Solar Energy’s Lowering Costs Boon to Renewable Power Growth  

The plummeting cost of solar panels, thanks to China’s mass production, has made them cheaper, leading to the speedy growth of solar energy capacity worldwide. In 2023, solar energy constituted 6% of the world’s electricity, perhaps a tiny percentage, but it is set to expand and become the single source of electricity by the mid-2030s, according to The Economist projections (Sun Machines, 2024).

China’s bullish investments in polysilicon or polycrystalline silicon manufacturing plants and strong government support have given it an edge. They are now making 93% of the world’s polysilicon, a high-purity form of silicon, which is a primary material for solar cells.

According to the article, two of China’s biggest polysilicon manufacturers alone have the combined total capacity to produce 770,000 tonnes of material annually. Considering all of China’s foundries, they can make 7 million tonnes of polysilicon a year, equivalent to producing 3.5 trillion watts of solar panels annually (Sun Machines, 2024).

The IEA 2023 Renewables Report saw a step change in renewable capacity additions, driven by China’s solar PV market. “Global annual renewable capacity additions increased by almost 50% to nearly 510 gigawatts (GW) in 2023, the fastest growth rate in the past two decades. This is the 22nd year in a row that renewable capacity additions set a new record”(Renewables 2023, 2024).

Still according to the report, “while the increases in renewable capacity in Europe, the United States and Brazil hit all-time highs, China’s acceleration was extraordinary. In 2023, China commissioned as much solar PV as the world did in 2022, while its wind additions also grew by 66% year-on-year. Globally, solar PV alone accounted for three-quarters of renewable capacity additions worldwide” (Renewables 2023, 2024).

The report says that achieving the COP28 target of tripling global renewable capacity based on 2022 levels by 2030 will mean installing more than 11,000 gigawatts of renewable energy in line with IEA’s Net Zero Emissions by 2050 (NZE) Scenario. However, under existing policies, global renewable capacity will only reach 7300 GW by 2028 and must increase by 2.5 times by 2030.

Achieving the target will mean policy changes, including increasing investment in grid infrastructure to accelerate the expansion of renewable energy, cutting the red tape and permission procedures, and helping finance developing economies.

In the meantime, the supply glut China is creating with solar panels has already created an environment of low panel prices and led to a stockpiling of imported Chinese modules in Europe and the US, according to S&P Global.

In 2023, the IEA report said that 96% of newly installed utility-scale solar PV and onshore wind capacity will have lower generation costs than new coal and natural gas plants.

Projections of Renewable Energy Milestones in the next five years:

The report is highly optimistic regarding the global adoption of renewable energy over the next five years (Renewables 2023, 2024).

• In 2024, wind and solar PV together generate more electricity than hydropower.
• In 2025, renewables will surpass coal to become the largest source of electricity generation.
• Wind and solar PV each surpass nuclear electricity generation in 2025 and 2026, respectively.
• In 2028, renewable energy sources account for over 42% of global electricity generation, with the share of wind and solar PV doubling to 25%

Where solar PVs are making a difference

In Africa, where around 600 million, 43% of its total population lack access to electricity, one can lift many of them from poverty and even raise their GDP by two points.

The rampant “load-shedding” due to the erratic supply of electricity is one of the reasons their economy has shrunk. But as these national blackouts peaked, the cost of solar panels and storage batteries plummeted, driving South Africa’s private firms to shift to renewable energy.

The Economist reported that 65% of new solar capacity in the last two years has been from the large African companies buying them directly from developers. The article calls this a “decentralised revolution” that could benefit the continent’s economy (Private firms, 2024).

Start-ups providing “distributed renewable energy” (DRE) in Africa are also growing and responsible for delivering power to 400 million Africans who get their electricity from solar home systems. DRE companies in Kenya and Nigeria also create many jobs, sometimes more than those in the oil and gas industry (Private firms, 2024).