Congress Solar Settlement in Freiburg, Germany. Some rights reserved by daveeza

Published on June 12th, 2012 | by Jeremy Bloom

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Why big oil hates solar energy so much

Solar Settlement in Freiburg, Germany. Some rights reserved by daveeza

It’s not just that solar energy is a competitor to big oil, coal, and gas – it’s that solar cuts into big oil’s biggest profit center.

In arguing against solar, they’re always happy to tell you, “The sun doesn’t shine at night, heh heh heh.

But nighttime isn’t when extra power is needed. People are asleep, office buildings are closed, factories are silent.

Peak power usage happens during the day – which just so happens to be the time when the sun is shining.

This doesn’t impact the average consumer directly – most homes are on a single-price plan for their electric power (although part of the push for smart meters is to use price incentives to get folks to spread out their power usage by, for instance, washing their clothes and dishes at night when there’s less demand).

But factories and industrial users DO pay different rates for their peak and off-peak power usage. They pay a LOT more for power at noon than they do at midnight. In fact, peak power surcharges are a huge profit center for the industry.

As RenewEconomy points out (via Meteor Blades at Kos), in Germany, where solar has been growing rapidly,”Solar PV is not just licking the cream off the profits of the fossil fuel generators… it is in fact eating their entire cake.”

They then trot out two graphs (from the website Renewables International) that show this vividly (click on the graphs for a larger view):

Solar peak pricing chart via Renewables International

“The first graph, from 2008, shows peaking power prices rising to around €60/MWh and staying there for most of the day…

“The second graph shows a brief leap to €65/MWh around 9am, before the impact of solar PV takes hold – erasing the midday peak entirely and leaving only a smaller one in the evening. The huge bite out of day-prices is also a bite out of fossil fuel generators’ earnings and profits. Note that the average peak price in the second graph is barely higher than the baseload price.”

Solar peak today, via Renewables International RenewEconomy added that a Deutschebank report estimated solar was slashing peak electricity prices by 40 percent! No wonder the fossil fuelindustry has, in their words, “Declared war on solar”, and is trying to prevent any further subsidies to encourage solar’s growth.

Oh… and of course, the allies of fossil fuel will also argue “OMG! You don’t want solar power, because SOLAR COSTS MORE!”

Funny thing about that…

Meanwhile, in the US, the same GOP Congress that insisted we couldn’t cut tens of billions of dollars in subsidies for an oil industry that makes more money than god… because “OMG that would kill jobs”… is going to let subsidies for solar and wind power expire at the end of this year.

Funny thing about that, too…

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(Image of Solar Settlement in Freiberg LicenseAttributionShare Alike Some rights reserved by daveeza)




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About the Author

Jeremy Bloom is the Editor of RedGreenAndBlue.



4 Responses to Why big oil hates solar energy so much

  1. Pingback: Why Fossil Fuel Companies Hate Solar So Much | Cleantech Reporter

  2. Bill Woods says:

    ‘Big oil’ doesn’t give a crap about solar — the two business barely overlap.
    http://www.eia.gov/totalenergy/data/annual/diagram2.cfm

    How many cars, trucks, and planes run on solar power? What does the petrochemical industry get from solar?

  3. Joel B. Brown says:

    This is an inaccurate, confused and particularly stupid rant. To begin, Shell was investing in solar energy as early as 1986. To continue, you lump oil & gas producers/refiners in with power utilities, although they almost never are the same company (got an example of one that is?). In fact, the utilities you bad-mouth are all energy consumers (hence cheap energy = good to them). In a number of cases they are state-owned, e.g. Electicite de France. All your true believers will say “You go, Guy”, but this sort of poorly researched scribe will have zero impact on the energy policy dialogue.

    • Mary Davis says:

      Exactly, Joel is right, BP also has invested in solar energy for over 30 years, big oil happens to lead the market in renewable energy! Poor article, truly embarrassing! Learn some facts!

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