Solar power might become the world’s largest source of electricity by 2050 as falling costs boost installations, according to the International Energy Agency.
Photovoltaic plants may provide as much as 16% of global electricity, and concentrating solar facilities could generate another 11%, the IEA said in an e-mailed statement today. The Paris-based organization details what is required to reach these figures in two scenarios it sets out to reach the goal.
“The rapid cost decrease of photovoltaic modules and systems in the last few years has opened new perspectives for using solar energy as a major source of electricity,” executive director Maria van der Hoeven said.
The technologies are expensive to develop, so lowering the cost of capital is of primary importance to achieve this vision, she said.
The IEA is the latest organization to suggest the potential of renewable energy, particular solar, to transform the global power system. Solar power will take a bigger share of the energy market shake up the industry by 2030, with panels reaching a 6% share of electricity from 0.3 percent now, Bloomberg New Energy Finance forecasts. Solar plants and batteries will be disruptive technologies for the power system, UBS AG said last month.
Photovoltaic installations have grown much faster than the agency expected when it released its first outlook for solar in 2010, when it saw them covering 11 percent of global power by 2050. More solar capacity has been added since 2010 than in the previous four decades, the IEA said.
In the scenario with the highest clean-energy deployment, the IEA sees 4,600 gigawatts of photovoltaic capacity in 2050 from about 150 gigawatts now. That would involve annual investments more than doubling to an average of $225billion.
For concentrating solar, which involves mirrors that heat steam to generate electricity, the agency reiterated its vision for about 1,000 gigawatts by 2050 from about 4 gigawatts now. It sees both technologies as complementary.
This explosive growth in solar installations will be driven by further price drops. The cost of electricity from photovoltaic projects will fall by an average 25 percent by 2020, 45% by 2030 and 65% by 2050, the IEA said. This implies a levelized cost of power of as little as $56 a megawatt-hour for large plants and $78 on rooftops.
Appropriate regulatory frameworks with well-designed electricity markets will be critical to achieve this potential, according to the adviser to 29 nations.