If you wonder how rising oil prices will impact the world’s transition to solar energy, the events of the last month must have you concerned. By March 8, 2022, Crude Oil hit its highest price since 2009, according to tense news reports. The day Putin invaded Ukraine oil shot past $100 per barrel, and it only went up from there. Shell became one of the first large US oil companies to cut off any fossil fuel imports from Russia due to the Ukraine aggression. American President Biden followed reluctantly, cutting off any Russian oil imports. Today, oil dropped 12 percent as we continue the pricing roller coaster triggered by Russia’s invasion.
High Price of Fossil Fuels Could Boost Alternative Energy Resources
So how does the price of a fossil fuel impact the country’s transition to renewable energy? More specifically, how will it impact the transition to solar energy? On the one hand, our dependance on Russia for oil makes transitioning to renewable energy resources more essential than ever. But Reuters suggests that surging crude oil prices could actually slow the transition to renewable energy.
Yes, skyrocketing fuel prices might push consumers into fuel efficient electric vehicles. It could also bump up investment in hydrogen technologies. On the other hand, surging oil prices could inspire a surge in drilling and in coal usage. As fossil fuel companies rush to cash in on the soaring crude oil prices, the cost of extrusion becomes more attractive. If history repeats earlier patterns, that boom will go bust and oil will once more be abundant and affordable. In the past, this has impacted investors in the renewable clean energy sector negatively.
Renewable Energy Companies Double Down To Break Oil Dependency
Even the Middle East has been building solar utility plants. And why wouldn’t they? The rest of the world depends on their oil, but countries like Saudi Arabia, are inundated with sunlight year round. Saudi Arabia announced a plan to generate 50% of their electricity from renewables by 2030.
Consumers who haven’t take clean energy alternatives more seriously, might look afresh at solar panels on their roofs and electric vehicles. As always, consumers don’t just look at environmental reasons to shift. They are more motivated by saving money. An example of the consumer shift is the growing global sales of electric vehicle world-wide.
The IEA’s Perspective on Consumer Behaviors
The International Energy Agency said oil prices might increase electrification of the transport sector. The IEA also noted some conflicting trends. Of course more consumers will turn to renewable energy power sources, whose costs keep dropping. Yet at the same time, sales of gas guzzling SUVs climbed in spite of rising oil prices. In fact, SUVs are expected to comprise 45% of global car sales. That sets a record in volume and market share. Cars and trucks burn less than a fourth of the world’s petroleum. So the real indicator would be in manufacturing, aviation, agriculture and water transport.
Price Swings Kill Renewable Energy Investments and Projects
Investors want stability with returns. A market where there are repeated rapid price swings, makes investing less attractive. It even kills some renewable clean energy projects. But the transition to solar energy has fought cynicism and disbelief before. Solar energy has been here for decades and continues to be a proven, effective and quiet method of electricity production. With no moving parts, gears or machinery, the solar energy systems last for decades supplying power long after they are paid off. The world’s transition to renewable energy might be hampered by fluctuating fossil fuel prices, but Solar will continue to expand.
MN Solar Energy and More
If you’re In Minnesota, and interested in a transition to solar energy ,you’re in luck. A family run firm called Renewable Solar Resources has spent years working to support the transition to solar energy systems on residential and commercial properties. Renewable Solar Resources believes in a clean energy future and has found solar to be an incredibly reliable energy source. Solar panels, inverters and solar storage continue to become ever more efficient, making solar an extremely affordable option for renewable energy of today and the future.