The solar energy market set for spectacular growth over the next five years globally, says IEA report
Cost reductions and concerted government policy efforts are fuelling growth in the renewable energy sector
The landscape of electricity generation using solar energy is set to change, with a significant increase in the installation of solar PV systems in homes, commercial buildings and industrial facilities over the next five years, predicts a report from the International Energy Agency (IEA).
If these predictions turn out to be true, the world’s total renewable-based power capacity will grow by 50 percent between 2019 and 2024. "This increase of 1,200 gigawatts – equivalent to the current total power capacity of the United States – is driven by cost reductions and concerted government policy efforts. Solar PV accounts for 60 percent of the rise. The share of renewables in global power generation is set to rise from 26% today to 30% in 2024," reads IEA’s Renewables 2019 market report.
While the major focus of the report has been on solar photovoltaic (PV) cells that convert solar energy into electricity, the report also sheds light on the future of other forms of renewable energy such as renewable heat -- wherein renewables such as modern biomass, solar thermal and geothermal are used to generate heat instead of fossil fuels -- and biofuels.
“Renewables are already the world's second largest source of electricity, but their deployment still needs to be accelerated if we are to achieve long-term climate, air quality and energy access goals,” said Fatih Birol, IEA’s executive director.
Fuelling the renewable energy sector are cost reductions and concerted government policy efforts, read the report. “As costs continue to fall, we have a growing incentive to ramp up the deployment of solar PV,” said Birol. The costs are already below retail electricity prices in most countries and the IEA forecasts that this will drop further by 15 to 35 percent by 2024.
The use of solar PVs, they say, will play out differently in commercial sectors and domestic households. Though they expect that industries will majorly contribute to the solar PV growth, accounting for three-quarters of new installations over the next five years, they estimate that the number of solar rooftop systems in homes is set to more than double, to some 100 million by 2024.
As for other forms of renewable energy, renewable heat and biofuels are expected to grow. But they expect setbacks. Renewable heat is expected to expand by one-fifth between 2019 and 2024, with China, European Union, India and the United States taking the lead. But they maintain that potential of renewable heat will most likely be vastly underexploited.
Of all forms of renewable energy used in transportation, about 90 percent comes from biofuels. They predict that its use in transport will increase by 25 percent over the next five years. There is scope for improvement here as well, according to the report: currently the share of renewables in total transport fuel demand still remains below 5 percent but they expect that the share of renewables in transport to grow by an additional 20 percent through 2024, provided that high quota levels and enhanced policy will open new markets in aviation and marine transport.
However, there are challenges. The report highlights three major problems that the renewable energy sector is likely to encounter: policy and regulatory uncertainty, high investment risks and system integration of wind and solar PV.
Commenting on the report, Briol said, “Distributed PV’s [for commercial and domestic uses] potential is breathtaking, but its development needs to be well managed to balance the different interests of PV system owners, other consumers and energy and distribution companies. The IEA is ready to advise governments on what is needed to take full advantage of this rapidly emerging technology without jeopardising electricity security.”