We can all agree that solar energy used to always be the alternative, rather than the go-to energy source. And while a few years ago solar energy was the more expensive option, nowadays it is quite affordable. In fact, solar energy is now cheaper than coal, according to the International Renewable Energy Agency. But why is that so? And more importantly, how will that change the renewable energy landscape?
Why is Solar Energy Cheaper?
There are a few things to take into consideration when trying to understand why solar energy is now cheaper than coal. From energy subsidies to the development of new technologies, everything can affect the price of solar energy.
Energy Subsidies
It’s no mystery that climate change is the number one concern of most major governments. And since fossil fuels are one of the main sources of pollution, there are many monetary incentives for homeowners and businesses to switch to solar. There is also net metering, which allows consumers to regain their invested money by powering the local energy grid.
By subsidizing renewable energy costs through tax breaks or even direct payments, governments pay a part of the initial costs. As a result, more people are encouraged to try solar energy while reducing the overall economic impact on payers. However, it’s important to note that most subsidies are sustained using taxpayer money. As such, policies may change depending on how many people are actually paying their taxes.
Technology Advancements
Interest in the solar energy industry also pushed forward research and development of new technologies. A solar panel that may have cost thousands of dollars a few years ago, now sets you back by as little as a few hundred dollars. Additionally, durability and efficiency have also been improved, meaning that the longevity of solar panels is much better. Nowadays, green tech is cheaper to produce, more durable, and extremely efficient, reducing the overall costs of solar energy.
Furthermore, the increasing interest in solar energy also causes more and more installation companies to pop up. Therefore, installing solar panels is much cheaper and faster. In other words, both the materials and the manpower are more affordable than they ever were.
Market Instability
When it comes to fossil fuels, there is one thing that everybody can agree on — they are finite. That means their price barely goes down, usually increasing with each passing day. For instance, crude oil and coal have been on an upward spiral for a few years now. And while fossil fuels may sometimes get cheaper, historically speaking, the price will always rise again.
On the other hand, as previously established, solar energy prices have been going down. That triggers a cycle in which people are more willing to invest in green energy, lowering its price while increasing the costs of fossil fuels. And since new technologies are always being developed, the price of solar energy will keep going down. That’s why solar energy is now cheaper than coal.
The Future Looks Bright
All in all, one thing is clear — solar energy will keep getting cheaper and cheaper. That’s because more and more people are willing to save the environment while also reducing their energy bills. And even if government subsidies may change in the near future, there will always be ways to reduce the cost of going solar.
The bottom line is that there has never been a better time to switch to green energy than now. Additionally, since solar energy is now cheaper than coal, you are actually losing money the longer you postpone the transition. And if you would like to read more about solar energy and how to embrace it, you can head to Atlantic Key Energy.
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