Solar Energy: The Light at the End of the Tunnel?

Solar power captures incoming solar radiation through solar panels and converts it into electricity. There are different ways of harnessing solar energy for various uses including:

• Photovoltaic (PV) systems and cells – using direct sunlight to produce electricity
• Concentrated solar power – uses mirrors or lenses to concentrate large areas of sunlight or solar thermal energy onto smaller areas
• Solar thermal energy – heating water directly with solar energy

Fortunately for us, solar power should be accessible for as long as the sun exists, which is estimated to be for 4-5 billion years (Nelson, 2014). The most popular types of solar energy are photovoltaic systems and concentrated solar power, both have experienced near exponential growth, as the following PV graph shows (Solar Central, 2015):

This increase in supply, meant that demand for Solar PV energy finally stopped exceeding supply, and prices fell (shown below), although it is still the most expensive energy source:

However, this in turn led to a fall in the market value of solar energy (Clean Edge, 2013). Nonetheless, between 2000 and 2010, the global market value of Solar PV has increased more than 35-fold from $2.5billion to $79.7 billion. Solar energy tends to be most popular in developed countries as this IHS pie chart shows, with Germany, UK, USA, Japan and China taking the lead in PV installations:

However, it is important to also notice China’s astonishing market share of Solar PV energy. In the past, solar energy has been pegged as one of the most expensive energy sources. However, now that supply is meeting demand, and R&D is being increasingly invested in to make solar power as energy efficient as possible, it is becoming more affordable. Solar energy has become affordable to the extent that the Indian government is looking to implement it at both small and large scales. The World Bank estimates the SME opportunity in India to be worth $41 billion (particularly in the latter segments of the value chain e.g. planning and installation). This is further evidence that even developing countries, which haven’t developed to the same extent we have, can still have the same opportunity to industrialise, without making the same mistakes we did.