Global Solar Set to Surge, But Still Falls Short of Paris Targets
The solar industry is expecting a continuing surge in the years ahead, according to two reports released earlier this month, though the rapid growth still falls short of what will be needed to keep average global warming below the minimum international target of 2.0°C.
In mid-May, SolarPower Europe reported the global industry was on track to install 800 gigawatts of new photovoltaic capacity by 2023, for a cumulative total of 1.3 terawatts, reNEWS.biz and Recharge Transition both reported. And Wood Mackenzie Power & Renewables projected that solar will be cheaper than competing natural gas plants “just about everywhere” around the world by 2023, according to Greentech Media.
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“2018 was a unique year for the entire global solar industry, as we exceeded the magic installation mark of 100 GW a year for the first time, which led the solar power sector to grow to over 500 GW,” said SolarPower Europe President Christian Westermeier. “Last year, we again saw strong cost improvements, with solar becoming the lowest-cost power generation source in more and more regions.”
“In Europe, we have entered a new era of solar growth, and with the [EU’s] recently-concluded Clean Energy Package, we have a new framework for solar that will see our technology thrive even more in the coming years,” added CEO Walburga Hemetsberger. “We now look to EU member states to put ambitious solar targets in place and ensure robust implementation guidelines in their 2030 National Energy and Climate Plans.”
The trade association found that 11 countries had each installed more than a gigawatt of solar in 2018, corporate power purchase agreements for renewables hit double-digit gigawatts for the first time, and new applications like floating solar are quickly gaining ground.
All of those factors are contributing to rapid cost declines that will soon see utility-scale solar undercut new combined-cycle natural gas plants in markets where gas still rules, WoodMac reported. “By 2023, we think solar’s going to be cheaper than gas almost everywhere around the world,” said Senior Solar Analyst Tom Heggarty.
“New combined-cycle gas plants remain competitive with new utility solar in many big markets today, from China to the UK to South Korea,” Greentech Media writes, citing Heggarty. “But that will no longer be the case by the early 2020s, as equipment costs continue to fall and competitive auctions proliferate.”
In contrast to SolarPower Europe, Wood Mackenzie reported disappointment that the global solar market had failed to exceed 100 GW in new capacity installations, as it was expected to do, largely because of slowdowns in China and India. “But setbacks in any one market—even China—are becoming less important as the industry takes root around the world,” Greentech notes, citing WoodMac. “China accounted for 35% of global solar installations through 2018, but that share will fall to 27% in the 2019 to 2024 period.”
The story cites Australia, Europe, and Saudi Arabia as three promising markets for solar development.
The mostly optimistic coverage still points back to an April study by the International Renewable Energy Agency (IRENA) that shone a light on the remaining gap between renewable energy deployment and the level of activity that will be needed to stabilize meet the targets in the 2015 Paris Agreement. “Cumulative energy system investment would need to be increased by 30% through to 2050 in favour of supporting renewable energy and energy efficiency—from around US$93 trillion under current and planned policies, up to $120 trillion,” CleanTechnica reported at the time. “This investment figure also requires $18 trillion be directed towards power grids and energy flexibility—double that of current and planned policies.”
Greentech notes that, notwithstanding the “world of opportunity stretching out before the solar industry,” low prices and intensely competitive bidding are making solar a tough place for companies to make money. With returns to investors in the 5% to 7% range, “these are pretty challenging markets to operate in,” Heggarty said.