Why Is the Solar and Renewable Energy Industry More Profitable Than Coal
|Topics:||🛒 Consumerism, Environmental Issues, Solar Energy|
Table of Contents
In the modern world, man requires energy sources for most of activities and devices to function properly. According to Bougette and Charlie (2015), one of the main sources of energy that man has used for decades and is still used is coal. However, renewable sources of energy have gained considerable popularity in the modern times. Environmental conservationists and other clean world activists have encouraged the use of solar and renewable sources of energy claiming that the energy forms are safe for the environment and are cheaper (Acemoglu, Kakhbod & Ozdaglar, 2017). Human beings rely on power for both personal use and profitable ventures; hence, it is critical to determine which source of energy benefits the users the most. This paper argues for solar and renewable energy against coal and investigates to determine why the former is more beneficial.
The first reason why solar and the renewable energy industry, in general, is profitable than coal is that it allows the consumer liberty of producing, storing and swapping electrical energy and maintenance cost are lower thereby making it cheaper (Sener & Fthenakis, 2014). The consumer manages solar energy just like the other forms of renewable energy sources such as wind energy after installation. Once a solar panel or windmill is erected and connected to the power requirement devices, then it is the producer who managers its uses, and such a producer does not make payments to a power providing body (Taplin, 2017). Coal users, on the other hand, have to make continuous purchases of coal or coal products, and those who get the power from grids have to remit periodical payments (Dahl, 2015). This proves expensive in the end relative to the renewable energy industry, where solar, windmills and other renewable energy sources on require adequate installation fees after which no continuous pay is required. As Sener and Fthenakis (2014) assert, business owners who use solar energy and other renewable energy sources are most likely to save more since the expenses incurred after installation costs for renewable energy is lower than that of coal energy.
The other reason why embracing renewable energy sources such as solar is more profitable than the coal is because states have adopted the energy sources and developed them to the extent that the prices for solar energy recently started retailing lower than those for fossil fuel (Dahl, 2015). Owing to pressure for climate sustainability, several nations such as China, USA, and over 28 other nations have embraced green sources of energy such that the prices of solar energy are lower than the prices of coal energy (Acemoglu et al., 2017). Bougette & Charlier (2015) points out that current trend shows that by the year 2020, the solar energy will be cheaper than coal energy in all parts of the world. Because of the current lower pricing of renewable energy compared to coal in over 30 countries and the projections that the rest of the world will emulate this trend, running a business on solar or any other renewable energy form is cheaper compared to coal. Additionally, Taplin (2017) suggests that the probability of coal energy being faced out in the coming years is high and hence it presents businesses depending on it with the risk of incurring extra costs when they will have to shift to other sources of energy.
According to Melvin (2016), the current overall price of electric energy manufacture from coal is cheaper than solar energy in most nations and parts of the world. This is because some countries are yet to embrace large-scale manufacture of solar energy and other renewable energy sources. This also results from the fact that some nations have not developed the right technology to make solar energy harvesting cheaper than coal harvesting. Shankleman and Martin (2017 suggests that only developed and innovative states have managed to produce cheaper renewable energy to coal energy while most countries including the third world nations and most middle world nations struggle with embracing the culture. Because of the lower cost of coal energy in several states, Melvin (2016) argues that running business institutions on coal energy is relatively cheaper than embracing renewable energy such as solar energy. As Sener and Fthenakis (2014) states, however, most nations have initiated plans or have plans of embracing renewable energy to replace coal energy and prices of solar energy will be lower than coal energy by 2020. Institutions that have not embraced renewable energy by then will incur extra expenses making the shift hence the earlier, the better. Profit motivated ventures should make the shift solar or other renewable energy sources because they are ultimately cheaper.
The question of solar and other renewable energy sources being profitable than coal energy has elicited several debates. Solar energy is more profitable than coal because the consumer incurs fewer charges after installation and because technology has been developed that makes harvesting electricity from solar cheaper than the extraction from coal combustion. A counter opinion can suggest that coal energy is still cheaper in most nations though should not be a concern as it is projected that solar energy will retail at lower prices than coal energy globally by 2020. Solar energy currently retails cheaper than coal in over 30 nations and this numbers is projected to increase. Dahl suggests that people are still reluctant to embrace solar energy fully and this raises a new question. Are the modern millennium individuals ready to embrace renewable energy sources?
- Acemoglu, D., Kakhbod, A., & Ozdaglar, A. (2017). Competition in electricity markets with renewable energy sources. Energy Journal, 38.
- Bougette, P., & Charlier, C. (2015). Renewable energy, subsidies, and the WTO: Where has the ‘green’gone? Energy Economics, 51, 407-416.
- Dahl, C. (2015). International energy markets: Understanding pricing, policies, & profits. PennWell Books.
- Melvin, J., & Nelson, J. et al. (2016). Clinton vs. Trump: In energy, the stakes are high for renewables, coal. SNL Energy Power Daily; Charlottesville, Oct 31, 2016.
- Sener, C., & Fthenakis, V. (2014). Energy policy and financing options to achieve solar energy grid penetration targets: Accounting for external costs. Renewable and Sustainable Energy Reviews, 32, 854-868.
- Shankleman, J., & Martin, C. (2017, January 3). Solar could beat coal to become the cheapest power on Earth. Bloomberg L.P.
- Taplin, N. (2017). The real ‘war on coal’ is in China. President Trump’s efforts to support U.S. coal are tangential to the real action. The Wall Street Journal. 14 Nov. 2017.