Frequently, new reports outline the incredible progress renewable energy, in particular solar energy, has made in reducing costs and improving efficiency.
Yet, as a population, Canadians are still underestimating the potential of solar. It’s understandable that skepticism would develop when promoting a switch in the energy system fueling our economy.
However, the skepticism, which centers around the economics of solar energy technology, is baseless.
The same factors that produced the massive improvements in solar technology also explain why solar assets make for smart, modern investments.
Researchers from the Massachusetts Institute of Technology reported that since 1980, the price of solar technology has decreased by a tremendous 99%.
This drop has made solar technology cost-competitive with fossil fuels in much of the world.
For investors, the important thing to note is that both private and public research and development funding (R&D) have significantly contributed to the massive drop in price.
This is due to innovation. There’s no other industry that has utilized R&D funding as efficiently as the solar industry.
The amazing thing?
Solar cell (the primary component in solar panels) efficiency averages around 15%, but it continues to increase year after year.
As solar firms continue to get access to larger amounts of capital, the efficiency will also improve, further decreasing the price and increasing the demand for technology. This makes for promising, long-term returns.
Regarding energy creation, accessibility and location have always been important in being able to offer consumers low prices.
The transportation of electricity often means new development of infrastructure, which is time-consuming and costly.
This is really where solar technology stands out, as there’s no other energy technology that matches the versatility of solar.
Residential, commercial and industrial operations can all utilize solar to lower electricity bills and carbon emissions.
The scalability of solar is also incredibly easy in comparison with competing for energy sources, ensuring solar energy will have an important role to play in the electricity grids of tomorrow.
As the solar market continues to strengthen, it’s important to remember that there will be periods of instability. There is no way to avoid this.
Regardless, the global environmental, social and economic climates are primed for solar energy. Investors, take note.
