Overview of the Solar Energy Industry

Solar photovoltaic (PV) technology is a key driver in the renewable energy sector and is projected to account for 21% of global power generation by 2030, increasing to 43% by 2050. The rapid growth of solar energy has consistently outpaced analyst predictions, largely due to unexpected declines in costs driven by advancements in efficiency, such as improvements in perovskites, silicon cells, and cadmium telluride (CdTe).

By 2035, renewable energy is anticipated to represent 60% of global power generation, with solar contributing 21% of that total. By 2050, renewables are expected to dominate, making up 90% of global power generation, with solar comprising 43%.

The global solar value chain is predominantly controlled by Chinese companies, particularly at the ingot and wafer stages. This dominance is facilitated by sophisticated industrial clusters in provinces like Jiangsu, Anhui, and Zhejiang, which together account for 60% of China’s module production capacity.

Europe remains a significant market for solar energy, accounting for 15% of global demand. The region, along with the United States, is expected to see substantial growth in solar PV production capacity, driven by shifts in government policy and new incentives. For example, the European Green Deal aims for net-zero greenhouse gas emissions by 2050, and the U.S. Inflation Reduction Act offers new incentives for renewable energy.

By the late 2020s, renewable energy sources like solar and wind are expected to be cost-competitive with the marginal costs of fossil fuel power. By 2030, the cost of new solar or wind installations is projected to be lower than that of generating electricity from existing coal or gas plants. Solar PV is anticipated to become economically favourable over coal and gas across all global regions due to its lower levelized cost of electricity.

Significant capital expenditure is being directed toward renewable energy, with an estimated $400-500 billion expected to be invested in solar, wind (both onshore and offshore), and storage in the U.S. alone by 2030.