The cost of photovoltaic energy or solar power (SP) has increased in recent years, and in most places, it is a lot cheaper compared to fossil fuels like coal. Thanks to generous subsidies and tax credits, photovoltaic installations are not increasing all over the world. This article will take a closer look at some economic considerations surrounding solar power.
Knowing the economics of photovoltaic power
Despite the increased strides in tech innovation, sustainable or clean energy (CE) has not yet replaced conventional fossil fuels. To incentivize CE adoption, governments worldwide have levied subsidies and tax credits for wind and solar energy, which were more expensive than traditional electricity sources until recently.
But because of increased production, subsidies from the government, mounting environmental concerns, as well as direct costs of wind and SP for people have decreased. As a matter of fact, some markets generate CE a lot cheaper for their customers compared to traditional sources like fossil fuels. While wind power like wind farms is predominantly used for commercial uses, SP has both residential and commercial uses.
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The cost of fossil fuels
Although the exact time and date are hard to determine, a lot of experts suggest that this source of energy will be depleted in more or less 100 years; crude oil by the year 2052, natural gas by the year 2060, and coal after thirty years. While coal sources, crude oil, and natural gas have continued to deteriorate, the consumption of these sources has not. Among electrical sources, fossil fuels outclass both nuclear and renewable power.
In 2019 alone, fossil fuels more or less accounted for 85% of all power consumed – at least 80% in 2014. These things are nonrenewable, but it also causes different adverse environmental effects. Burning this source of electricity is the leading producer of carbon dioxide, which has contributed mainly to climate change. Notable effects include melting polar ice caps, global warming, poor crop yields, and rising sea levels.
Accumulating the cost in the economy
While the United States spends at least one trillion dollars every year on fossil fuels, the negative effects of burning these things continue to accumulate costs on the United States economy. As a matter of fact, the country spent $650 billion on fossil fuel subsidies in 2015.
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According to research, air pollution in Europe alone generates economic costs of at least one trillion dollars per year in deaths and diseases. Combining the expenses of these sources, environmental degradation, and healthcare costs, it is estimated the cost of these things balloons to five trillion dollars per year globally.
The cost of solar energy
Although clean electricity represents a fraction of the total energy consumed, the United States is the leading user of clean power. But despite the increase in available photovoltaic power over the past ten years, solar still only accounts for two percent of the total electricity used in the United States.
Photovoltaic juice also trails wind and hydropower when it comes to preferred sources of clean power, making up 11% of total United States renewable consumption pre-pandemic. Today, only two kinds of solar tech exist that can convert the sun’s power into a source of electricity: photovoltaic and solar thermal. Solar thermal collectors can absorb the sun’s radiation to heat homes or water. Photovoltaic devices use sunlight to supplement or replace the electricity provided on utility grids.
Adoption of solar energy (SE)
Until recently, PV Einspeisevergütung systems were only accessible to wealthy or passionate individuals. But because of the declining costs of this system, universal access to paneling systems is starting to become a reality.
In the early days of 2000, the average system in the United States cost ten dollars per watt. In 2017, IRENA, or the International Renewable Energy Agency, published a study that revealed that the cost of PV or photovoltaic had fallen to ten cents per kilowatt-hour. The primary goal of the United States Office of Energy Efficiency and Renewable Energy is to enable SE costs to be pretty competitive with traditionally generated electricity by 2020, with tax credits and subsidies. The cost of PV SE had dropped to $0.06 per kWh.
Cost targets for commercial- and residential-scale SE had dripped to $0.11 and $0.16 per kWh, respectively. If you compare it with the electricity produced by fossil fuels in 2017: the cost of electricity for commercial uses that year was $0.05 and $0.17 for residential uses. As a result, the number of PV systems installed in the country has dramatically increased in commercial and residential spaces. From 2018 to 2021, the capacity has grown from 0.34 to 93 gigawatts.
Most of the time, the commitment to this type of electrical resource has come from big businesses, countries, and individuals. Besides SE, companies like Amazon and Google have committed to using renewable electricity for their facilities. With big enterprises, countries, and individuals continuing to transition to this type of electrical source, adverse effects to the environment from burning fossil fuels can be moderated sooner or later.