How You Can Make Renewable Energy Cheaper Than Gas

Chevron Solar Tower for Oil Production: World's largest solar thermal enhanced oil recovery demonstration facility

What if oil companies could provide you renewable energy as they do the ability to pump at your gas station? Oil companies are investing in green however, not as much as they could because of low consumer demand.

During this second biggest oil boom in history, the current energy landscape is reshaping due to unanticipated forces such as new technology and fluctuations in the energy industry.

Last week, oil, as well as solar companies' earnings included ExxonMobil falling 18 percent in profit from last year whereas, First Solar's profit more than doubled.

"While global energy demand is increasing-by about 2030 we will need two times more," says Kaushik Rajashekara, professor at the University of Texas in Dallas, adding that there will be a need for "a renewable supplement" in the future."

And, oil companies are aware of this and want to remain dominant within the energy sector.

It is projected that at the level of big oil corporations, large upfront investments towards green could lead to "prices of renewable energy to scale up or even be competitive to gas prices," says Simon Mui, Director at National Resources Defense Council. However, these oil giants are "only sprinkling some money into renewable energy," says Mui.

Although a self-cannibalizing business strategy, here are some of the current green investments by the big five:

  1. Exxon Mobil-Investing in developing algae-derived biofuels along with an alliance with Synthetic Genomics Inc.
  2. BP-CO2 storage project, as well as investing in biofuels research and development
  3. Royal Dutch Shell-Eight wind projects in North America generating emission-free electricity.
  4. Chevron-Solar Tower mirror project with over 7,600 mirrors to use solar energy towards oil production which reduces carbon footprint.
  5. ConocoPhillips-Energy storage project through compression of air which can later be used to generate electricity.

Consumers are a big catalyst in this shift by reducing gasoline intake, such as purchasing a hydro car. Companies will respond to this consumer demand with substantially increased funding towards green.

Recently, "there have been changes in social trends" where cars like Tesla are more affordable, "socially desirable and considered a 'cool car,'" says Adam Brandt, an expert on Peak Oil at Stanford University.

Just like how gas prices have been declining due to recent fracking technology, this can also happen within the renewable space. "U.S. entrepreneurial spirit also works in the energy sector. Just like the iPhone replaced the telephone, hydraulic fracturing replaced" previous oil drilling technologies, says Frank Wolak, a researcher from Stanford University.

If demand increases at the consumer level, there is business incentive for companies to increase investment towards energy innovation. Large investments, especially from the oil industry giants, will expedite the research and advance development resulting in cheaper technology.

Here are some solar stocks that have recently soared:

Company Stock Year-to-Date Performance*
First solar FSLR 88%
Sun power SPWR 451%
Ja solar JASO 132%
Trina Solar TSL 252%
Solar city SCTY 359%

**As of November 1, 2013