Oil’s prices have been declining in the past several months, and the green industry fears that this may make them redundant in the eyes of the public. After all, when oil prices are low, the public seems to forget about the greener alternatives.
Despite falling oil prices, the oil and gas sector seems unmoved, with some companies even expanding their operations abroad. Unaoil, an oil field service provider in the Middle East, opened a strategic operating base in North Rumalia and its operations remain strong to this day.
However, experts are saying that the green industry should worry too much about the declining oil prices. That’s because there are a number of factors at play that is favorable for the renewables, including more economical solar and wind equipment that can compete well with crude oil, as well as the diversity in competition.
Last week, oil declined once more. It first fell 60% in the third quarter of last year until January 2015, settling at just around $40 a barrel until it was able to pull itself up to the $60 price mark. And while the decline in prices are making news outlets say that people will demand more oil than renewable, experts are saying otherwise. While lower prices can lead to more oil purchases by car owners, this is not the case when it comes to energy production, which makes up more than 30% of the world’s emissions. In other words, vehicles aren’t the only competition for the green energy.
Solar and wind energy competes with coal, natural gas, hydro, and nuclear power. Solar energy, in particular, is very cheap now that installing a rooftop solar system in the U.S. is only at $4 per watt, and the prices are still dropping. Back in 2008, the installation fee was at $8 per watt. It is perhaps because of this trend that the International Energy Agency is confident that solar energy will be the world’s biggest single source by 2050.
Some countries are now taking advantage of solar energy’s low prices. In Africa, foreign companies are installing solar panels everywhere in the region reach out to areas without access to electricity. Dubai, which is known for its huge oil reserves, just tripled its solar target for 2030.
Experts are saying that oil investments will possibly decline further by 15% so the green sector shouldn’t worry too much. After all, the transport sector isn’t the only market that it’s competing with.