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| Fri, 14th Jun 2019 15:47:00 |
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Solar electricity vs. fossil fuels: how do they compare? |
If you’ve been following the ongoing battle between solar energy vs. fossil fuels, it might seem like the predominant resources on which the global economy depends – oil, coal and natural gas – will be completely phased out of existence in the near future. In reality, these resources still power most of the planet, while renewable resources like solar and wind only contribute some two to three percent of global energy capacity. This reality check begs the following question: how does solar really stack up against fossil fuels, and why is there so much excitement about the growth of solar?
Solar energy vs. fossil fuels
In terms of environmental impact, solar power is a much more optimal resource than fossil fuels. In terms of reliable application, coal and natural gas have the edge. The ultimate way to compare solar energy to fossil fuels is by cost, where solar has quickly caught up with its non-renewable counterparts.
Is solar power cheaper than coal and other fossil fuels?
Comparing the cost of various energy sources is far from simple. Government subsidies play a major role in shaping the growth potential for a new power source, which means that making an “apples to apples” comparison of the costs of solar energy vs. fossil fuels side-by-side is a complicated task.
G20 vs the U.S.: the fossil fuel paradox
The nations of the Group of Twenty (G20) may have agreed to begin phasing out fossil fuels in 2009 due to its inefficient and polluting qualities, but not every G20 member is following through on its word. According to Oil Change International’s report, while the G20 makes up more than 85% of global GDP, these top economies are spending $452 billion every year to subsidize fossil fuels.
Curious to know who is the largest contributor of fossil fuel subsidies in the world? The answer is right here at home. The United States has continued to subsidize fossil fuels at a higher rate than any other nation in the world, even under the environmentally progressive Obama Administration. With fossil fuel advocates already lined up for the incoming Trump Administration, the next era of American energy will likely continue on its same course of heavy fossil fuel subsidization.
How energy subsidies play the biggest role
When we compare the cost of solar energy vs. fossil fuels, we have to factor in the relative subsidies that are keeping costs low. In the case of solar power, the Investment Tax Credit (ITC) currently covers 26 percent of any U.S. solar installation and will do so until 2021 for the residential sector, at which point the credit steps down to 22 percent for a year before phasing out completely. The commercial sector will retain a permanent 10 percent tax credit for solar.
While renewable energy skeptics have criticized the ITC for being a costly taxpayer-funded stimulus, the reality is that this short-lived subsidy represents only a small fraction of the money that U.S. taxpayers are spending each year to subsidize fossil fuels. Without any subsidies, solar is likely the cheapest energy source in the world, as demonstrated by record low power purchase agreements in countries like the United Arab Emirates and Chile. And solar’s low cost trajectory is likely to continue: unlike oil, gas and coal, solar PV is a technology not a fuel – meaning that its costs will continue to fall every year as research continues and technology improves.
The best way to compare solar energy and fossil fuels without subsidies is to examine global energy prices. Consider this: global coal prices have historically averaged $0.06 cents per kilowatt-hour (kWh). Until the past decade, no alternative energy resource came close to rivaling that price. Fossil fuel steam averages around $0.05 cents/kWh and small scale natural gas can go as low as $0.03 cents/kWh. It’s no wonder that the world was shocked in 2016 when a major commercial solar installation bid an extremely low price for PV at $0.029 per kWh – effectively leveling the playing field between solar and fossil fuels’ cheapest offerings.
As a result, the discussion of whether solar is cheaper than coal has already become an outdated debate. Today, energy companies are developing solar PV projects that can deliver energy at half the cost of coal, and that’s without factoring in the costly negative impacts of coal – such as heavy carbon pollution, strip mining, and mountaintop removal.
The cost of solar is dropping across the nation. See prices in your area and get free solar quotes on the EnergySage Marketplace.
The advantages and disadvantages of solar electricity vs. fossil fuel electricity
The pro/con list of solar energy vs. fossil fuels is likely no surprise to you. Fossil fuels offer the benefit of being a reliable resource that offers near-constant availability. Whether you want to go for a drive at 3 a.m. or 3 p.m., there is nothing you have to consider as a consumer other than if your gas tank is full. However, many people are already aware of the detriments of gas, oil and coal, including significant pollution and the reality that it is a scarce resource that will eventually run out.
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