1xFor environmentalists, investors and technicians – indeed, anyone involved in the solar power sector – 2023 was a shining example of industry’s potential. The headline news: Solar capacity globally leapt 74% last year, for a record 346 gigawatt (GW) of new additions, bringing the total installed worldwide to 1,419 GW.[1] A further milestone: 28 countries individually installed at least one GW of new solar capacity during 2023, countering the idea that solar growth is only a China phenomenon.
Much of the world now seems set on a solar trajectory. Photovoltaic (PV) technology accounted for around three-quarters of all new renewable capacity in 2023, far exceeding growth in wind and hydropower markets. The accelerated adoption of solar power last year keeps alive COP28’s ambitious target of tripling renewable energy by the end of the decade.[2] Given solar’s soaraway 2023, if renewables can maintain the average rate of expansion they achieved between 2002 and 2023 (16% annually), that target becomes increasingly realistic.
Such rapid growth will bring not just vast environmental benefits, but opportunities for economic growth and energy security, too.
Despite increasing global investment in solar energy, China, unsurprisingly, still dominates. New additions rocketed 55% year-on-year, dwarfing the global average of 5.9%.[3] Worldwide, China claimed some 63% of all new solar additions 2023. In the first quarter of 2024 alone, new solar capacity grew four-fold on 2023’s high water mark. The 45.74 GW of new capacity installed between January and March all but guarantees China will set even loftier solar benchmarks during 2024.
As solar technology continues to fall in price, many countries are stepping up their interest – and not just in the developed markets of the West.
Certainly, wealthier and more technologically-mature nations made sustained solar progress, such as Germany (15 GW solar additions in 2023), Italy (10 GW), the Netherlands (5 GW), Spain (10 GW), the USA (25 GW) and the UK (4 GW). However, they have been joined by many nations from emerging markets, particularly in the Middle East and Latin America.
Note, for example, solar’s rapid expansions during 2023 in countries such as India (more than 10 GW), Brazil (12 GW), Chile (2 GW), Mexico (2 GW), Saudi Arabia (2 GW) and the UAE (2 GW).[4]
Solar is facing a bright future wherever one calls home.
China sets new benchmark
The International Energy Agency (IEA) describes China’s solar expansion in 2023 as “extraordinary”.[5] Tellingly, China alone approved as much solar PV during 2023 as the entire world managed the previous year – a genuine game-changer in the evolution of green energy.
Why such a stellar year in China? The IEA primarily credits the country’s supportive policy environment which provides long-term contracts for energy projects – just the kind of safety net investors need to enable them to speculate with confidence.
China’s solar enthusiasm remains, appropriately, sky high. The country is expected to authorize more than half of the world’s new renewable capacity between now and 2030. The impact will be dramatic. China currently relies on fossil fuels for around 70% of its electricity generation, but by the end of the decade almost half of the country’s electricity will be generated by renewables.[6],[7]
The country now boasts a third of the world’s 15 biggest solar farms.[8] These mega-facilities include the Xinjiang array in the northwest of the country, which opened in June 2024, and whose 5 GW PV capacity makes it the world’s largest ever solar installation. China is also home to six of the world’s seven largest solar panel manufacturers, led by Tongwei Solar in Sichuan Province, which in 2022 achieved a shipment capacity of 28.1 GW.[9]
Despite solar-friendly policies gaining traction in rival markets like the USA and India, China is expected to retain its dominance of the solar supply chain for the foreseeable future. If current forecasts prove accurate, by the end of the year China will control anywhere from 80% to 95% of global solar manufacturing, driven by cheap labor and a relative abundance of raw materials. Most countries will continue to find it cheaper to import Chinese PV panels than to manufacture their own domestically.
As the Chinese experience demonstrates, price matters. And solar has never represented better value for money.
Solar prices prove persuasive
In an economic contraction and cost of living crisis, the kind currently unfolding across much of Europe and the USA, money matters. So it is significant that during 2023 the prices of solar panels fell by almost a half.[10] Why such a sharp decline in costs?
