape the energy market.
“Solar is now cheap enough that it competes with oil, kerosene, diesel and LNG in developing markets and yet is still small enough that it cannot disturb pricing for energy in any market,” Bernstein Research said in a note earlier this month. With the sun accounting for only 0.17 percent of the global energy supply in 2012, any losses for global energy players are just too small to notice, but that may begin to change, Bernstein said. “Solar can simply get bigger and bigger,” it said. “Since it is a technology, it will get even cheaper over time. Fossil fuel extraction costs will keep rising,” it said. Once solar begins to displace a material share of the fossil fuel supply, energy-price deflation would be inevitable, Bernstein said, although it added, “even on an aggressive view, this could take the better part of a decade.” Power plants in California, Germany and Australia – places which have significant solar installations – are already starting to feel the effects, it said. Because solar generates electricity during the day, it reduces peak power demand from non-renewable sources as adoption increases, Bernstein noted. “Demand during what was one of the most profitable times of the day disappears,” it said.
In addition, rooftop solar installations reduce the amount of electricity purchased from distribution utilities, it noted.Bernstein isn’t alone in viewing solar power as a potential disruptor, especially as costs continue to fall. “Cost reductions will put solar within striking distance, in economic terms, of new construction for traditional power-generation technologies, such as coal, natural gas, and nuclear energy,” McKinsey & Co. said in a report earlier this month. “Depending on the market, new solar installations could now account for up to half of new consumption,” it said, noting that more than 20
percent of newly-installed capacity in the U.S. was solar during the first ten months of 2013. McKinsey noted businesses in the U.S. are already catching on to solar’s potential. “A number of companies with large physical footprints and high power costs are installing commercial-scale rooftop solar systems, often at less than the current price of buying power from a utility,” it said. Companies stepping up include Wal-Mart, which has said it wants to
switch to 100 percent renewable power by 2020 from around 20 percent currently, while mining and defense companies expect to use solar power in their remote locations, McKinsey said. “These steps are preliminary, but if they work, solar initiatives could scale up fast,” it said. – CNBC via Yahoo Environment


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