How Solar Power Makes Financial Sense

Solar power's price has dropped precipitously in recent years, and it is now competitively priced with coal and other fossil fuels in many areas. The number of solar power systems being installed throughout the world is rising due to hefty tax credits and subsidies. We'll look at some of the financial aspects of solar energy in the sections that follow.

How Much Fossil Fuels Cost

Although it is impossible to pin down a precise date, many experts believe fossil fuels will be exhausted within the next 100 years, with oil running out in 2052, gas in 2060, and coal in 2090, to name just a few possible scenarios. Deterioration of fossil fuel resources hasn't affected the amount of fuel we use. Fossil fuels dominate all other energy sources, including nuclear and renewables.

For the first time since 2014, fossil fuels made up more than 85% of the world's total energy consumption in 2019. 2 As well as the fact that fossil fuels are not renewable, they harm the environment. The primary source of anthropogenic CO2 is the burning of fossil fuels, which has a huge impact on climate change. 3 Global warming, melting ice in the Arctic, increasing sea levels, and decreased agricultural harvests are just some of the notable repercussions.

Accumulating Economic Costs

However, even though the United States spends over $1 trillion a year on fossil fuels, the price of their detrimental impacts continues to mount. Fossil fuel subsidies alone accounted for $649 billion in 2015 in the United States. 5 According to a new study, Europe's air pollution costs the economy $1.6 trillion a year in illnesses and deaths. An estimated $5.2 trillion is spent each year on fossil fuels worldwide, including health care expenses and environmental damage.

The Cost of Using Solar Power

Despite the small share of renewable energy in overall consumption, the United States is the world's largest user of renewable energy. Although the amount of solar energy accessible has increased over the last decade, solar still accounts for 2.3% of total energy consumption in the United States.

Solar power falls short of hydropower and wind in terms of preferred renewable energy sources, accounting for only 11.5% of total renewable energy consumption in the United States in 2019. Solar thermal and photovoltaic are the only two forms of solar technology that can turn the sun's energy into a source of electricity at this time. Solar thermal collectors are devices that use the sun's energy to heat water or a building. Photovoltaic gadgets rely on the sun's rays to generate power instead of the utility grid.

Adoption of Solar Energy

Until recently, solar energy systems were only available to those who could afford them or were irrationally obsessed. Although the cost of solar panel systems has dropped significantly, universal access to them is becoming a reality. The average cost of a solar system in the United States in the early 2000s was $10 per watt.

When the International Renewable Energy Agency (IRENA) released "Renewable power generating prices in 2017," they found the cost of solar photovoltaic (PV) had dropped below $0.10 per kWh. It was the objective of the US Office of Energy Efficiency & Renewable Energy to make solar electricity costs competitive with conventionally generated power by 2020, without any subsidies.

Rise Across the Globe

Because fossil fuels are hazardous to the environment, solar energy has experienced a worldwide growth in use. In the solar power business, competition has resulted in a significant decrease in installation prices.

Large economies, including those of the United States and China and India, and numerous European countries, have begun to use solar energy. Despite the country's high levels of air pollution, India has set a goal of producing 175 gig watts of renewable electricity by 2022. 12 For solar photovoltaic installations in the United States, capacity is predicted to quadruple in the coming five years.

Large Corporations

Large corporations are also making investments in reusable solar systems. We already know that Walmart (WMT), Verizon (VZ), and Apple (AAPL) are using solar power in some of their buildings. 14 Google ordered 1,600 megawatts of solar power from 18 different suppliers in the fall of 2019.

There is still a small percentage of the entire energy supply provided by solar power, but household and commercial sectors are gradually adopting renewable energy. Solar energy systems will become increasingly common as their prices fall. Within the next decade, the cost of a kilowatt-hour in Europe is predicted to fall to between 4 cents in 2025 and a penny by 2050.

Solar Photovoltaic (PV)

Based on predictions, solar photovoltaics will be one of the most affordable ways to generate power in the future. The International Energy Agency (IEA) predicts that solar systems will provide 5% of global power consumption in 2030 and 16% in 2050 as prices continue to fall. 17

To realize this vision, the worldwide solar energy capacity must be increased from 150 GW in 2014 to 4,600 GW in 2050. Consequently, 6 billion metric tonnes of carbon dioxide per year would be saved. According to the authors, according to more recent predictions, such as those from the Finland's Lappeenranta University of Technology, solar energy might account for as much as 76% of worldwide power consumption by 2050.

The Verdict

Individuals, large corporations, and governments have strongly preferred renewable energy sources. Companies like Google (GOOG), Amazon (AMZN), and others pledge to use wind power to run their businesses. It is hoped that the negative environmental impacts of fossil fuel combustion may be mitigated if large corporations, people, and governments continue to switch to renewable energy sources.