The terawatt era of PV: ‘Solar will be the gas of today’
Jan 9, 2024
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In this podcast, they discuss the rapid growth of solar energy worldwide and its potential to surpass coal and fossil gas capacity. They analyze the factors affecting solar energy growth, including grid capacity constraints and the impact of COVID-19. Additionally, they delve into the booming market for clean energy tax credits and China's dominance in solar manufacturing. The podcast also explores the current state of module supply and pricing trends in the solar industry, highlighting the oversupply of modules and potential declines in pricing. Finally, they touch on the potential for solar companies to become VPP companies and uncertainties in the solar supply chain.
30:46
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Quick takeaways
Solar capacity is projected to double or triple in the next decade, making it one of the fastest growing and most important energy technologies.
China currently dominates solar manufacturing, accounting for over 80% of the manufacturing capacity, with growth rates slowing in major markets due to grid capacity constraints.
Deep dives
Solar is Expected to Double or Even Triple in the Next Decade
Renewable energy technologies like solar are on track to get us to net zero emissions. Solar capacity is projected to double or triple in the next decade, and it is set to become one of the fastest growing and most important energy technologies. By 2050, it is estimated that 40% of generating capacity in the US will be solar. While there are constraints like grid capacity and market design that could cap yearly growth, solar remains a highly competitive and in-demand energy source.
China's Dominance in Solar Manufacturing and the Flattening of Growth
China currently dominates solar manufacturing, accounting for over 80% of the manufacturing capacity. While there are announcements of module manufacturing expansions in other countries, China's share is expected to remain dominant. However, growth rates in China and other major markets like Europe and the US are slowing due to grid capacity constraints. Land and grid capacity limitations are starting to restrict project potential. This is leading to a flattening growth rate in the solar industry, signaling the transition to a more mature phase.
Supply Chain Challenges and Future Outlook
The global solar industry has faced challenges in supply chain security, equipment shortages, and grid constraints. Efforts like the Inflation Reduction Act in the US have stimulated investment in solar manufacturing, with expectations of significant expansions in capacity. However, uncertainties remain, such as potential changes in trade restrictions and political risks that could disrupt the supply chain. Looking ahead, the solar market is projected to continue growing, with forecasted installation increases due to new legislation, although the timing may be slower than anticipated. Attention is also shifting towards technology trends like module advancements and the importance of solar plus storage.
When the numbers for 2023 are finalized, there could be another 320 to 413 gigawatts of solar installed around the world – bringing global capacity to nearly 1.5 terawatts.
Solar is now on track to surpass coal and fossil gas capacity in the next few years, bringing generation to 10% of global electricity supply.
There's universal recognition that we're firmly in the solar era. But outlooks on how fast the technology will grow are mixed. And that's because a mix of constraints – market design, trade barriers, and grid capacity – could cap yearly growth.
This week on The Carbon Copy, we talk with Wood Mackenzie's Michelle Davis about the tech and deployment trends that will shape the next decade of solar PV expansion.
Sign up for Latitude Media’s Frontier Forum on January 31, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024.
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