Cost of Renewable Energy vs. Traditional Energy

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

1. With solar energy systems, power producing equipment is installed vs. fossil fuels systems, where energy is purchased from a supplier.  There is no capital investment made, once the fuel is used, it is gone.
2. Manufacturing, raw materials and research and development costs of solar power is higher than conventional system because of their smaller market 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 is not expensive at all.  Consider this; we are burning through our reserves of oil much faster than new oil deposits are being discovered.  It is true, there are still billions if not trillions of barrels of oil yet in the ground.  However, most of that will never be extracted.  It is too expensive in terms of energy and capital to get to.  Therefore, it will stay where it is.  In the mean time, the amount we pay for our gas, oil, and electric in no way reflects the true costs associated 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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