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During the post pandemic recovery, the necessity of a reliable, inexpensive, and secure power supply that can boost economic activity is the need of the hour. Solar energy and other technologies such as wind power can help a country move to a clean energy economy.
As per the World Energy outlook report 2020 by the International Energy Agency (IEA), the power industry will play a critical role in assisting economic recovery and play a growing role in delivering the energy that the world requires in the long run. The world is moving towards a system of lesser and lesser carbon dioxide emissions. As per the International Energy Agency (IEA), hydro, wind, solar PV, biofuel, geothermal, concentrating solar, and marine power will account for roughly 40% of total electricity generation by 2030. With a ramped-up focus to increase renewable energy generation by 2030, China is projected to be the leader in electricity production.
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Market Outlook
Solar photovoltaic (PV) has risen to the top of the electricity supply chain and appears to be on the path of tremendous growth. The IEA’s 2020 World Energy Outlook Report states that between 2020 and 2030, solar PV will rise at a rate of 13% per year, supplying nearly one-third of the increase in electricity consumption. As per the report, due to widely available resources, dropping costs, and policy backing in over 130 countries, global solar PV deployment will approach pre-crisis levels in 2021 and set new records each year after 2022.
According to the Solar Energy Industries Association (SEIA) and Wood Mackenzie's U.S. Solar Market Insight Q2 2021 study released on June 15th, the solar market in the United States has surpassed 100 gigawatts (GWdc) of installed electric generating capacity and has doubled the size of the industry. According to Wood Mackenzie forecasts, the solar Investment Tax Credit (ITC) will continue to be extremely important and will drive record growth and investment over the next three years. As per forecasts, by 2026, total installed photovoltaic solar capacity will rise to more than 250 GW. Solar energy demand continues to rise, but attention is increasingly focused on supply chain bottlenecks, which have worsened since the second half of 2020.
The pandemic will not pose a significant risk to utility-scale solar in the medium term. Still, it may have a short-term negative impact as firms and consumers will not necessarily invest in solar if they are experiencing a protracted economic slowdown. The economic stimulus package will play a critical role in strengthening national economies, ensuring a healthy business environment, and directly providing financial incentives for solar investments, as some nations and regions have already declared.
As per the medium scenario of SolarPower Europe’s annual Global Market Outlook (GMO) for Solar Power (2020) it is predicted that Chinese solar demand will be around 39.3 GW in 2020, 49 GW in 2021, 57.5 GW in 2022, 64 GW in 2023, and 71 GW in 2024- this is in line with the China Photovoltaic Industry Association's (CPIA) forecast, but slightly higher.
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Following COVID, solar is likely to increase rapidly in India in the following years, as the government works hard to fulfil its 100 GW objective by 2022. However, as per the aforementioned GMO report, the target achievement seems to be a utopian vision because just 4 GW of the 40 GW rooftop systems have been built so far. There are also several administrative, financial, and logistical hurdles in the way of large-scale solar. Yet, by 2021, at least 15 GW is expected to be installed yearly.
Europe is predicted to resume its economic trajectory in 2021. To succeed, the European Commission's Green Deal, which calls for carbon neutrality by 2050 and a more aggressive CO2 reduction target of 50-55 per cent by 2030 (instead of the current target of 40 percent by 2030), will need to rely on low-cost and adaptable solar. Because the Green Deal is a vital component of the EU's COVID-19 economic stimulus plan, solar is projected to benefit.
As per GMO (2020), in Japan, the government has done little to change the general downward trend in new solar installations - the reorganisation of the energy sector has taken far too long, and solar systems remain prohibitively expensive. However, a total of US$2.7 billion has been set aside for a scheme that would include 11 solar farms and 10 wind farms, with a completion date of 2024. The Fukushima government claims that by 2030, this new hub will generate up to 14% of Japan's electricity. Renewable energy advocates believe Fukushima isn't just a spectacular comeback in the making— it's the blueprint for the future.
Bottomline
Globally many economies are seeing an optimistic outlook towards the transition to solar energy. However, there remain few countries like Italy, Mexico, Turkey etc., which must catch up pace.
