To what extent are renewables like solar driving down the cost of oil? The price of oil has declined by roughly 66% in the past couple of years, and a lot of people want to know why:


Some people are saying that the recent trend of oil prices dropping means the global economy is consuming less oil and therefore economic leading indicators suggest financial collapse in the future. 

They are wrong (today) because oil consumption has been increasing continuously over the last 20 years. 



Other, more sensible ideas are that (today) oil prices have been decreasing because oil supply outpaces oil demand. But it hasn't been enough to compensate for the price drops. Its not like oil production has increased by 66%. At most, it has increased by 15%, more likely something like 10%. 



So, prices have fallen faster than the production surplus have increased.

Could it be alternative energy technologies like solar (or fear of them on the part of oil producers) that are causing this additional decline in oil prices?




TED talk that provoked this question: http://www.ted.com/talks/al_gore_the_case_for_optimism_on_climate_change


could someone please add the category "substitution" to this question
There are several reasons from supply and demand side. From production side, for example, contrary to anouncement of cutting production (from Saudi Arabia, Venezuela and Qatar), Saudi Arabia continued to increase its production. 
(There are some political reasons behind like Saudi Arabia would like to make some pressure on Russia and USA but I don't enter into this discussion as it does not concern an economic mechanism.)

Also, there are some other countries like Canada, Iraq and Iran where the oil production rises, which pushes prices to fall. (I think you can easily find some data about that, I have seen somewhere in web.)

From demand side, there is a risk of deflation in Europe and contraction of demand in most of developping countries, which also affects production side and could make a downward pressure on energy prices.

Another reason could be use of energy efficient technologies (like some cars or machines in some industries.)

What theory says about this issue ?

In fact, the existing literature on environmental economics says that price of exhaustible resources tends to increase as they become scarce. (it is the famous Hotelling rule)

There is a relationship between the use of renewable energies and exhaustible resources. Normally, an economy starts with use of exhaustible resources. Theory says that when economy grows in time, the exhaustible resource becomes scarce and its price increases. In this case, economy will use exhaustible resources until the marginal benefit from its use is equal to price of backstop (solar, wind etc...) 

(A very interesting paper to see about subject is Withagen and Van der Ploeg (JEEM-2012))

In this current situation, it is sure that there are less incentives for economies to switch to clean technologies as price of exhaustible resources decreased to much. 

To respond to your question, the use of renewable energy is increasing in world but I don't think at all that the huge fall in oil prices is due to "increasing" use of renewables. 
This trend for renewables is always present since some decades but until now, oil prices have always increased.

As I have tried to explain, I don't really think there are robust correlations between the drop of oil prices and renewable energy use.