In 2016, solar energy continued its growth as an industry, with several new record-breaking milestones. Photovoltaic technology, or PV, installed capacity increased by 17% over the previous year, reaching 104.8 GW. This makes the PV industry the world’s second-largest electricity generator, after fossil fuels. Additionally, the PV market size grew by 12% in 2016 to reach US$286 billion, with a further estimate projecting it will hit $500 billion by 2020.
Solar Industry Growth
The solar industry saw an overall increase in investment and production, resulting in a 33% rise in installed capacity in photovoltaic (PV) cells and a 24% increase in solar panel production. The growth in investment and capacity is set to continue in 2017, with several new projects getting underway across the globe. In fact, the market is now approaching capacity, prompting concerns about solar energy sustainability. The International Energy Agency (IEA) states that, while solar energy is a growing source of electricity, we need to ask ourselves, “Is this growth sustainable?”
Several solar industry records were set in 2016, with PV capacity crossing several important thresholds, including 100 GW, 200 GW, and 500 GW. These marks represent a significant shift in the solar market, which until recently, has been dominated by smaller projects. In fact, only a handful of countries have managed to deploy larger-scale PV projects, with China leading the way, followed by the U.S., Brazil, India, and Australia. These projects were designed to provide power for hundreds of thousands of homes and businesses, making them the largest of their kind.
PV Installed Capacity
Gross domestic product (GDP) is a commonly used measurement of the power of a nation’s economy. Many see the installation of photovoltaic technology as a key indicator of a country’s progress. As such, governments and businesses across the globe are investing significantly in large-scale solar energy projects. This is highlighted by the fact that global PV installed capacity doubled in 2016 to reach a record 104.8 GW. This is an increase of 17% over the previous year, and is expected to rise further in 2017, with several large-scale projects, particularly in China, set to come online.
Record-breaking Solar Panel Production
The production of solar panels continued to increase in 2016, reaching a record 207.7 GW. This represents a 24% increase from 2015, and is expected to rise further in 2017. The main driver for the increased production was the development of new facilities to meet the demand for this renewable energy source and the subsequent increase in employment opportunities. Between now and 2020, the International Energy Agency (IEA) projects that PV demand will rise by 50%. This figure accounts for a growing number of consumers deciding to install solar panels at home to contribute to electric vehicle (EV) mobility. If the current trend continues, it will not be long before we reach peak electricity demand. In fact, there are already signs that this is happening, as demand rises while supplies remain consistent.
The global investment in solar energy was also up in 2016, with $25.9 billion invested in the sector, compared to $23.4 billion in 2015.
However, investment across all industries and countries remains low, with the world’s two largest economies, China and the U.S., accounting for over 85% of all investment in 2016. The European Union (EU), India, and Japan are also high up on the list of largest investors, investing $6.7 billion, $5.7 billion, and $5.1 billion, respectively. This is likely due to the fact that solar energy is still seen as a relatively new phenomenon and, as a result, novel and innovative projects continue to be sought after by investors.
Part of the problem with reaching peak electric demand is that we are not prepared for it. As a result of decades of under-investment, the world’s energy infrastructure and environments are nearing the end of their lifespan. To ensure energy security and sustainability, we need to consider alternative energy sources, such as solar energy. This was the main message of the Global Panel on Sustainability in Solar Energy, which was convened by the United Nations (UN) in 2015 and released its report in January of this year. The report suggested that we consider ways of utilizing solar energy while minimizing harmful effects.
The Bottom Line
While the world is waking up to the reality of climate change and is actively embracing renewable energy sources, such as solar, the industry continues to face a number of challenges. One of the main concerns is around the sustainability of this energy source. As a result of the rapid growth in recent years and the increasing demand for electricity, we are now approaching capacity across the globe and, as a result, more power-hungry appliances and electronics are being created.
The good news is that we have seen the creation of several innovative companies and individuals pushing the boundaries of what is possible in terms of solar energy. The development of new technologies, such as photovoltaic cell and panel production, and the further optimisation of existing ones, such as solar rooftops, is set to lead to significant increases in efficiency and reductions in CO2 emissions. Ingenu, a company specialising in the manufacture of energy efficient appliances, has created a new efficiency standard, Ecodesign 2.0, that was specifically designed to reduce energy consumption across all sectors.
However, there is still work to be done. The UN report noted that, while PV is a viable and sustainable option for generating electricity, we need to consider innovative ways of reducing our dependence on fossil fuels, such as through electric vehicles (EVs). With support from the U.S. Department of Energy (DOE), several companies, such as Better Place, have created feasible and sustainable models for the mass production of EVs. Additionally, innovative companies, such as Stem, are taking a different approach, creating entirely new industries, such as the solar vacuum cleaner, which sucks up particles from the air as you vacuum, cleans them as you circulate and breathes new life into old appliances.