Solar is on fire, so to speak. According to a J. D. Power Utilities Industry Outlook report, “Solar megawatt capacity soared 24% in 2017 and grew another 8% in the first 9 months of 2018.” Since 2001, total solar generation worldwide has grown by 50% annually.
While the trend goes full tilt, there are particular pockets of the United States more predisposed to solar adoption. “We’re seeing that 43% of electric utility customers nationally are considering solar power, with the highest concentration of them located in Hawaii, Vermont, New Mexico, Oregon, and California,” the J. D. Power report says. “The biggest obstacle to adoption among the 57% who aren’t interested is cost.”
That may explain why, as costs have fallen, renewable energy usage has been rising rapidly. According to a McKinsey Global Institute report, new solar power plants being contracted today are being bid at below $0.03 per kilowatt hour (kWh)—about one-tenth of the cost of solar plants just six years ago. If that pace continues, unsubsidized solar and wind energy could be competitive with the cost of thermal coal or natural gas generation by 2025. As of now, wind and solar are 4% of total power generation. But by 2035, experts predict, renewables could account for as much as 36% of the global electricity supply and cost roughly 350 billion in expenditures. Even today, in certain regions, renewables are competitive with fossil fuels.
Obstacles to adoption
Integration, scaling and storage issues are the major obstacles to adoption. As tech innovations offer better and better solutions, the obstacles almost melt away. According to the McKinsey report, “China’s National Energy Administration in January 2017 announced it is scrapping construction of 85 planned coal plants and will invest $350 billion in renewable energy sources. In India, as much as 40% of power could come from non–fossil fuel sources by 2030.”
Reductions in overall energy demand
A significant shift to renewables would help meet rapidly growing demand for electricity, which is set to outpace overall energy demand in the coming 20 years. The beauty of renewables is that not only do they replace fossil fuels, but they also reduce overall demand for energy.
How? Renewables do not incur the heat losses associated with fossil fuel power generation. Moreover, renewables lend themselves to sector coupling—the combination of power, heat and mobility. The same energy used to supply homes and offices can also be used to power cars and other transportation.
Solar efficiency improvements
Solar has found new ways to improve efficiency and reduce costs, thanks to back contact cells for solar PVs (cells without electric contacts on the light-collecting side) and improved thin film materials for solar PVs. This includes efforts to improve manufacturing quality of solar panels to create less waste.
Large-scale diurnal storage needs present a new hurdle for the industry to overcome. With an assumed tipping point reached in 2025, by 2035 large-scale storage will be necessary to keep pace with growth. That’s because the fluxing nature of solar generation demands large scale renewable energy storage. Scalable energy storage methods that take into account potential diurnal and seasonal energy demand and generation patterns are integral to solar’s burgeoning future.
Learn more about Franklin Energy’s Grid Optimization solutions by scheduling a meeting with an expert.