Global Warming Examiner

Solar Breaks Oil Price Dependence

The price of oil should not directly affect the demand for solar cells. Solar creates electricity while oil is used for transportation. Solar will be more affected by the ability of utilities to burn more coal, cost of natural gas (alternative to solar assuming you can't burn coal), price and availability of wind power.
Tax credits for solar power are currently the biggest factor in demand. Due to governments indecisive nature on future credits, solar stocks can have very large price swings as expectations change with political fortune. US government will be deciding on extending credits that expire the end of this year.

Solar Shorts Keep On Rising Even As Oil Surprises

When you compare the cost of solar to other energy sources, solar used to be compared to the cost of coal. Since it will be very difficult to build a new coal-fired power plant now due to global warming considerations, the cost of solar should now be compared to the cost of natural gas. Maybe this is why solar seems to track with oil prices. New solar electric production will displace natural gas electric production. The cost of natural gas is rising while the cost of solar is dropping.

There are also new applications for solar that could add to demand over the years. Toyota is planning to put solar panels on its Prius in 2010. This could be a developing trend with all electric and hybrid electric cars. As I discussed on my website, solar on a car is cost effective. The solar energy is displacing more expensive gasoline so the electricity produced on a car is worth 31.5 cents per Kwh based on $4.00 gasoline. At $5.00 gasoline the electricity produced is worth 40 cents per Kwh.