Business Insider: “It’s now a question of how and where, not if, solar becomes a dominant force in energy markets. AllianceBernstein’s Michael Parker and Flora Chang published a note last week with the following chart showing how rapidly the cost of solar on a real-dollars-per-million-BTU equivalent basis has, in many instances, come to match that of conventional fuels.” “Nothing else looks like this. And the title of the chart, Welcome to the Terrordome, reflects this almost violent decline in solar pricing.
Solar still makes up only a tiny fraction of overall energy usage on an absolute basis — about 0.17%. But it’s an unstoppable trend.
For now, this minuscule starting point is great for investors, Parker and Chang say, because it will continue to be more attractive than oil and gas prices, which are set to keep climbing. Bernstein’s notoriously bullish energy team forecasts an oil price of $150 by 2020. Parker also explains that if utilities try to respond, growth in the storage market will accelerate.
As solar costs fall, the price that end markets will pay for solar energy is set by oil and remains unchanged. The solar industry (upstream and downstream) collects all of the value created by improvements in the technology. The behavior from here seems clear: the solar industry will expand. Retaliatory steps from distribution utilities will increase the market for cost-effective battery storage. This becomes – initially – a secondary market for battery technologies being developed for the auto sector. A failed battery technology in the auto sector (too hot, too heavy, too rigid a form factor) might well be perfect for the home energy storage market…. with an addressable end market of 2 billion backyards.”