Cost of Renewable Energy vs. Traditional Energy

One point that always comes up in any solar sales presentation, whydoes it cost so much.  That is a very good question and there areseveral reasons:

  1. With solar energy systems,power producing equipment is installed vs. fossil fuels systems, whereenergy is purchased from a supplier.  There is no capital investmentmade, once the fuel is used, it is gone.
  2. Manufacturing, raw materials and research and development costs ofsolar power is higher than conventional system because of their smallermarket share.  As solar expands, prices will come down and already have.
  3. Competition for raw materials, Photovoltaics in particular are competing for raw silicon against computer manufactures and other electronics manufactures, this is also decreasing.
  4. Fossil fuels prices are artificially low.  One estimate puts the actual price of a barrel of oil around $480.00 if all factors are considered.

In light of those factors, renewable energy, particularly solar isnot expensive at all.  Consider this; we are burning through ourreserves of oil much faster than new oil deposits are beingdiscovered.  It is true, there are still billions if not trillions ofbarrels of oil yet in the ground.  However, most of that will never beextracted.  It is too expensive in terms of energy and capital to getto.  Therefore, it will stay where it is.  In the mean time, the amountwe pay for our gas, oil, and electric in no way reflects the true costsassociated with those products.

In light of those things, solar is pretty economical.  It is easier to pay the oil companies for their energy, but is it better?

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