Will oil's drop hurt renewable energy?

Suddenly cheap oil prices may spur economic re-calculations across the board, but many analysts are sticking with a still-sunny outlook for renewable energy take up.

"Inevitably, there will be some impact because we think the high oil price is a key driver [for] renewable energy," said Flora Chang, an energy analyst at Bernstein Research. But cheap oil will likely only delay some projects, not derail renewables' advance, she said, sticking behind Bernstein's November report giving a strongly positive outlook for the sector in Asia.

Read More Solar and Wind Energy Start to Win on Price vs. Conventional Fuels "It will take share from oil and coal in the energy mix," she said. "Solar is still cheaper than [fossil-fuel derived electricity]. It's just now that the difference is smaller," she added, noting technologies such as solar are especially important in developing areas, such as parts of India, where sunshine is abundant and there isn't an existing electrical grid.

Bernstein's mid-November report stressed a strongly positive outlook for renewables in Asia.

Read More Commentary: Oil prices will go up again-are we ready? "Renewable energy is a technology. In the technology sector, costs always go down. Fossil fuels are extracted. In extractive industries, costs (almost) always go up," it said. "Renewable and fossil fuel cost per unit of energy are now roughly comparable in many places... but heading in opposite directions," the report said. "New, superior technologies don't split markets with old, inferior technologies." The oil technology -- fossil fuel -- has certainly seen a precipitous price decline recently. Brent crude prices (CME:Index and Options Market: .SGICBRB) have tumbled 35 percent over the last six months driven by an oversupply from the North Sea and Atlantic Basin amid increased production in North America. But others also noted that renewable energy use may not suffer much.

Read More Solar power's stunning growth: US generation up 100 percent this year "Crude oil price weakness unlikely to exert pressure on wind and solar, as oil is not a substitute," UOB KayHian (Singapore Exchange: UOKH-SG) said in a Thursday note on China's renewable energy sector. "It is very rare for a country to use crude oil as a major source of power generation," it said, noting that within China, at least, renewables are almost solely used for power generation. Indeed, in China, Europe and the U.S., natural gas provides more competition for renewable energy than oil, noted Xizhou Zhou, senior director at IHS Energy. In these regions, natural gas is generally traded independently of oil, with its link to crude prices weakening, he noted. "In the short term, utilities might want gas more than renewables," he said, but he doesn't expect the lower fossil fuel prices to affect renewable demand much in the short-to-medium-term. IHS expects oil prices could remain low for the next couple years, and it's only likely to affect renewable demand if they remain relatively low for longer than that, he said.That's partly because renewable energy generally receives subsidies from governments, a practice likely to continue, Zhou said. Coal, which is in wide use for power generation in China, has always been cheaper than renewables, but the 40-60 percent decline in coal prices over the past few years hasn't dented growth in China's renewable energy business, he noted. Climate change factor Price isn't the only driver behind the pickup in renewable energy use, UOB KayHian noted, citing climate change concerns.

"The U.S.-China deal on climate change will ensure an unchanged direction in China's national strategy on the development of renewable energy sector," it noted, citing the U.S. agreement to emit 26-28 percent less carbon in 2025 than in 2005 and China's pledge that clean energy sources will account for 20 percent of its energy mix by 2030, up from around 4.5 percent last year.

Read More The future of energy: You may be walking on it To be sure, in the wake of oil's decline, renewable energy shares have lost ground. For example, the Powershares WilderHill Clean Energy (NYSE Arca: PBW) exchange traded fund (PBW) is down around 30 percent from its March peak, while the First Trust Nasdaq Clean Edge Green Energy (QCLN) ETF (QCLN) is down around 19 percent from its March peak.

But buying into the sector now represents "a great hedge" if oil prices suddenly spike higher, the Bernstein report said.

Read More Strange bedfellows: Solar power meets oil drilling "The cost of sunshine does not change over time. It is not the cost of solar today versus the price of oil today that is the relevant consideration. Rather, it is the cost of solar today versus the price of oil for the next 20 years," the report said.

-By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1