Climate change has already severely and drastically impacted the world we live in. Natural disasters, misaligned temperatures, and mass extinction of animal species are occurring at an unprecedented pace. In light of this, the shift from fossil fuels to renewable energy sources is essential and, some may argue, inevitable. Solar energy is one of the low-carbon energy sources that can help the transition towards becoming carbon-neutral.
Why solar energy?
In just one hour of the day, the sun supplies enough power to satisfy the total annual global energy demand. However, the main challenge is how to harvest this energy in the form of solar radiation effectively and efficiently. Solar photovoltaic (in short, solar PV) is the most advanced technology to date to harvest energy from the sun.
Modern solar panels do not require direct irradiation anymore. Daylight alone is enough to generate electricity; even snow-covered solar panels show small generation values up to a snow layer of 15cm. However, more electricity is generated on bright and sunny days and in regions with stronger irradiation.
What about investments in solar energy?
Solar energy, more precisely solar PV, has seen the most significant investment share that any energy source has seen in the past decade. This makes it the fastest-growing and cheapest energy source to date. We most commonly express the price of energy in levelized costs of energy (LCOE).
We have already blogged about the LCOE’s of solar PV – make sure to check it out!
The success of solar energy originated decades ago, when R&D investments saw immense increases, alongside public funding initiatives and a mix of various regulatory and economic instruments. These include feed-in tariffs and minimum targets for generation from renewables in electricity systems.
What do experts say about solar energy?
According to the IEA, if solar is to succeed even further then it requires decreases in costs, improvements in efficiency and a faster deployment worldwide.
In the Faster Innovation Case of the IEA (reaching net-zero emissions by 2050), low-carbon power generation needs to see a more rapid deployment, “requiring a rate of growth equivalent to adding the entire US power sector every three years.” Renewable electricity capacity would need to see annual additions of around four times that of 2019.
In terms of electrical output, this would mean adding 524 TWh every year. That is almost 73% of the total worldwide solar PV output of FY2019.
According to IRENA, around 60% of the newly installed capacity in 2019 was recorded in Asia, with China as the leader. Japan, South Korea, and India have seen substantial growth too.
Newly emerging markets, such as Vietnam and other Southeast Asian countries, have proven themselves to be on track to become major players within the solar PV market soon. Ever decreasing costs, especially in module prices, are a dominant driver in the rapid growth, development and deployment of solar.
How have costs developed?
Over the last decade, price drops between 87 – 92% have been recorded for crystal silicon modules sold in Europe, depending on the type. Further, bifacial modules (a newer technology that can produce power from both sides of the panel, instead of solely the top like the standard mono facial modules) have seen massive cost declines as well.
Where are we headed?
When looking at current growth rates, renewables account for three quarters of the energy generation’s total growth. Supportive policies, maturing technologies, and sharp cost reductions over the past decade have enabled cheap access to capital and more affordable solar energy power plants, in comparison to coal and gas.
A rising share of renewable energy is challenging the reliability of electricity grids and consequently their supply security. Energy storage and eliminating the intermittency gap (day and night, summer and winter) are essential for transforming our power systems.
As the cheapest and most accessible energy source to date, solar energy will have to play a vital role if the transition to carbon-free energy sources is successful.