The cost of solar panels has decreased at an astonishing rate. The price of obtaining one watt of energy from a solar panel dropped from $77.67 in 1977 to $0.61 today, a 99.21% price reduction. And it’s getting cheaper by the year.
Companies like Google, Walmart, Apple, Facebook, and IKEA are switching to solar to save costs as well. Why are these companies investing in solar panels? Other than saving money, they’re shifting toward a more reliable source of energy.
The price of solar will remain reliable, too. Photovoltaic panels rely only on silicon and the sun. The sun’s energy is continuous and silicon is the second-most abundant element on the planet. Scientists estimate that 25% of the earth’s crust is composed of silicon.
Oil, on the other hand, has no reliable price point. It has many factors influencing what consumers will pay, none of which are controllable, including OPEC, war, policy, and natural disasters. Any single factor can cause oil prices to spike overnight.
OPEC gained control of oil pricing in 1971. At that time, oil was $20 per barrel. Fast forward three years and the same barrel of oil sold for $50. Not only does OPEC set the price of oil, but it also determines the amount of oil produced by its countries.
War has been a sizable influence in shaping oil prices. During times of war, countries aren’t able to produce the same amount of oil they do in peace times. Less production leads to higher costs. During the Gulf War, Kuwait could not produce the same amount of oil it traditionally did, causing prices to skyrocket. Another example of war influencing oil prices is the Yom Kippur War. Large oil producers imposed an embargo on countries in support of Israel, including the U.S. The U.S.’s inability to import foreign oil caused prices to rise.
Natural disasters can impact the price of oil as well. Hurricane Katrina severely damaged oil rigs in the Gulf of Mexico, driving up oil prices so much that President Bush decided to release 30 million barrels from the Strategic Petroleum Reserve. The Gulf region experiences severe storms every year, each holding the potential to cause significant damage, causing prices to rise.
With the unpredictable nature of war and natural disasters paired with the the nauseatingly steep and ever-changing price of our current oil system, all signs point to the radiant future in solar energy. Solar offers less pricing variables, savings on electricity bills, and low cost of production.