One problem: the value of renewable energy rises and falls with fossil fuels. If oil is dirt cheap, well, solar panels aren't worth much. A few people will pay a premium for cleaner energy but most can't afford it.
The cost to extract shale oil is roughly $40/ barrel. Oil sands are similarly expensive to extract. If oil were to stay at a low enough price for a prolonged period, shale oil and tar sands operations would cease production entirely, limiting supply and increasing the prices.
At $40 per barrel, oil is not economical to produce electricity, but remains viable as a vehicle fuel.
It's almost entirely reversed. As more and more vehicles become electric (and less expensive to operate), demand for oil declines.
Also, oil and electricity aren't so much directly in competition with each other while the EV market remains small. Natural gas, yes, but that was already cheap.
(I never considered doing it myself - a dangerous hassle, and in any case the FIT scheme required an approved installer and a <4kW scheme. Storage or offgrid would be completely infeasible, it's too seasonal.)
Natural gas and oil prices [2] are not tightly coupled [3].
[1] https://economicdashboard.alberta.ca/NaturalGasPrice [2] https://www.macrotrends.net/1369/crude-oil-price-history-cha... [3] https://en.wikipedia.org/wiki/Natural_gas_prices#/media/File...
Thus if renewables were selling into the open market the price for their electricity would indeed be determined by the fossil fuel plants. Yet the vast majority of renewables being installed world wide are doing so under more favorable deals.
Only very strict regulations could decouple the prices of oil and renewables.
Coal is rapidly falling out of the mix [2] [3] [4], and natural gas is complimenting renewables due to its firm dispatchability and throttling speed (evening duck curves). As soon as the price of natural gas spikes, battery storage becomes incredibly attractive financially (its already attractive enough to replace the most expensive single cycle gas peakers).
Electricity when the sun is shinning and the wind is blowing will be incredibly cheap (1-2 cents/kWh), and you’ll end up paying a premium (6-8x multiplier) if you need power when renewables aren’t generating (and your power comes from natural gas or batteries). Market forces working as intended.
Google shifts compute to when and where is the most environmentally friendly based on renewables generation [5], powered in part by Tomorrow/electricitymap.org [6] [7]. Expect to see more large electrical consumers take similar actions in the future, further increasing the rate of renewable deployment. You’ll also see electric vehicles charging when renewables are producing, using market price signaling.
[1] https://www.lazard.com/perspective/lcoe2019
[2] https://www.npr.org/sections/coronavirus-live-updates/2020/0...
[3] https://abcnews.go.com/International/wireStory/austria-shuts...
[4] https://www.independent.co.uk/environment/climate-change-coa...
[5] https://blog.google/inside-google/infrastructure/data-center...
[7] https://www.electricitymap.org/?wind=false&solar=false&page=...
Fun fact: On sunny days, California alone generates more electricity (10GW/hr) from solar than Australia generates from coal across the entire country. There’s a lot of sunlight hitting the Earth each day.
However, I also wouldn't be surprised if we went the other direction as well. The expanse of possibility is so wide that it invokes some anxiety. I have no predictive capability in this environment, which terrifies me.