2015: Solar’s Rise, Oil’s Demise

Oil prices have dominated the energy news in the later half of 2014, particularly here in Canada where, in recent decades, we have unfortunately become more dependent on volatile and uncertain oil revenues. This story has overshadowed solar’s quiet but very successful struggle against fossil fuel based electricity generation.

We are at the beginning of a decades long overhaul of the global energy sector that will see solar come to dominate global electricity generation (and likely transport fuel through low cost production of hydrogen for fuel cells). This isn’t just my opinion, its a prediction by one of the most conservative energy agencies on this small planet, the International Energy Agency (IEA), which predicts solar will be the largest source of electricity globally by 2050. That’s up from less than a quarter of 1% today.

The price of solar dropped 12–19% in 2013/2014 and this years price drop will be a near repeat (NREL). Solar is on track to be as cheap or cheaper than average electricity price in 47 US states by 2016, according to Deutsche Bank. This is without any radical technology breakthroughs being commercialized! Just imagine the potential in a few years with some of the breakthrough innovations showing promise (including two of our portfolio companies, Morgan Solar and Sparq Systems). Presently, the Fraunhofer Institute in Germany has solar cells with more than double the efficiency (46%) of current commercial PV solar modules, however, there are surely cheaper, more efficient ideas that will emerge from the labs and garages around the world.

Solar and oil are on on very different trajectories: solar getting cheaper each month — driven by unlimited human ingenuity; and oil (extraction) getting more expensive — driven by the realities of finding and recovering a limited resource.

We’re making our bet on human ingenuity. Start shifting your assets to the renewable energy economy before they get stranded.

Originally posted Jan 9, 2015 on the ArcternVentures.com