If you’ve spent any time reading about sustainable energy, you have probably heard the term “parity,” which refers to the point when renewables become cheaper than fossil fuels. Many experts say that sources like wind and solar will not be economically viable until a kilowatt of sustainable energy costs the same to produce as a kilowatt of conventionally produced power.
Renewables like wind and solar do not yet cost the same as fossil fuels everywhere in the world. However, the solar energy industry is making exciting progress. According to a report on April 14th at the annual Bloomberg New Energy Finance summit in New York, 2013 was the first year when the world officially added more energy capacity for renewable sources than from fossil fuels, including coal, natural gas, and oil. In 2013, the world added 143 gigawatts of renewable electricity capacity and only 141 gigawatts in new industrial plants for fossil fuels.
Michael Liebreich, the founder of the Bloomberg New Energy Finance summit, noted in his keynote address: “The energy system is shifting to clean. Despite the change in oil and gas prices, there is going to be a substantial buildout of renewable energy that is likely to be an order of magnitude larger than the buildout of coal and gas.” This shift can partly be attributed to the dramatic drop in the price of solar and wind power. Because of these decreasing costs, in many parts of the world renewables now cost same, or nearly the same, as fossil fuels.
Solar energy is the most recent renewable to become economically viable. Although solar still makes up only about one percent of the world’s capacity, in the near future, this could change dramatically. A recent forecast from the International Energy Agency lays out a scenario in which solar could become the world’s biggest single source of energy as soon as 2050.
So what does all this mean for the continually worsening climate crisis? While this is certainly good news, the outlook is not yet completely bright. Over the next two and a half decades, global investment in renewable energy will need to more than double in order to avoid the worst case scenarios predicted by current climate models. This is a tall order, considering that investment in renewables has not grown very much over the last three years.
Fortunately, solar energy is flexible and can meet the needs of governments, industries, businesses, or private individuals. This flexibility and its falling prices make solar energy an excellent renewable energy option that will hopefully attract more investors over the next few years.