Is Solar the Energy of the Future?
Yes, according to a June 2015 report from investment bank UBS. Solar energy (and home solar energy in particular) seems to be in an exciting growth stage, and the UBS report confirms this. The analysts concluded that global solar installations could represent 10% of the world’s electricity supply within a decade. The UBS analysts believe that solar will beat nuclear and coal power to become the “default” power generation technology. This report comes on the heels of two September 2014 reports by the International Energy Agency (IEA), which offer a roadmap for solar becoming the largest source of electricity by mid-century.
Stephen Lacey, Senior Editor at Greentech Media, explains in his article on the UBS report:
“…A new analysis from investment bank UBS…found that global installed solar capacity will more than triple between now and 2025, and then triple again between 2025 and 2050. By the middle of the century, UBS estimates that nearly 3,000 gigawatts of solar will be installed worldwide.”
What about Utility Companies?
While many believe that the rise in distributed generation of solar (meaning power generated at or near the source of its consumption, i.e. home solar energy) will ultimately harm utilities, the UBS analysts think the opposite, predicting that most solar installations will be completed at the utility level, making the solar business similar to the current status of the wind power business.
They also disagreed with suggestion that an increase in solar power generation will result in a mass grid defection. Despite the decreasing costs of batteries, the UBS analysts suggest that a majority of customers will be unable to leave the grid due to the concentration of solar energy production into certain times of the year and the technical limitations of batteries.
The Future of Solar Subsidies
The UBS analysts also say that solar subsidies (like the current federal solar tax credit) are also on the rise, and will peak around €70 billion (a small portion of the global €5.6 trillion annual electricity bill, according to Lacey’s article) around the year 2025. Global solar subsidies are then expected to gradually decrease to a mere €1 billion by 2050 as commercial and home solar energy becomes more competitive.
Solar Installations in the US
In promising accord with the UBS analysis, the recently released Q2 U.S. Solar Market Insight report (a collaboration between the Solar Industries Association (SEIA) and Green Tech Media (GTM) Research) shows that perhaps solar is on track to becoming the energy of the future. During Q2, the U.S. solar market grew significantly, installing 1,392 megawatts of solar to surpass 20 gigawatts.
A second highlight of the U.S. Solar Market Insight report is the prediction that the U.S. solar industry will add 18 gigawatts of commercial and home solar energy in the next 18 months, or 1 gigawatt per month for the next 18 months. This is an enormous development for the solar industry. According to Stephen Lacey: “It wasn't until 2010 that the solar industry installed more than 1 gigawatt of PV in a single year.”
If you have questions about solar energy, contact Valley Solar to speak to a local solar expert.