One of the major stories dominating the news cycle today is the massive collapse in global oil prices that has happened over the last few months. But even if you somehow missed that news, you've certainly noticed that you're paying much less at the gas pump than you were even at the beginning of 2014.
And if you're really following the news, you'll have heard that along with the rock-bottom oil prices, here in the U.S. natural gas prices have also declined significantly over the past year thanks to booming shale output.
If you take these stories together, you may start to wonder: If fossil fuels are getting to be so cheap, does that mean we'll be turning away from renewable energy sources now and in the future?
Not so fast: based on some recent reports, it looks like solar and other renewables aren't going anywhere anytime soon. Not unless we want to keep paying high prices for energy.
Fossil fuel prices are going down, so why are your energy bills still going up?
As people living in New England and the mid-Atlantic have probably noticed, their energy bills have still been going up even though oil prices are as low as they've been in years. The reason for this, as Forbes reported, is that there is almost no overlap between the oil markets and electricity generation here in the U.S. Only in a very select few markets is oil used to generate power.
Natural gas, on the other hand, is used to generate electricity in a growing segment of the country. Forbes explained that, historically, there has been a strong correlation between natural gas prices and the price we pay for electricity. And yet, even though the price of this commodity is so low right now due to the strong supply, people in many parts of the U.S. are still paying more for power – especially in New England and some mid-Atlantic states like New York.
The problem is that while the cost of using natural gas to generate power is low, it costs a lot to distribute it. In the northeastern region of the U.S., there is very little existing pipeline structure with which utilities can transport natural gas. This means that both power companies and residents in the region can't take advantage of the cheap energy source.
Investment in renewables stands strong even when fossil fuels got cheap
Nor do they want to. New York and Massachusetts, in particular, have heard a considerable number of voices have been raised against creating new fossil fuel-dependent power generation and distribution capacity. In these states, legislators and consumer groups alike have expressed a desire to move beyond non-renewable energy sources and update their infrastructure and individual homes and businesses with technology like rooftop solar.
"The money has spoken: Renewables are the way to go."
Best of all, this sentiment seems to be the same across the country – all you need to do is follow the money to see how people really feel about clean energy. In 2014, venture capital investment in cleantech rose by 16 percent to reach a total of $310 billion for the year, Bloomberg reported. This was the first time in three years that investment in renewables and energy efficiency rose.
All of these investments have paid off. Thanks to technological and industrial innovations that have lowered the cost of solar, wind, etc., these clean energy sources will become available to everyone from utilities, to massive corporations to the average homeowner.
Energy prices will keep going up until and unless we do something to address the problems we have with generating it in the absence of easy fossil fuels. And the money has spoken: Renewables are the way to go.