Solar power generation has seen exponential growth in recent years. Since 2010, it has seen an output CAGR (Compound Annual Growth Rate) of 37.6%. This is an impressive surge!
What is solar power?
Solar power uses the sun’s radiant energy to produce electricity.
There are two types of solar power; photovoltaic and concentrated solar power (CSP). The former being much more widely adopted. In 2017, photovoltaic solar power accounted for 98% of the world’s solar output. There’s growing interest in CSP, but it will be some time before it gains any ground on its more popular alternative.
CSP uses large arrays of mirrors that reflect the sun’s rays to produce heat. This heat is used to produce steam which drives electric generators.
Photovoltaic solar power works differently. Here, light particles hit a solar cell and excite electrons. The resulting movement of electrons is what we call electricity. This mechanism has proven to be a reliable and cheap way to produce energy.
What is driving the growth in solar power?
There are a few drivers behind the growth in solar power generation.
The first being the world’s insatiable demand for power. The last two decades have seen vast populations in the developing world electrify. China alone produced nearly a third of the world’s solar power in 2021 at 327 TWh.
The push away from fossil fuels is another factor. In the past, fossil fuels have been the cheapest and most reliable forms of energy. However, concerns about climate change have led to the widespread adoption of renewables, which do not release harmful CO2 into the atmosphere. Governments around the world have therefore funded and incentivised solar power adoption, which has aided its proliferation.
The last is technological. Advances in solar cell efficiency and manufacturing have lowered the cost of solar power to economically workable levels. Solar panel prices have dropped around 90% since 2010. Now solar power is among the cheapest forms of energy in certain parts of the world
Where is solar power going from here?
Despite the uptake in recent years, solar power is dwarfed by other sources. Currently, solar power only accounts for around 3% of global electricity production. Whereas fossil fuels still make up almost two-thirds, even with efforts to move away from them.
The forces behind its solar power growth are likely to continue. However, the exact trajectory from here is unclear. Competition with other forms of energy is strong, particularly with those stubborn fossil fuels.
