Dive Brief:
- The 40% drop in the price of oil over the last 6 months will not impact the solar industry because solar remains a cheaper source of electricity generation, according to SunPower CEO Tom Werner. SunPower is the second-biggest U.S. solar module manufacturer.
- The oil price drop is due to increased supply on the market created by growing U.S. production of shale oil and the decision by OPEC not to cut back its production. But because of increasing affordability, almost 60% of the world’s $5 trillion investment in new generation over the next 10 years is expected to go to solar-generated and wind-generated electricity, according to the International Energy Agency.
- A recent contract between Southern Company and a First Solar project in New Mexico set the price of solar-generated electricity at $0.0579 per kilowatt-hour, Werner said. That is significantly lower than the $0.064 per kilowatt-hour DOE estimate of the cost for natural gas-generated electricity from a new combined cycle plant starting service in 2019.
Dive Insight:
Other recent contracts in Texas, Chile, and the United Arab Emirates put the price of solar-generated electricity below the cost of fossil fuel-generated electricity, Werner said.
SunPower recently announced plans to triple its module manufacturing capacity over the next 5 years. Its 350-megawatt cell factory is on track to produce up to 100 megawatts in 2015. A planned next-generation cell and module facility will have an 800 megawatt capacity. And SunPower will expand operations to manufacture over 1 gigawatt of low-concentration photovoltaic (LCPV) modules.
With no company owning more than an 8% share of the $120 billion solar market, Werner recently called solar one of the biggest opportunities "in the history of markets," and predicted solar will be ten times bigger by 2035, with cumulative revenues of $5 trillion.
