The prices for fossil fuels keeps falling. In the 1980s that was all it took to virtually end government and private sector investment in wind, solar and other renewable sources of power.
But that hasn't been the case this time around. Global investment in renewables was up approximately 17% in 2014 and shows little sign of weakening. Why?
According to a think piece by Scott Nyquist at McKinsey and Company's Insights and Publication's page, there are a number of factors driving the market. Crucially, that fossil fuels may have maxed out their efficiencies, while renewables still have a way to go:
There is no reason to believe that the economics of renewables are going to deteriorate. Coal could get cleaner, but no one really expects a big change in its efficiency, and tighter regulation is driving up costs. For gas, the best technologies in use are already highly efficient. But for renewables, particularly solar, substantive improvements in cost and efficiency are not only possible but likely.
To read the whole article, visit McKinsey's Insights and Publications page.