A new wave in solar technology – Opinion News

By Ajay Mathur & Saba Kalam

Once viewed as prohibitively expensive and technologically limited, solar energy now stands as one of the most affordable and efficient forms of energy generation worldwide. From a nascent 1.22 GW in 2000, the world’s solar capacity has surged to an impressive 1,419 GW in 2023, charting a CAGR of about 36%. This remarkable growth is primarily due to relentless advancements in solar technology, cost reductions, efficient solar cells, and investors prioritising investment in solar energy. 

New age solar technologies: We are now seeing a leap in innovative solar technologies. Quantum dot solar cells have achieved a record-breaking efficiency of 18.1%, offering a promising approach to enhance solar energy capture and power atmospheric water harvesting technologies. Researchers are creating self-healing solar panels to extend the lifespan and reduce the maintenance of existing solar cell technologies. The solar sector is now also increasingly prioritising recycling end-of-life panels and implementing circular economy practices to minimise environmental impact, with new processes recovering up to 96% of panel materials. 

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Plummeting costs: The 2024 World Solar Report, recently published by the International Solar Alliance, shows average auction prices for utility-scale solar solar photovoltaic (PV) projects have consistently decreased across all regions. Utility-scale solar PV costs averaged $40/MWh in 2024. India topped the global charts in solar PV capacity granted through auctions, securing a notable auction price of $34/MWh, reflecting a 23% decrease. Meanwhile, Europe saw a more modest decline of 11%, with an average auction price of $67/MWh for projects in 2024. 

Investors betting big on solar: Solar energy investments accounted for 58.35% of total renewable energy investments ($673 billion) in 2023. Investment in solar PV technology within the power sector is expected to surpass the $500 billion mark by 2024, outstripping the combined investment in all other generation forms. Investment in utility-scale solar has increased from $122 billion in 2015 to $199 billion in 2023. Decentralised (small-scale) solar investments have grown significantly, from $31 billion in 2015 to $187 billion in 2023.  In 2023, the energy yield from each dollar invested in wind and solar PV was 2.5 times higher than what the same investment would have generated ten years earlier. 

Reduced benchmark cost and expanding market: The benchmark cost, representing the capacity acquired per million dollars, is a critical indicator of market efficiency and competitiveness. An analysis of over 600 transactions since 2015 shows that the benchmark cost per megawatt has significantly decreased, a 50% reduction during the 2015-2022 period from $2.01/MW in 2015 to $1.14/MW in 2023.

As of 2023, China dominates the solar PV market, with 43% (609 GW) of the cumulative capacity of solar panels installed globally. The US contributes 10% (137.73 GW) to the global cumulative PV market, indicating the country’s significant scale of solar adoption. Japan, Germany, and India each captured a 5-6% share, reflecting their commitment to integrating solar power within their respective energy mixes. Emerging solar markets like Brazil, Australia, Italy, and Spain each contributed about 2%, showcasing the diverse global interest in solar investment. Solar PV manufacturing has nearly doubled in capacity for wafers, cells, and modules in 2023. China maintained the highest share in component manufacturing in 2023, with 97% in wafers, 89% in cells, and 83% in module installation capacity. 

Surge impacting social well-being: The sector is critical in job creation, promoting gender equality, and fostering economic and social equity, especially with its decentralised solar solutions. Employment in the solar PV sector rose to 7.1 million jobs in 2023, up from 4.9 million in 2022 worldwide, indicating a significant increase from the previous year and underscoring the sector’s role in job creation and economic development. Solar-powered irrigation systems are transforming agriculture. The global solar pump market is expected to grow at a CAGR of 5.8% from 2021 to 2027, driven by declining costs of solar PV technology, cost competitiveness of solar-powered pumps, especially when compared to diesel-powered water pumping, and increased awareness among farmers. One of the key factors driving the adoption of solar systems has been the introduction of pay-as-you-go business models, allowing users to pay for their systems in small, regular instalments.

Technological advancements have made solar energy more affordable, while new applications are further driving adoption. The key challenge remains to enable solar power in all countries—not just the OECD countries and China, and to some extent in India and Brazil. We must promote technology and finance transfer, especially to the least developed and small island developing countries, to ensure no one is left behind.

This article summarises the recently published World Solar Report 2024 on Technology, Market, and Finance by the International Solar Alliance (ISA), launched at ISA’s seventh Assembly Meeting of Member Countries on November 5, 2024.

The authors are respectively director-general and programme specialist, International Solar Association.

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