Partly it is accounted for by the increased pace of manufacture, which brings associated economies of scale. But it is also due to supportive policies being adopted worldwide. Such legislation can streamline the planning process for new solar farms or provide tax incentives for renewable energy investments.
Some 130 countries have now passed pro-renewable policies in response to growing public demand for greener forms of energy.[11] In the UK, notably, a new Labour government was recently voted into office with a policy package promising to make Britain a clean energy superpower as part of a Green New Deal. The new government wasted little time in granting approval for three huge new solar farms in the east of England, along with a ‘rooftop revolution’ simplifying the process for installing solar panels on domestic properties.
The EU is likewise acting vigorously to support solar. In March 2024, the European Parliament approved legislation requiring member states to include solar equipment on all new buildings, and retrospectively add it to existing infrastructure where practical. Lawmakers everywhere will be watching closely; if the initiative succeeds, it could serve as a template for similar schemes in other countries.
From the perspective of manufacturers and energy suppliers, 2023 also delivered compelling news on the value of solar technology. Some 96% of newly installed renewable capacity – including utility-scale solar PV – delivered lower energy generation costs than comparable new coal and natural gas plants.[12]
Solar electricity generation costs fell to approximately US$ 60 in 2023, less than gas (US$ 70), coal (US$ 117) and nuclear (US$ 180).[13] Even allowing for additional costs involved with integrating variable renewables into the energy grid, solar is tipped to become cheaper still as the decade progresses.
As green energy costs decline, fossil fuel costs have increased. The prices of oil, gas and coal have risen sharply since 2000. Recent trends have proved sensitive to world events, with prices spiking abruptly after Russia invaded Ukraine, then falling back as global stockpiles were released to meet pent-up demand.[14]
Although politicians might think only about the current electoral cycle – and CEOs often struggle to see beyond the next annual report – solar’s value-for-money proposition is undeniably robust in the longer term. Studies suggest the prompt adoption of renewables, primarily solar, over fossil fuel alternatives, could save the world up to US$ 12 trillion by mid-century.
Investment in solar power seems timely and logical, especially considering technological breakthroughs in the past year which promise to take the concept to an exciting new phase.
Technology transforming solar sector
The solar sector is buzzing with innovation and promise. Last year saw the continued evolution of PV technology, with new ways to hone performance and extract greater commercial value.
Perovskite tandem solar cells are emerging as the next big PV technology to watch. These cells – which in trials over the past 12 months have repeatedly beaten solar efficiency records – intersperse the conventional silicon cell base with perovskite. Perovskite’s special crystal structure absorbs different light wavelengths to silicon, so together they exploit more of the solar spectrum. More electricity per panel means greater return on investment, and more security for homes and businesses relying on green energy.
Already perovskite tandem cells are exceeding 33% efficiency in trials; traditional silicon cells rarely hit 30% efficiency.[15] Commercial-scale perovskite tandem cells are expected to be ready for deployment this year.
We are also witnessing the rise of ‘bifacial’ solar panels – two-sided panels, for installation perhaps as fencing, capable of capturing light from both sides at different times of the day. These panels replace the typical opaque back-sheet with either glass or transparent polymer, allowing sunlight to penetrate from either angle, and charge the cell. Tests have shown bifacial panels generate 10%-20% more power than single-sided alternatives.[16] Fewer than half of current panels are bifacial, but that is all set to change, with bifacials tipped to capture 70% of the global market by 2030.
As urban planners and architects capitalize on the potential of building-integrated photovoltaics (BIPV), a new generation of transparent solar panels are slowly supplanting traditional windows. The panels are made either by covering glass with a special PV coating, or by trapping semi-transparent light absorbers between two glass panes. Transparent window panels are less efficient than rooftop panels and currently cost 30% to 40% more than normal glass; however, they are built to last up to 50 years and will trigger incremental savings on energy bills.[17]
Ongoing advances in artificial intelligence (AI) also have repercussions for the solar industry. AI algorithms are increasingly being used to balance energy generation with consumption, meaning smoother integration with the grid, more reliable renewable energy supplies, and cheaper bills for all.
Given the pace of technological progress we need ways to store the endless sunlight falling freely from our skies. Enter the new wave of battery energy storage systems (BESS), capable of safeguarding supplies of renewable energy even when clouds block the sun or dusk falls on our solar arrays.
Storage is key to success of solar energy
BESS technology, in which Jameel Energy’s flagship renewable energy business FRV is a pioneering force, stores electricity from renewable sources in times of energy excess until needed during periods of energy deficit.
The industry is currently dominated by lithium-ion batteries, replacing nickel manganese cobalt cathodes as the most efficient and affordable storage medium. Yet lithium’s reign might be approaching an end. Lithium is a rare earth mineral, expensive and environmentally damaging to mine, so rival battery technologies such as sodium-ion and sodium-sulfur are proving valid substitutes.
Sodium-ion might have lower energy density than lithium-ion (120-160 watt-hours/kg versus 170–190 watt-hours/kg), but with 20% cheaper production costs and a smaller environmental footprint, it is little surprise that multiple manufacturers have started producing sodium-ion BESS over the last year.[18]
The global BESS market almost tripled in size in 2023 with 45 GW of new installations. The coming year is expected to see growth of more than 100 GWh, led by China, where BESS costs have fallen 43% in the space of a year.[19] Forecasts suggest a 21% annual growth rate in BESS capacity between now and the end of the decade, leading to a worldwide market of 442 GWh by 2030.
The USA’s Inflation Reduction Act (IRA) of 2022 demonstrated the importance of legislative support for the rollout of energy storage systems. The IRA offered tax credits for solar investors and manufacturers, and provided a Greenhouse Gas Reduction Fund worth billions of dollars.[20]
Encouragingly, similar policies are progressing through parliaments in Japan, South Korea, Australia, and across Europe (via the EU’s REPowerEU plan) and Latin America. All come with the promise of more protection for ambitious BESS investors around the world.
Active across five continents, FRV manages a portfolio of BESS projects, including Contego, West Sussex, and Clay Tye, Essex, in the UK. Clay Tye, which came online in March 2024 with an output of 99 MW and capacity of 198 MWh, became Europe’s joint largest operational BESS facility upon inauguration.
Contego delivers an output of 34 MW and capacity of 68 MWh. FRV is also spearheading two further UK BESS schemes, both in the Midlands, together generating some 100 MW of energy. The two lithium-ion battery storage systems will import and export energy to the distribution network.
These schemes build on the success of FRV’s 15 MWh Holes Bay battery project in Dorset, UK, operational since 2020. FRV is steering similar projects in Australia, with a new BESS plant at Gnarwarre, in Victoria, and a hybrid solar/BESS plant at Dalby, Queensland. FRV also has a majority stake in a BESS project in Greece, and in February 2024 partnered with AMP Tank Finland Oy for a utility-scale battery energy storage system (BESS) project in Finland.
Given these grand advances in harvesting and storing energy from sunlight, why are we not yet living in a solar-powered world – and what steps can the industry take to hasten our journey to a cleaner energy future?
Will challenges take the shine off solar?
Despite the huge advances made in the industry during the last year, solar power has not yet delivered a decisive blow in the battle against climate change.
In 90 minutes, enough sunlight strikes the earth to provide the entire planet’s energy needs for one year. While solar energy is abundant, it still represents only a fraction of the world’s current energy mix according to the International Energy Association. With only a tiny fraction of the sun’s rays being captured, a vast amount of solar potential goes to waste every minute of every day.
It is a sad irony that the sunniest countries often have the least installed solar capacity. Markets with above average amounts of sunlight account for just 14% (204 GW) of newly-installed solar capacity in 2023.[21] Installations in hot, dry Africa, for example, represented just 0.2% of global additions in 2023 – or less than 1GW of energy. In a region home to one fifth of the world’s population, a more active solar industry could prove transformative to living standards. Legacy problems such as low GDP, interstate strife, inconsistent regulations, and a lack of access to funding, are all hindering the wider rollout of solar power in Africa.
Similar problems impede swifter solar progress on the Indian subcontinent, where a shortage of modern research and development facilities, coupled with lengthy investment payback periods, leaves many projects languishing.
