The global energy industry is currently undergoing a major transition, with many traditional energy sources being outperformed by renewable energy and energy efficiency. The International Energy Agency (IEA) expects that by 2022, 35% of the global energy supply will come from renewable sources, up from 20% in 2021.
This transformation will have a significant impact on the world’s largest economies, which will need to adapt their infrastructure and business models to the new reality. If we are to avoid disastrous climate change, the industry will need to embrace sustainable energy sources and find new ways to generate and consume energy efficiently.
Solar power is a rapidly growing portion of the renewable energy market, with many large installations providing power to entire regions. This article will provide an overview of solar power, its drivers, and the role it plays in the global energy market.
Why Are More People Choosing To Install Solar Panels?
In the past, solar power was seen as being expensive, and only available in select markets with sufficient sunlight. This perception is slowly changing, as costs have come down and solar power has become a more viable option for consumers across the globe. Here are the main reasons why more and more people are choosing solar power:
Reduced Energy Costs
In recent years, the cost of solar power has dropped significantly, which has made it more accessible to consumers across the globe. Large scale solar installations, such as solar parks and power plants, can generate electricity more efficiently than smaller scale models, meaning that they can produce more energy for less money. The global solar market was valued at US$16 billion in 2016 and is expected to rise to a value of US$27.7billion by 2027.
The cost reduction is a direct result of the rapid increase in efficiency and capability of photovoltaic (PV) solar cells. Due to advances in silicon technology and solar cell efficiency, the price of solar electricity has dropped by 50% in the last five years, from an average of 5.5 cents per kilowatt-hour (kWh) in 2011 to 2.83 cents in 2018.
The rapid cost reduction has made solar power an interesting option for consumers, especially as the industry continues to consolidate, with larger firms entering the market and taking advantage of the costs synergies created by scale. This trend will continue, as global research firm, the Energy Authority, predicts that the cost of solar energy will fall to 2.5 cents per kWh by 2023.
Increased Flexibility
The rise of renewable energy and the transition to a cleaner energy future will provide new opportunities for business. One of the most significant opportunities is the increased flexibility to generate and consume energy when and where you need it. In the past, power plants and utilities needed to generate sufficient energy to meet peak demand, which meant that they needed to be run all the time, even when energy generation was at its lowest. This model didn’t apply to everyone, as some consumers had solar power installations and could generate their own energy whenever they needed it, reducing their energy costs.
Renewable energy sources and energy efficiency will bring a paradigm shift in terms of flexibility and the way we generate and consume electricity. More and more consumers will be able to generate their own power and have it backed up by a utility provider, when convenient. This will lead to decreased dependence on old energy sources and decreased carbon footprint.
New Technologies
Solar power and the industry sector it inhabits is in the middle of a technological revolution, with many innovations expected to emerge in the next few years which will make solar panels more efficient and accessible to consumers. Here are some of the more innovative technologies emerging and changing the game for clean energy: