How Does the Future of the Solar Energy Market Look?

My name is Sergey Fedorov, and I am the co-founder of a solar equipment store. We have been working in this market for 5 years. In this article, I will tell you how the solar energy industry is doing and why to me solar is the “bitcoin” of future energy.

Growth: World Leadership in 5 Years

Over the course of 20 years, the total power capacity of solar energy has grown 500 times. In 2002, there were only 2 GW of installed solar power. In 2021, the total capacity reached one TW.

So far, solar power only covers 3.5% of the world's electricity production. However, in the next 5 years, solar power is expected to almost triple and reach an installed capacity of 2,350 GW.

According to the International Energy Agency (IEA), by 2024, solar power will surpass hydropower in total installed capacity, become larger than gas by 2026, and larger than coal by 2027.

Asia is where solar energy blooms and prospers. The largest manufacturers are either Chinese or have manufacturing facilities in China: Jinko Solar, Trina Solar, JA Solar, Longi Solar, and Canadian Solar.

Looking at the top manufacturers, you can recognize a few popular names: Japanese company Panasonic, and Korean brands LG and Hyundai.

Although China installs solar the most, the United States tries to keep up. The total capacity of home PV systems installed in 2022 in the US increased by 40% compared to 2021 - from 2,800 MW to 3,900! In Europe, solar power is the most popular among Germans.

What's the reason for solar power’s sudden rise in popularity? Let's talk about the pros of solar power.

Pros: The Cheapest Energy in History

• The key to the growth of solar energy is its low price. Over the past 10 years, its cost has fallen by almost 90%. In the early 2010s, one megawatt-hour (MWH) of solar energy cost over $350. You could get the same MWH with coal and gas for $100. In 2022, an MWH of solar energy fell to $20. It's the cheapest energy source in history, according to the IEA.

• Solar power can be used by homeowners, unlike wind or hydroelectric power. A solar system on the roof produces enough electricity to cover the needs of a house. If panels produce more power than needed, the excess can even be sold to the grid. In the U.S., a home solar system can save $100-$150 a month, depending on the state. Panels pay for themselves in 7-8 years and last more than 25 years. Many Americans look at solar as a good long-term investment.

• Another benefit of solar power is that it’s green. Solar panels don’t produce carbon emissions. That is why scientists are pinning their hopes on solar energy in the fight against climate change. Developed countries are focused on replacing fossil fuels with green energy. Among all renewables, solar is growing the fastest.

Not everything is equally good about solar energy though. Let’s talk about its disadvantages.

Cons: Clouds and Recycling

• The biggest problem with solar panels is their variable production. Their performance depends on irradiance. On cloudy days, the panels’ output drops by 20-40%. At night, the panels don't work at all. If you want to live in a home powered only by solar energy, you'll have to add batteries to the system.

• A solar panel system is a serious commitment. Panels become part of the house, and if you ever move, it’s going to be difficult to take them with you to a new place. However, if you decide to sell your house, solar panels will increase its value by an average of 4%, according to real estate company Zillow.

• Another problem is that we don’t have a good way to recycle PV modules yet. Solar panels are mostly aluminum and glass which are hard to reuse. There are private companies that are ready to take on this problem, such as Solarcycle. In some countries, recycling projects are already underway — for example, the US plans to launch a recycling program in Washington by 2025.

Future: Floating Plants and Solar Cloth

What new technologies related to solar power can we expect to see in a few years? Let's take a look into the future.

People have learned how to install panels not only on land but also on water. Floating solar plants are great news for countries where every square meter of land counts.

Floatovoltaics also work better: water cools PV modules, and their production is 5-10% higher compared to land PV systems.

The Japanese have developed a fabric with photovoltaic elements. You put on a jacket made of solar fabric, connect the jacket to your phone, and it won't go dead while you're walking down the street and listening to music.

It sounds like science fiction, but the crudest prototypes can already be found on Amazon.

Solar skins will turn panels into advertising space. Such skins let the sunlight for the panel through and display anything on its surface. Not only can you display ads, but skins will also make blending solar panels with the roof easy.

In conclusion, I hold the conviction that solar power possesses the potential for great success.  But the solar industry will have to overcome some serious challenges on its way. I'll talk more about them in my next article.