Solar PV is already the lowest cost source of energy in many markets, and by 2030 will be the benchmark low-cost technology across many more markets. These projects do not even rely on major technology breakthroughs – of which, as we outline below, there are several in the offing. While solar PV will expand its present market share by a factor of at least seven in the coming decade, its long-term potential in the global energy mix is far higher still.
Solar PV is currently the fastest growing renewable energy sector and strong growth is expected toward 2030 and beyond. In 2017, Solar PV provided about 2% of the world’s electricity – only a tenth of that provided by hydropower. By 2030, solar is expected to have caught up with hydro – with both sources providing almost 15% each of the total electricity produced1.
The cost of solar PV has fallen by some 90% over the last 10 years, and we expect further reductions with the utility-scale system price approaching $0.45/W(DC) toward 2030 across many markets. This is below the cost of any other generation source, so in effect all other electricity generation technologies will need to compete with solar PV. Solar is already cost leader in many markets today, and the continuous improvement in technology and economies of scale will be the price benchmark in many more markets in the coming decade.
Remarkably, most of the breakthrough developments in solar PV have come from one technology - crystalline silicon solar PV, which now dominates the market. Despite advances in thin film technologies including cadmium telluride (CdTe) and copper indium gallium selenide (CIGS) thin films have captured less than 5% of the market combined, due to the major investments and improvements in cost and efficiency for the crystalline silicon supply chain and manufacturing facilities.
On a global level, utility-scale installations will account for almost 50% of global solar capacity in 2030. Other grid-connected categories will make up roughly a further 31% - i.e. commercial & industrial plus grid-connected residential2. Microgrid installations will have a smaller share, while off-grid installations, a category for developing countries like India and the Sub-Saharan African continent will amount to around 2% of installed capacity. However, that 2% will be invaluable to these communities in providing hundreds of millions of people with access to clean and resilient electricity they currently lack3.
Solar + storage plants will continue to find traction in dynamic energy markets and those with a high fraction of solar generation, which is already the case in several US markets. Storage across these and more markets will enable developers and owners to maximize the value of solar assets and ensure dispatchable energy can be delivered when and where it is needed. Solar + storage will bring back-up power to customers from residential to hospitals, schools, and businesses, especially relevant with the increased intensity of weather observed today and into the future.
There is further room for improvement of crystalline silicon PV panels. Silicon PV has a market share of nearly 95%, and will continue to dominate the market through the coming decade. Improvements in the efficiency and reliability of Passivated Emitter and Rear Cell (PERC) technologies will be the main focus in the next few years, with technologies such as TOP-Con and Heterojunction Si becoming more competitive due to their higher efficiency and in some cases, lower temperature coefficients most relevant in hot climates. Silicon module efficiency will begin to approach 25% across much of the industry by 2030. Given the continued rapid improvements in Si PV module performance, rival technologies will experience difficulties gaining market share without substantial changes to their cost structure or CAPEX for manufacturing.
The Energy yield of solar assets will continue to increase. Bifacial modules will continue to increase in market share as the industry extracts more energy out of modules, with the ITRPV roadmap showing a more than 60% bifacial market share by 2030. Dual glass modules may allow for extended useful life, and single axis trackers and advanced control algorithms will act to increase the energy yield of these systems. Smart inverters and larger string inverters for grid integration and dynamic control will reduce integration costs. Finally, digital tools will enable higher performance systems and lower O&M costs.
Developing technologies such as perovskite solar cells could bring a step change in the solar PV cost trajectory. Thin film perovskite solar panels could offer higher throughput and lower cost manufacturing and have so far shown great promise in converting sunlight to electricity, at least in smaller-scale laboratory tests. Perovskites have demonstrated efficiencies above 24% for lab cells, already higher than that of CdTe and CIGS with steady improvements in stability. However, further improvements must be made on perovskite reliability to be truly competitive with Si and existing thin film technologies, given that these products are themselves steadily improving. Further, cost-effective, large-scale manufacturing needs to be demonstrated, bringing the performance up from the 16% observed for prototype mini-modules4.
Tandem photovoltaics are targeted as an opportunity to push module efficiency toward 30%, thereby further enhancing energy yield and driving down balance of system costs, from racking to installation. Perovskite tandems have been demonstrated and may offer a path toward low cost, high efficiency modules; however perovskite on silicon tandem cells and modules could enable upgrading the efficiency of existing and future silicon technologies and leverage the existing infrastructure and supply chain, helping to bring perovskites mainstream on the back of the silicon PV industry.
With new technologies come risks associated with new and unforeseen degradation mechanisms, which makes it difficult to prove that these technologies are bankable and can perform as expected over the course of the three-plus decade finance horizon for PV systems. Technologies will continue to evolve, driving systems toward higher yield, and market solutions will emerge to account for such risks and contractually mitigate them – as has been the case in markets well outside of the solar and renewable energy industries. Improvement in product testing and data analytics that evaluate the performance of systems employing new technologies will help mitigate these risks. Advanced data analytics will help to close the loop between modeling new technologies and maximizing the performance of these systems as they are deployed in the field.
The opportunities across the coming decade will continue to demonstrate the versatility of solar technologies, development, operation, and financing mechanisms; capitalizing on the inherent scalability of photovoltaic modules to bring dispatchable, resilient energy to markets big and small.