The global solar energy market was valued at US$16.9 billion in 2016 and is projected to grow at a CAGR of 11% – 13% from 2017 to 2022.
Soaring energy costs and the growing desire for more environmentally friendly forms of energy supply led to the development of alternative energy sources such as solar power. By harnessing the power of the sun, solar energy provides a clean and sustainable option for global energy needs. Currently, there are over 400 million solar-powered lightbulbs used worldwide.
While solar power is a promising energy source, it’s not without its challenges. In order to fully realize the industry’s potential, industry players must overcome a number of economic, social, and technological hurdles. In this article, we will discuss some of the major challenges facing the solar power industry and how innovative companies like SolarWorld are looking to tackle them.
Economic Challenges
The economic challenges in the solar industry stem from a combination of factors. The first and probably the most significant factor is the current state of the global economy. In 2016, the world experienced its biggest economic downturn in decades and several industries, including solar, saw their profits decline by over 40%. The global solar market value decreased by 7% to US$16.9 billion in 2016 (from $18.5 billion in 2015) due to the economic slowdown and the subsequent drop in consumer demand. This trend is expected to continue in the near future as the world remains mired in economic uncertainty.
Additionally, the solar energy industry is still in its infancy and requires significant investment to develop. With no historical data available for comparison, it’s hard to say exactly how much investment is needed. However, it is generally agreed that the industry will require a significant amount of capital to scale up production and establish a global market presence.
Technological Challenges
The growing need for more environmentally friendly energy sources has led to the development of alternative energy sources, one of which is solar power. However, developing countries such as China have imposed strict environmental restrictions that limit the use of traditional energy sources such as coal and oil. This has resulted in a number of technological challenges for solar power companies.
Traditional fossil fuel-based industries employ a large number of people and contribute significantly to economic growth. However, they also cause significant damage to the environment through carbon emissions and resource depletion. The fossil fuel industry has a significant presence in almost every country and region of the world, resulting in a large number of patents filed each year.
Traditional methods of generating electricity using fossil fuels result in significant carbon emissions and pose a major threat to the environment. However, new techniques developed in the 21st century enable alternative forms of power generation, one of which is solar power. Companies like SolarWorld utilize photovoltaic technology to generate electricity without any harmful emissions and are now able to sell their products to customers in China, where environmental protection is a top priority.
China implemented the Energy Conservation Law in 2015 which encourages residents and businesses to use energy-saving devices and improve energy efficiency. The law supports the development of green energy and encourages residents to purchase and install solar power systems. In fact, China is the world’s largest market for both residential and commercial solar power systems, with an estimated value of around US$16 billion in 2016.
According to the SolarWorld website, the company has offices and manufacturing plants in all regions of China, including Beijing, Shanghai, and Guangzhou. This enables them to provide customer service and delivery for their products quickly and efficiently. Furthermore, the company utilizes their local knowledge and networks to provide fast, outstanding service to their customers – even in remote areas. This level of service differentiates them from competitors and makes them a go-to source for anyone seeking quality solar products for home or business use.
Social Challenges
The growing acceptance of solar power and the desire for more environmentally friendly energy sources has led to the development of a number of social challenges. One of the most significant is the lack of public awareness regarding solar energy. Many people are not yet familiar with solar power or the benefits it provides. Therefore, companies must actively educate the public regarding the advantages of solar energy and the role it can play in reducing global greenhouse gas emissions.
Another challenge relates to the disparity in income between developed and developing countries. The primary industries in developing countries such as China and India are dominated by small to medium sized businesses, while the global economy is dominated by large corporations. The disparity in income between the two contributes to discrimination and unfair trade practices, which puts developing countries at a disadvantage.
Political Challenges
The need to reduce environmental damage and fight climate change remain major concerns, which many people feel passionately about. The political ramifications of this are evident. Developing countries with significant environmental concerns feel threatened by the prospect of competition from fossil fuel industries. As a result, they have attempted to blunt the effects of climate change by implementing a number of political barriers, including import tariffs and quotas, to restrict the use of fossil fuels.
Countries like China and India which have significant control over the global economy and trade are able to wield significant political influence. They have restricted the use of fossil fuels and encouraged the development of alternative energies, leading to significant market share gains in the process.
It’s clear that the solar industry faces a number of economic, technological, and social challenges. However, it is also clear that these challenges can be overcome with the right business models, strong leadership, and community involvement. The industry has tremendous potential to provide sustainable energy to billions of people and reduce global carbon emissions – but only if these challenges are addressed.