Oil prices have fallen by about 40% since mid-June, while solar stocks have fallen about 20% in that time.
This is not new, solar stock prices have reacted to rising or falling oil prices in the past. Investors fear cheap oil will bring down demand for alternative energy.
But in reality, those fears are completely unfounded. Here are a few things to consider:
Solar energy and energy from oil are used in very different ways: Oil is used mainly for transportation fuels, while solar power gives us electricity to power, for example, our machines and electronic devices, and to provide lighting in our homes and businesses.
As the costs of solar energy production go down, it becomes a better choice as an alternative to other types of electricity generation– which means better returns on investment (ROI) in the long term.
Public utilities and big businesses are increasingly turning to solar to feed our massive need for electricity. The agreements that they sign with solar providers often span decades and are therefore unaffected by oil price changes.
As an economic and jobs driver, the clean energy sector – which encompasses hydro power, as well as wind, solar and biomass – is a much better long term bet. In that sector, employment is up 37 per cent to 23,700 people over 5 years in Ontario, B.C. and Quebec. That compares with 22,340 employed in the oilsands. (Solar ‘farms’ are even being planned in oil rich Alberta, where sunlight is intense and plentiful.) Wind, solar, run-of-river, and biomass energy has grown by 93 per cent since 2009.
The bottom line for investors? Solar is here to stay and the future for solar ROI keeps getting brighter (so to speak).
We are in a period of transition with renewables. With prices coming down and research ramping up, it feels like are starting to turn a corner.
We need a flexible grid
One of the biggest puzzles is how to store electricity, as we shift to using more and more renewable energy sources. The electricity grid needs to be able to be more flexible to the fluctuations in supply of wind, solar, etc.
Larger institutions are starting to seriously look for answers to that question. In the US, there are are investigations in a number of areas, including the Long Island Power Authority, The Hawaii Electric Company and the California Public Utilities Commission:
Ontario is also working setting out on this quest. The province’s Independent Electricity System Operator (IESO) recently chose five companies to work on demonstration projects designed to capture and release energy.
The technologies that will be tested include advanced batteries, systems that store power in the form of hydrogen, and even flywheels that hold energy as kinetic energy in a spinning rotor.
The test projects will be distributed at various locations around the province, and will be connected to different parts of the grid to see how effectively they can help balance supply, demand and other transmission issues.
Dimplex helps out
One of the companies chosen is one that we work with here at SNDI…
Dimplex North America Ltd. will install thermal systems in apartments in Hamilton, Ont., that store electricity as heat in special bricks, releasing it later when the building needs to be warmed.
For more information on this fascinating subject, here are some resources:
When oil and gas prices drop, as they are doing now, people’s interest in solar energy seems to drop as well. That’s because solar has been more costly.
But that’s changing. In the U.S., solar electricity is on track to be as cheap or cheaper than average electricity-bill prices in 47 US states … in 2016. (That’s assuming the U.S. maintains its 30 percent tax credit on system costs, which is set to expire that same year.) Solar is already coming out ahead in 10 US states.
The reason solar-power generation will increasingly dominate: it’s a technology, not a fuel. As a result, efficiency increases and prices fall as time goes on. The faster the price of solar energy falls, the more viable it becomes as a source of clean power — and the sooner we’ll see it on roofs everywhere.
Solar is also destined to be the world’s biggest single source of electricity by 2050, according to a recent estimate by the International Energy Agency.
Clean Energy Review recently published a great photo essay by Joan Sullivan looking at how wind turbine blades are built. Here’s an exerpt:
Birth of a Blade
PowerBlades opened last year in Welland, Ont, to support the growth in renewable energy in Ontario spurred in turn by the province’s Green Energy Act. As of October, the company will have fabricated 78 fiberglass blades, each 45 meters long and up to three meters wide, for dozens of 2.05 MW Senvion turbines. Each turbine generates energy to light up about 1,000 homes.
Inside PowerBlades, overhead cranes move girders and blades from one part of the building to the next. Here, 136 production workers, machine operators, and office staff work on various stages of blade production, including lay-up, lamination, curing, sanding, painting, inspection, repair, finishing, loading, and transport.
Blades begin their lives in the plant’s Main Shell Area, where workers lay sheets of fiberglass mat and resin into a pair of side-by-side proprietary molds each about 50 meters long and four meters wide. Each blade is built up in two halves, split down the long axis like a pea pod….
Plug’n Drive is marking the 10,000th electric vehicle sold in Canada with a five-day celebration, including a display of every make and model of EV, along with some great presentations..
It will happen January 12 – 16, 2015, in the Atrium at Brookfield Place, 181 Bay Street, across from Union Station in downtown Toronto.
This 5-day showcase provides the opportunity for visitors to get up and close with the latest models of fully electric and plug-in hyrbid electric vehicles on the market, and to celebrate the clean electricity sector in Ontario and across the country.
It will include a special VIP cocktail reception on Thursday, Jan. 15, from 6 pm – 9 pm including live jazz, cocktails conversation and a chance to get up close with the cars and mingle with stakeholders from across the industry.
SNDI is a Multi-Trade Contractor that offers Industrial, Commercial and Renewable Services
SmartNet Developments is a Contractor servicing Ontario’s construction industry in the industrial, commercial and renewable energy sectors. We are a multi-trade contractor so our customers only need one phone number to call. We are also branching out into infrastructure and sustainable energy projects.