Comparison of solar energy and fossil fuels

Solar power is a much more environmentally conscious resource than fossil fuels. In terms of efficient 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?

There are several factors to consider when comparing the costs of energy sources. Government subsidies play a major role in forming the growth potential for a new power source, which means that making a comparison of the costs of solar energy vs. fossil fuels side-by-side is a difficult task.

G20 vs the U.S.: the fossil fuel paradox

Europe is ahead of the United States in renewable energy. The nations of the Group of Twenty (G20) may have agreed to begin phasing out fossil fuels in 2009 due to its 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 a year to subsidize fossil fuels.

Who is the largest contributor to fossil fuel subsidies in the world? Unfortunately, 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. Fossil fuel advocates are already lined up for the incoming Trump Administration. In the near term, American energy will continue on its same course of heavy fossil fuel subsidization.
  
How energy subsidies affect energy costs

Comparing the cost of solar energy vs. fossil fuels, we have to factor in the subsidies that are keeping costs low. In the case of solar power, the Investment Tax Credit (ITC) currently covers 30 percent of any U.S. solar installation and will do so until 2021 for the residential sector. The commercial sector will retain a permanent 10 percent tax credit for solar.

Renewable energy skeptics and global warming deniers 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. 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 the lowest price for PV to date at $0.029 cents per kWh – effectively leveling the playing field between solar and fossil fuels’ cheapest offerings.

Now is a great time to install a solar energy system!

If you want to move into the future and join the solar revolution, or if you want to find out what solar panels are right for you, go to HahaSmart.com and try our price checker tool. You can see how much a system will cost, and how much you can save over the next 20 years. 

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