The renewable-energy business is expected to keep growing, though more slowly, in contrast to fossil fuel companies, which have been hammered by low oil and gas prices.
A few years ago, the kind of double-digit drop in oil and gas prices the world is experiencing now because of the coronavirus pandemic might have increased the use of fossil fuels and hurt renewable energy sources like wind and solar farms.
That is not happening.
In fact, renewable energy sources are set to account for nearly 21 percent of the electricity the United States uses for the first time this year, up from about 18 percent last year and 10 percent in 2010, according to one forecast published last week. And while work on some solar and wind projects has been delayed by the outbreak, industry executives and analysts expect the renewable business to continue growing in 2020 and next year even as oil, gas and coal companies struggle financially or seek bankruptcy protection.
In many parts of the world, including California and Texas, wind turbines and solar panels now produce electricity more cheaply than natural gas and coal. That has made them attractive to electric utilities and investors alike. It also helps that while oil prices have been more than halved since the pandemic forced most state governments to order people to stay home, natural gas and coal prices have not dropped nearly as much.
Even the decline in electricity use in recent weeks as businesses halted operations could help renewables, according to analysts at Raymond James & Associates. That’s because utilities, as revenue suffers, will try to get more electricity from wind and solar farms, which cost little to operate, and less from power plants fueled by fossil fuels.
“Renewables are on a growth trajectory today that I think isn’t going to be set back long term,” said Dan Reicher, the founding executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University and an assistant energy secretary in the Clinton administration. “This will be a bump in the road.”
Many renewable companies have projects around the world and have benefited from government efforts to address climate change. That has helped drive down costs of wind and solar equipment and made the industry more resilient to economic swings.
In addition, because developers can build wind and solar farms more quickly than natural-gas, coal and nuclear plants, Mr. Alonso said, the renewables have become more attractive financially. In difficult economic times like these, he said, private equity investors like Quantum are eager to seize on businesses that can quickly scale up and start earning money.
The solar industry expected to add more panels in 2020 than in any other previous year, said Abigail Hopper, president of the Solar Energy Industries Association. That won’t happen now, but the industry is still poised to add capacity.
“We believe, over the long run, we are well positioned to outcompete incumbent generators,” Ms. Hopper said.