Technology trends in solar power
Solar power is an important element in reducing the world’s carbon footprint. A recent report by IRENA suggests that to meet the Paris Climate goals, renewables combined with electrification and increased energy efficiency must achieve over 90% of the energy-related carbon dioxide emission reductions by 2050. A significant portion of this reduction potential can be achieved by scaling up solar photovoltaic (PV) capacity. According to the report, accelerated deployment of solar PV alone can lead to a significant reduction of 4.9 gigatonnes of carbon dioxide (Gt CO₂) in 2050, which represents 21% of the total emission mitigation potential in the energy sector.
The report further states that solar PV capacity must increase almost sixfold over the next ten years, from a global total of 480 GW in 2018 to 2 840 GW by 2030, and to 8 519 GW by 2050. To achieve this, there must be an almost threefold rise in yearly solar PV capacity additions by 2030, and a fourfold increase by 2050 compared to current levels. However, the report notes that the solar PV industry must be prepared for such significant growth in the market over the next three decades.
Thanks to its modular and distributed nature, solar PV technology is being adapted to a wide range of off-grid applications and local conditions. In the last decade, the globally installed capacity of off-grid solar PV has grown more than tenfold, from roughly 0.25 GW in 2008 to almost 3 GW in 2018. Off-grid solar PV is a key technology for achieving full energy access and achieving the Sustainable Development Goals.
Asia, led by China, is expected to drive the wave of solar PV capacity installations, with Asia projected to have more than 50% share of the total installed capacity by 2050. North America is projected to have 20%, while Europe is expected to have 10%. The report further notes that scaling up solar PV energy investment is critical to accelerating the growth of installations over the coming decades. This would globally imply a 68% increase in average annual solar PV investment from now until 2050, reaching USD 192 billion per year, compared to USD 114 billion per year in 2018.
Costs of solar PV installation are expected to decrease as economies of scale increase and technological improvements continue. The report indicates that globally, the total installation cost of solar PV projects would continue to decline in the next three decades, making solar PV highly competitive in many markets. The average cost of solar PV installations would fall in the range of USD 340 to 834 per kilowatt (kW) by 2030 and USD 165 to 481/kW by 2050, compared to the average of USD 1,210/kW in 2018.
Moreover, the levelized cost of electricity (LCOE) for solar PV is already competitive compared to all fossil fuel generation sources and is set to decline further as installed costs and performance continue to improve. The LCOE for solar PV is projected to continue to fall from an average of USD 0.085 per kilowatt-hour (kWh) in 2018 to between USD 0.02 to 0.08/kWh by 2030 and between USD 0.014 to 0.05/kWh by 2050.
The solar PV industry is a fast-evolving industry, with innovations along the entire value chain. First-generation technologies remain the principal driver of solar industry development and still hold the majority of the market value. Tandem and perovskite technologies offer interesting perspectives, albeit several barriers still need to be overcome in the longer term. The emergence of new cell architectures has enabled higher efficiency levels. In particular