BOSTON ( TheStreet) -- The most important financial event of this decade will be called "crossover." That's the point at which solar energy becomes cheaper than fossil fuel energy.Crossover will transform energy economics. It puts a thumb down on energy prices. When costs for exploiting a fuel source go above the crossover price, that fuel source becomes uneconomic, as solar cell production scales to meet it. Crossover happens in different places, in different ways, partly because the economics of solar and fossil fuel energy are different:
- With solar, you buy and install a panel. That's your capital investment. That panel produces energy over some useful life. Once you have accounted for your capital costs, any additional energy becomes free if you maintain the panel and it keeps working.
- With fossil fuels, you first buy and install systems for burning fuel, then buy fuel. The first cost is capitalized (and relatively minor), the second is expensed (and subject to change).