article7

PRESS RELEASES

Solar Energy Continues to Grow Despite Cheap Oil Prices

Press Release Date: December 10, 2014


With cheap oil and gas prices currently in effect globally much has been made of the ramifications of these prices on the further development and adoption of clean energy technologies.

With oil prices falling to record five-year lows, pressure has been placed on solar energy company stocks even as the industry experiences its own boom period of record growth worldwide. First Solar which was trading at around $72 per share in the middle of September and Solar City which traded at nearly $65 are at $44 and $50 per share respectively. These decreases justified the opinions of some that solar energy investors were looking for an exit, fearful that the currently cheap oil prices could slow growth in clean energy. This is simply not the case according to the majority of industry analysts as Oil and Solar energy serve two entirely different consumer bases.

Oil clearly leads in the demand for energy utilized in transportation fuels both private and commercial, but the bulk of solar energy’s user base fall into two main categories, public electricity utilities customers and large corporations. Neither of these two types of user relies on oil for generating electricity, nor according to analysts are they going to do so in the future. Less than 5% of global electricity production is being fuelled by oil, the overwhelming majority of power generating plants being fueled by nuclear, coal, natural gas and increasingly over the last decade solar energy. Long-term agreements between solar energy providers and public electrical utilities are up to 20 years in length and therefore are unaffected by temporary depressions or increases in the price of oil.

Despite the current low prices for oil, falling production costs and more efficient technology mean that solar energy is for the most part the far more practical choice in providing new supply sources. Once deployed solar energy arrays are relatively simple and economical to maintain while taking advantage of free and almost unlimited energy input from an ongoing source, the Sun. Despite the cheap cost of oil at the moment there's simply little in terms of real infrastructure in place to take advantage of this situation. What few oil burning power plants left in existence in the U.S for example are over 50 years old, and make use of highly outdated technology that is prohibitively inefficient and costly to maintain.

“With cheap oil prices pretty much dominating the headlines at this point in time it’s understandable how there would be at least a little uncertainty among the public at large in regards to the health of the solar energy industry and other clean energy technologies. This uncertainty was an absolute windfall to investors who secured themselves bargain prices stocks in solar companies whose growth is nearly off the charts at present. Industry wide we are simply unable to keep up with demand for new power production and this level of demand is increasing even further still” commented Wising Century Solartech’s V.P of Investment Relations and Outreach, Mr. Raymond Ho.


GO BACK TO PRESS RELEASES