Global Solar Installations to reach 200 GW a year by 2025
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Global solar installations can reach 200 GW a year according to a new research by IEA. The report says that solar PV could supply 16% of the worlds’ energy and I see no reason to dispute this forecast. Solar energy prices have fallen by almost 70% in the last 6 years and solar electricity price has reached grid parity in a number of places. The prices will keep falling as scale increases and efficiency of solar photovoltaic cells keep improving. The biggest cost cuts are not coming from component price declines, but improvement in installations processes and BOS costs. Financing has also become a major driver cost reduction in solar installations, as people are becoming more confident about the longevity and sustainability of solar PV installations.
New innovations in financing and the entry of long term only funds has helped grow the sector massively. The 200 GW figure is very achievable and I think it has the potential to exceed this target. Solar installations have already increased from just 8 GW in 2008 to almost 50 GW this year. This means a 6 times growth in 6 years. Another 4 times growth in 10 years is hardly outlandish.
IEA says that solar PV will be responsible for 16% of the world’s electricity consumption by 2050 and solar thermal could make up another 11%. I am not that confident about solar thermal, given that solar thermal projects are closing left right and center. Even many of the solar thermal companies such as Areva, Siemens etc. have completely exited the sector. Solar PV along with energy storage in the form of lithium ion batteries should become cheaper than solar thermal with storage in a few years, given the massive amounts of money being spent on improving the scale of lithium battery production and R&D. Solar PV also has massive advantages over solar thermal power, so I strongly disagree with the 11% projection for solar thermal energy.
The summary is that the solar PV industry is going to be a hugely successful industry for a long time to come and is a great growth industry. It is also helping the planet in numerous ways in reducing pollution, proving power to the underprivileged and fighting climate change.
