I recently came across the following chart and it has me rethinking my position on solar.
Source: Bloomberg (EIA, CIA, World Bank, Bernstein analysis )
Subsidization has always frightened me. Partially because it indicates a lack of competitiveness and partially because the political risk of the subsidy being removed is too significant and unpredictable.
Future success will rely on advances in energy storage rather than advances in solar technology. The chart above shows so called ‘grid parity’ in which solar can now be priced competitively with LNG and Brent. Its mind boggling how quickly the cost has decreased and while the pace of improvement is clearly unsustainable it is likely to decrease further.
From a cursory glance the industry is still too speculative but I put the chart up as a placeholder to remind me that at some point there will be good investments.