New analysis from Frost & Sullivan indicates that lower oil prices will not stop the “dazzling rise of solar photovoltaic.” In a release, the firm indicated that lower oil prices would have an impact on petrol prices and manufacturing costs, but would also have implications on the power generation sector – coal, gas, nuclear, hydro, wind, solar, bioenergy, grid modernization, energy storage and microgrids.

Frost & Sullivan did indicate that it remains confident that renewable investment will stay strong and that oil is unlikely to make a major comeback in power generation, but also said “Conventional generation will continue to dominate global installed capacity, although compared to 4–5 years ago, investments in gas and in renewable energy are  projected to increase at a greater rate, at the expense of coal and nuclear.”

Frost & Sullivan Senior Consultant, Jonathan Robinson commented, “As oil account for just 5 percent of global electricity generated, and in many countries it is 1 percent or below, it is just no longer considered a viable option for electricity generation.” In contrast, solar photovoltaic (PV) is currently judged to be the hottest of the renewable technologies. Frost & Sullivan forecasts that the global solar PV capacity, which stood at 93 gigawatts (GW) in 2012, will increase to 446 GW in 2020, with China, India and North America recording the highest growth rates. Even the global leader in solar PV, Europe, will see capacity double by 2020, despite reductions in incentives during the financial crisis.

Incentives, though, are becoming less and less important for a number of key renewable energy markets. For instance, commercial solar PV in North America is increasingly becoming competitive against centralized generation, despite reductions in feed-in tariffs. Offshore wind, on the other hand, is a long way from being viable without incentives. Many US states and European countries have legally binding renewable targets that they are under pressure to try and meet, supporting the growth of renewables.

Nevertheless, conventional fuels will maintain a dominant position globally, as developing economies in Africa and Asia continue to rely on coal as a key source of electricity generation. China, which accounts for 45% of global coal capacity, will continue to build plants, although growing public concern over pollution levels will mean that investment shifts to eastern China and is at a lower level compared to the previous decade.