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Why Low Oil Prices Are Positive for the Solar Electric Industry

From Solar Today:

Over the past 2 years, we have seen 50% lower oil prices in the US and the rest of the world. Firms that produce oil have seen their respective stock prices crash. We have also seen these lower oil prices have a negative impact on the solar industry’s publicly traded firms, such as First Solar. But I believe that low oil prices are a good thing for the solar electric (photovoltaic) industry.

First, I’d like to classify solar a bit better and add some understanding of the economics of solar. Solar is part of the business and customer spending sector – it’s a consumer product much like a computer, laptop microprocessor, commercial forklift, or new car or truck. Solar firms are not just energy firms, but also high-tech consumer product companies.

Second, we must understand the economics that drive solar consumer spending. The cost-benefit for solar is pretty simple. There are two components: how much it costs per kWh to produce your own electricity, and how much money you offset or save by installing solar.

crude-oil-prices-EIA

Source: Why Low Oil Prices Are Positive for the Solar Electric Industry

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