A new study released today by Clean Edge, Inc., and Co-Op America projects solar power achieving grid parity by the mid-2010s. It lays out a plan for solar to reach 10% of our nation’s electricity if utilities, investors and policymakers are proactive in the effort. They predict economies of scale and learning by doing can cut costs of solar electricity generation from the current ~22 cents per kilowatt hour (kWh) to less than 10 cents per kWh by 2020. And the reality is price parity may be achieved as early as 2010 if natural gas prices continue to rise at their current rate for another two years.
In other energy news, the EIA reported an overall average change last week for US oil stocks as crude oil, gasoline and propane stockpiles fell slightly to historically low levels while distillates (diesel and heating oil) grew to average levels. As a result of the lower oil and gasoline stocks, their prices rose a bit. Natural gas prices increased more than 2% on worries that last week’s hot weather (we reached 99 degrees here in New Jersey) prevented the usual level of storage buildup for mid-June. Tomorrow morning the EIA will release the numbers and prices will react.
Bush and McCain began to push a lifting of the remaining offshore oil and gas drilling ban to try to give some price relief from increased supply. If the ban is reduced in certain areas, no one should go out and buy a hummer as the new supply would not come online until 2015 and beyond. Our only source of near term price relief for transportation fuels is by lowering our demand – whether it means pumping up the old bike tires for local errands or carpooling and taking mass transit to school and work. I’ll discuss the domestic oil production situation in more depth in a few days.