The research report indicates that theworld has reached an irreversible solar critical point, and solar energy willbecome the most efficient and cost-effective form of power generation in thecoming years.
Last week, researchers published a paper titled“Trends in Solar Energy Transformation”. This paper studies the relativematurity and technological progressiveness of various forms of power generationfrom now to 2060, including solar energy, renewable energy and fossil fuels.
By 2050, solar photovoltaic powergeneration will dominate the global energy structure, and by 2044, it willaccount for more than half of global electricity generation. This is in starkcontrast to the field of fossil fuels. It is expected that from 2020 to 2050,the proportion of natural gas and oil in the global energy structure willdecrease from 23.93% to 7.78%, and oil from 2.74% to 2.49%. The fate of solarenergy also runs counter to other forms of renewable energy generation. It isexpected that the relative contribution of onshore wind and hydropower in theglobal energy structure will decrease from 2020 to 2050.
The continuous expansion of the globalsolar energy industry is attributed to technological innovation and effectivepolicies, as well as the strong “learning rate” associated with the industry,which helps to create a continuously self-evaluating and developing industry.There are many reasons why the solar energy industry has such a high learningrate. Its simplicity, modularity, and large-scale replicability bring a largenumber of learning opportunities, which are related to the learningopportunities of the entire electronics industry.
In fact, many spillover effects originatefrom the computer industry, and innovation and improvement in solar photovoltaicpower generation continue. For example, the commercialization of (hybrid)perovskite batteries is expected to achieve higher efficiency and lower unitprices. Due to the decrease in technical risks and the need for financialknowledge, the procurement cost of some funds has also decreased.
Another key reason for the continuousdecline in solar energy costs is the continuous decline in solar power costs.The report points out that between 2010 and 20 years, the industry's averagecost of electricity (LCOE) decreased by 15% annually, while during this period,the global installed capacity of solar power increased by 25% annually.
This coincides with the conclusion drawn bythe International Renewable Energy Agency (IRENA). IRENA pointed out thatbetween 2021 and 2022, the average cost per kilowatt hour (LCOE) of globalsolar power decreased by 3%. Although the decline was slow, it still indicatesthat the cost of new solar power installed capacity is declining, making solarprojects more financially attractive to potential investors.
Comparison of the decrease in solar LCOEbetween the United States and China, two world superpowers, and the decrease incoal and wind LCOE. From 2020 to 2050, the cost of coal power generation inboth countries increased, with the United States reaching a high of$117.37/MWh. Most importantly, during this period, the LCOE increase in China'scoal industry exceeded that of the US solar energy industry.
Compared to other renewable energy sources,these encouraging data in the solar energy industry support higher growth. Thereport points out that compared to the growth of global solar power capacity,the annual growth rate of onshore wind power capacity between 2010 and 20 wasonly 12%. If this growth rate continues, solar and wind energy will become theworld's leading energy industries within two decades, with solar energy havinga particularly significant impact.
In 2020, among the 70 regions defined bythe E3ME-FTT model, wind energy had the lowest LCOE. In regions that do not fallinto this category, solar photovoltaic, nuclear energy, or coal dominate. By2030, this situation will reverse and solar power generation will dominate inmost parts of the world.
We assume that the global cost reductionper kilowatt of photovoltaic modules is uniform, and the solar irradiancevaries in each region. Due to this global spillover effect, most regions of theworld are likely to obtain low-cost solar energy.
However, the global energy network needs tobe expanded and upgraded to meet most of the demand. Earlier this year, thesolar energy industries in the United States and Europe expressed concernsabout their ability to integrate their growing solar project portfolios intotheir respective grids.
This includes how to cope with seasonalchanges, and batteries are not in the industry. The cost of managing a largeamount of intermittent energy may offset further reductions in the costs ofsolar modules and wind turbines, hindering their rapid promotion. The unevensupply of funds to support investments in solar and wind energy acrosscountries may also be a problem.
The supply chain may not be prepared forsuch rapid technological promotion. Finally, political resistance in areaswhere fossil fuel usage or trade volume has decreased may inhibit thegovernment's willingness to embrace the solar revolution.
However, ultimately, there is a global willto support this transformation through investment and policy formulation. Theinvestment in the global solar industry will peak in the next decade, andsustained global investment will be a prerequisite for the solar industry toaddress these challenges.
As a senior solar energy company, MULTIFITCompany will adhere to the development mission of “efficient and energy-saving,allowing more people to enjoy green energy”, based on the photovoltaicindustry, continue to invest in research and development efforts, with theoriginal intention of promoting high-quality development of the photovoltaicindustry, innovate and break through, continuously develop high-quality andefficient products to serve users, and lead the formulation of industrystandards and high-quality development. Continuously providing more competitiveproduct solutions and high-quality services to global customers, contributingwisdom and strength to building a zero carbon world.
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