Interesting article today in Bloomberg about the relation between the current drop in oil and renewables… or more like the lack of relationship.

The basic question of discussion in this article is: why the drop in oil is not impacting renewable developments?  After all, wouldn’t the drop in energy costs make renewables less competitive?

One possible contributing reason brought up is the price stability of renewables – a big positive of renewables that gets little appreciation, in my opinion.

Renewables tend to have most of their costs in capital expenditure – building and mounting solar panels, assembling and erecting windmills, excavating and burying a ground pump – so up front they are relatively expensive.

But after that, the costs are not just smaller (after all the wind, sunlight and ground heat are free), but reliable in their delivery.  No need to worry about some outside country deciding to commit a “sun embargo” or the price of wind inflating unexpectedly.

And that provides a lot of stability that makes long term planning much easier.