The problem is a global one. Kadri Simson, EU Commissioner for Energy, has warned there were more solar projects stuck in approval pipelines than actually under construction in 2023.[22] Simson argues for rapid reform of permissions processes, as well as new rules governing land use, and a greater emphasis on promoting community acceptance.
The macroeconomic environment will also be worth monitoring. The IEA notes that since 2022 central bank interest rates have jumped from below 1% to an average of 5%, applying unnecessary brakes on the solar economy in emerging markets.[23] The economic performance of the USA will be scrutinized with particular interest next year, especially with a new President taking office.
No one is pretending, of course, that seismic shifts on the scale of a ‘solar revolution’ come without a hefty cost. The IEA cautions that clean energy investment will need to reach US$ 4.5 trillion per year by 2030 to keep global warming with 1.5oC of pre-industrial times.[24]
The International Renewable Energy Agency (IRENA) is similarly concerned, pointing out that progress in renewables is still falling short of the additional 7.2 TW of renewable power needed over the next seven years to hit Paris Agreement goals.[25]
“We are still in the early years of this, our solar century,” says Fady Jameel, Deputy President and Vice Chairman, International, of Abdul Latif Jameel. “However, as 2023 has demonstrated, the future could scarcely be brighter for this green, clean source of energy. “If current projections hold, our global community of nations will add more renewable energy to the grid over the next five years than it managed over the past hundred years – a landmark accomplishment and testament to the influence of international cooperation.
“Challenges persist, but the inspiring rise of solar over the past year illustrates the power of private capital in forging a more secure future for communities everywhere.
Each new solar scheme must be celebrated as another crucial step on the path to net zero.”
[1] https://ember-climate.org/insights/in-brief/2023s-record-solar-surge-explained-in-six-charts/
[2] https://www.irena.org/News/pressreleases/2024/Jul/Tripling-Renewables-by-2030-Requires-a-Minimum-of-16-point-4-pc-Annual-Growth-Rate
[3] https://ember-climate.org/insights/in-brief/2023s-record-solar-surge-explained-in-six-charts/
[4] https://ember-climate.org/insights/in-brief/2023s-record-solar-surge-explained-in-six-charts/
[5] https://www.iea.org/reports/renewables-2023/executive-summary
[6] https://www.iea.org/reports/renewables-2023/executive-summary
[7] https://e360.yale.edu/features/china-renewable-energy
[8] https://www.theecoexperts.co.uk/solar-panels/biggest-solar-farms
[9] https://www.theecoexperts.co.uk/solar-panels/largest-solar-panel-manufacturers
[10] https://www.iea.org/reports/renewables-2023/executive-summary
[11] https://www.theecoexperts.co.uk/solar-panels/solar-drives-record-renewables-growth
[12] https://www.iea.org/reports/renewables-2023/executive-summary
[14] https://ourworldindata.org/grapher/fossil-fuel-price-index
[15] https://www.technologyreview.com/2024/01/08/1085124/super-efficient-solar-cells-breakthrough-technologies/
[16] https://www.alternergy.co.uk/blog/post/bifacial-solar-panels-what-are-they
[17] https://www.cnet.com/home/energy-and-utilities/new-solar-technology-could-make-your-windows-way-more-functional/
[18] https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/enabling-renewable-energy-with-battery-energy-storage-systems
[19] https://about.bnef.com/blog/global-energy-storage-market-records-biggest-jump-yet/
[20] https://www.seia.org/sites/default/files/Inflation%20Reduction%20Act%20Summary%20PDF.pdf
[21] https://ember-climate.org/insights/in-brief/2023s-record-solar-surge-explained-in-six-charts/
[22] https://www.weforum.org/agenda/2024/02/renewables-energy-capacity-demand-growth/
[23] https://www.iea.org/reports/renewables-2023/executive-summary
[24] https://www.weforum.org/agenda/2023/09/iea-clean-energy-investment-global-warming/
[25] https://www.irena.org/News/pressreleases/2024/Mar/Record-Growth-in-Renewables-but-Progress-Needs-to-be-Equitable
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