Even though oil prices are at about $50 a barrel— the lowest they have been since 2009— this will not deter humanity’s transition to cleaner energy. For starters, oil and renewables do not really compete with each other, despite what many people think. Renewables are for electricity, while oil is for cars— oil is simply too expensive to power the grid. But even when solar is compared to coal and natural gas, solar wins the battle: solar is predicted to be the world’s largest single source of electricity by 2050, according to the International Energy Agency (IEA). If this occurs, more than 6 billion tons of CO2 emissions would be avoided per year by 2050 – that is more than all current energy-related CO2 emissions from the United States or almost all of the direct emissions from the transport sector worldwide today. The reason solar currently makes up less than 1 percent of the electricity market is due to panel availability and high upfront capital costs. However, because solar is a technology and not a fuel, these costs are expected to keep dropping as time passes and efficiency increases. The following graph illustrates this point:
Moreover, the history of oil prices shows that oil will not stay at its current low for more than a year or two. While it may never return to $100 per barrel, it will not remain below $70 per barrel because almost $1 trillion in investments in future oil projects would not be profitable if that were so. Therefore, supply will eventually shrink and prices will rise again. On the other hand, as shown by the previous graph, solar will keep getting cheaper and cheaper. The question is no longer if the world will transition to cleaner energy, but how long it will take.
IEA. (2014, September 29). How solar energy could be the largest source of electricity by mid-century. IEA Press Releases. Retrieved from http://www.iea.org/newsroomandevents/pressreleases/2014/september/how-solar-energy-could-be-the-largest-source-of-electricity-by-mid-century.html
Randall, T. (2015, January 30). Seven Reasons Cheap Oil Can’t Stop Renewables Now. Bloomberg Business. Retrieved from http://www.bloomberg.com/news/articles/2015-01-30/seven-reasons-cheap-oil-can-t-stop-renewables-now