Corporate giants such as Google (NASDAQ:GOOG) are now delving into the business of solar power, and a key industry group says adoption will only deepen as energy from the sun catches up to the grid and possibly becomes the cheapest way of generating electricity.
As the economic feasibility of solar continues to advance, it's likely more companies will enhance profits by either fixing operations on solar power or investing in programs that lead to its development and adoption. Solar (photovoltaic) will be a game changer, said James Prendergast, IEEE senior member and executive director. As the cost of electricity from solar continues to decrease compared to traditional energy sources we will see tremendous market adoption, and I suspect it will be a growth limited only by supply.
Continue Reading Below
Some of the worlds biggest companies have already invested in the alternative energy. Dow Jones, which is owned by News Corp. (NASDAQ:NWSA), also the parent of FOX Business, is installing a 4.1 megawatt solar power system at its 200-acre campus in South Brunswick, N.J., and Google on Tuesday unveiled its largest investment in solar projects to date.
The tech giant is teaming up with SolarCity to open a new $280 million fund to help residents build solar power systems on their homes. The fund is targeted toward people who desire solar power but do not want to make the large upfront payment to purchase the systems.
Companies are likely entering the market because of the economic feasibility and potential financial benefits of solar PV, according to Prendergast. Solar energy requires high capital costs but lower operating expenses, while grid power requires relatively low capital costs and high operating expenses.
To homeowners that capital cost can be an impediment for moving forward, he said. What Google has done is remove some of that barrier.
In opening a financing option, Google is able to generate returns on its investment with little operating costs, he said. Solar is becoming attractive to industry primarily due to the economic reasons, he said. From Google's perspective, it is very much consistent with their core values.
The worlds largest technical professional association, IEEE said solar photovoltaics is gaining momentum and is poised to challenge fossil fuels. Within the next few years solar energy may approach grid parity, where the cost of solar energy will be almost equal to the cost of deriving energy from alterative sources, according its study.
As solar PV continues to become more affordable, its likely that more companies will try to power their own operations using solar panels, such as Dow Jones' office in New Jersey, particularly since solar panels enable them to derive a significant benefit from a virtually unused space, such as the roof.
The organization said it is set on helping industries adopt solar successfully while convening with experts to overcome barriers to broader solar PV system adoption. IEEE is hosting a conference next week where it will discuss the future of solar power with key industry leaders, according to Prendergast.
Solar PV capacity has been increasing at an average annual growth rate of more than 40% since 2000, according to the International Energy Association. By 2050, the association expects that solar PV will provide 11% of global electricity production. Yet the industry still faces challenges as it struggles to compete with traditional power sources and other forms of alternative energy, and it still desperately craves new technologies and financing that may improve its cost effectiveness.
Theres a really healthy competition on the technology front right now, said Steven Ringel, IEEE Senior Member and Director of the Institute for Materials Research at Ohio State University.