The clean energy revolution is facing an old enemy again. Just as clean alternatives to fossil fuels pick up speed, they confront a powerful old nemesis: oil, now cheaper than ever. Petroleum prices have plummeted since late summer 2014, declining by more than 60% to a record low below $40 per barrel, before recovering slightly. low oil prices could constitute a threat to electric car companies such as Tesla, which may sell fewer vehicles when conventional cars are cheaper to operate than they otherwise would be. People tend to be pragmatic and vote with their wallets more often than their consciences; when oil becomes cheaper, the demand for alternative fuels, including biofuels and electric vehicles, falls. Even worse, the support for policies that push for the use of such alternatives also can decline. Policies set in Washington and at the state level can cause politicians enthusiasm for clean energy technologies and more stringent fuel economy standards to ebb. This may also result in a decline in government tax credits for wind and solar, which could render these sources of energy less cost competitive with natural gas-generated electricity. For example, the astounding drop in the cost of rooftop solar panels in recent years is aided by a 30% federal tax credit that expires in 2016. Without the credit, the cost calculations of many families may change. There is a huge policy piece in here Hence there’s a lot at stake when cheaper oil robs alternative energy of customers and political support. On the flip side major policy change could also greatly expand the use of renewable energy nationwide is the federal administration’s Clean Power Plan, which would reduce greenhouse gas emissions through EPA-mandated cuts to power plant emissions, while offering states incentives to meet requirements by expanding clean energy. According to the Energy Information Administration, these regulations could result in 283 gigawatts of cumulative additions of renewable electricity generation capacity through 2040, compared to only 109 gigawatts without the plan. The plan is being challenged in the courts, but if it survives largely intact, it could maintain renewable energy growth despite a continued slump in oil prices.
But the clean energy Industry is on the march, from rapidly expanding distributed solar installations to wind turbines that have been sprouting up like summer corn among the fields of Iowa and Nebraska. Today, America is number one in wind power, generating three times as much wind energy as we did in 2008. Renewable energy use grew an average of 5% per year during the period from 2001 to 2014, with major growth seen in wind and solar in particular, the Energy Information Administration, or EIA, reported. Renewable energy accounted for nearly 10% of the energy Americans used in 2014 the highest usage since the 1930s, when many people still burned wood for heat. According to the White House, the wind industry now supports more than 50,000 jobs in the U.S., and supplies enough energy to power 16 million homes. As well as we’re doing in wind, we’re also making even more progress on solar. America generates 20 times as much solar power as we did in 2008 imagine 20 times the growth in less than 7 years. Last year was solar’s biggest year ever. Prices fell by 10%; installations climbed by 30%. Every three minutes, another home or business in America goes solar. Every three weeks, we install as much solar capacity as we did in all of 2008. . It is important to note that cost savings is not the only motivator for people to purchase electric vehicles, given that they have other advantages over conventional cars, like faster acceleration and a prestige factor that is hard to measure. The federal administration, for its part, is also determined to push for continued government support for clean energy that help many innovations.
In short even against all odds the love and romance for clean tech is still in the air and if this growth continues the oil based culture we see today may go to the way of horse carriages or firewood. Maybe this adverse pressure from oil may propel the clean tech to be leaner meaner and efficient.
By Naved Jafry & Garson Silvers