In 2022, the demand for clean energy sources will overtake the supply. Investments into new and renewable energy technologies are expected to rise to around US$500 billion globally.
Governments, businesses, and individuals have largely shifted their focus to sustainable energy and less-polluting sources of energy because of the escalating environmental and climate change concerns. New research and reports suggest that 80% of the world’s population would prefer to live in a nation where green power is the main source of electricity.
Renewable energy sources include solar, wind, waves, and sun-dependent thermal power. While these energy sources may not yet be able to supply all our energy needs, they can play a crucial role in reducing carbon emissions and addressing the climate crisis.
Solar energy has seen a boom in development and investment, particularly in the last decade. The global installed capacity of solar photovoltaic (PV) systems more than doubled between 2010 and 2020, growing from 17 to 46 GW worldwide.
Solar power is clean, renewable, and inexhaustible. It can be generated anywhere in the world and does not rely on fossil fuels, which are currently under considerable pressure due to the climate crisis. In the right circumstances, it can be a viable alternative to grid-connected electricity generation.
Key Facts About Solar Energy
The United Nations has dubbed the next 10 years the “era of climate action”, with unprecedented investments, policy changes, and innovation required to tackle the climate crisis. While we may still have some miles to go before reaching peak greenhouse gas emissions, the international community is determined to drastically reduce carbon footprints and become almost completely reliant on renewable energy sources.
Here are some stellar facts about solar energy that you may not know.
1. Fossil fuels are the main cause of global warming.
The Intergovernmental Panel on Climate Change (IPCC) recently stated that “there is no room for doubt that human activities, especially the burning of fossil fuels, are the main drivers of climate change in the twenty-first century”. The fossil fuels that the IPCC are referring to include petroleum, natural gas, and coal. The report also states that “if the last two decades are any guide, then there is no reason to suspect that the situation will improve in the foreseeable future”. The causes of climate change are complex, but the main one is undoubtedly derived from the burning of fossil fuels. Despite the need for climate action, fossil fuels still play a crucial role in global energy supply, with coal powering ~60% of the world’s electricity generation in 2022.
2. Solar energy is clean.
The production of solar energy does not emit greenhouse gases, meaning it does not contribute to climate change. This is especially beneficial for those concerned about climate change, as this type of energy is seen as a “bridge” to more sustainable sources of energy generation. The International Energy Agency (IEA) states that “solar energy is clearly the future of electricity”, and forecasts that the industry will grow to 120 GW worldwide by 2030.
In addition to being a sustainable energy source, solar energy has been recognized for its ability to generate power at times of Day and Night, increasing its overall capacity and flexibility. The IEA has stated that “solar energy is the most efficient, cleanest, and renewable source of energy currently available”. It is always available, as it can be generated whenever there is sun exposure, and its sources of energy are inexhaustible. With these advantages, it is not surprising that solar energy has become such a popular choice, particularly among those seeking to reduce their carbon footprint.
The fact that solar energy is clean is also one of the primary reasons behind its growth as an investment option. Green bonds are a relatively new and increasingly popular option for institutional and private investors seeking to raise capital and invest in sustainable energy sources. In 2022 alone, green bonds will raise over US$11 billion in investments specifically for sustainable energy projects, demonstrating the growing preference for clean energy among both corporations and financial institutions.
3. It’s a reliable energy source.
The IPCC report discussed the impact that climate change will have on electricity generation. The most prominent implication is that traditional energy sources will become less reliable, as extreme weather conditions will increase the number of power outages. This is a key consideration for those seeking to generate energy in the evening, as traditional energy sources become less efficient when generated during periods of low load. In the evening, when electricity demand is at its peak, many traditional sources of energy are less able to supply the demand. This is where solar energy comes into play, as it is able to generate power even at night, making it a more reliable option for those seeking to avoid evening electricity bills.
4. It’s affordable.
The cost of solar energy has fallen considerably in the last decade, with systems that offer sufficient capacity and power becoming affordable for the average household. In many places, the cost of a kilowatt hour (kWh) is no longer comparable to the cost of a kWh from traditional sources of energy, such as coal or gas; the price of solar is now rivaling, and in some cases even below, the cost of traditional energy. Many states and jurisdictions, including California, New York, and the United Kingdom, have additional subsidy schemes and tax breaks that further lower the cost of solar power. With these dynamics at play, it is little wonder why solar energy is becoming such an attractive option for economic and financial institutions, as well as households and businesses seeking to lower their carbon footprint.
5. It’s flexible.
While many traditional sources of energy, such as coal and gas, are relatively inflexible sources of power that can only generate electricity when burned, solar energy allows for greater flexibility, as there are a variety of ways in which it can be harnessed to generate electricity. This is important in the context of climate change, where greater energy efficiency and resilience to fluctuations in power demand are desired. For instance, a solar farm can store solar energy in its battery banks when the sun is shining, and release the energy when needed. This is in contrast to a conventional power plant, where the demand for electricity must be anticipated and built-in capacity added whenever there is a surge in demand. Battery storage and smart solar inverters have made a significant contribution to the flexibility of solar energy, facilitating real-time energy generation and making it more viable as a “dispatchable” energy source, meaning that it can be quickly and easily deployed and taken offline when needed.
6. It’s scalable.
The production of solar energy can be scaled up or down depending on the size of the installation. Smaller scale solar installations, such as home solar systems and community gardens, can be produced and deployed in a much more cost-effective and efficient manner than large-scale solar power plants, particularly when taken into consideration the additional capacity that can be brought online when additional systems are connected together.
There are a variety of advantages to solar energy that make it an attractive option for economic and financial institutions, as well as households and businesses seeking to lower their carbon footprint.