During the 2017–2025 forecast period, the global Solar Power capacity is expected to increase from 387GW to 969GW as per GlobalData’s recent report ‘Solar Photovoltaic (PV) Market, Update 2017’.
The noteworthy development of the worldwide solar power industry as of late has made another standard foundation speculation class – expansive scale, stable, income delivering sun oriented power stations that produce outflows free power on the back of mechanical advancements driving cost intensity.
Increase In Demand
In 2016, the total worldwide solar PV capacity addition was 76.3GW, an increase of 50% compared to 2015. Asia-Pacific dominated the PV market with annual installation of 52,380MW followed by North America and Europe with installations of 15,055MW and 7,119MW respectively. From 2013, Asia-Pacific led in annual PV installations and in 2016 the region surpassed Europe to emerge as the largest PV market in terms of cumulative installed capacity. Asia-Pacific contributed 42.6% of the total global electricity generated from solar PV, followed by Europe with 34% and North America with 20.4%.
Solar energy has a major part to play in lessening future carbon outflows and guaranteeing a maintainable energy future. It can be utilized for warming, cooling, lighting, electrical power, transportation and even natural tidy up. The worldwide normal solar radiation, per m2 and every year, can deliver an indistinguishable measure of energy from a barrel of oil, 200 kg of coal, or 140 m3 of petroleum gas.
The two fundamental sorts of solar energy technologies are photovoltaic and thermal collectors. Photovoltaic collectors change over solar radiation specifically into electricity, without the utilisation of any heat motor, and are progressively mainstream in building mix purposes, (for example, utilising photovoltaic tiles as rooftop shingles) and additionally for little and expansive scale gadgets, from watches to satellites. Solar thermal collectors can be utilised for residential heating and boiling water, however vast solar collection plants can likewise be utilised for industrial heat purposes or for electricity generation based on the same mechanisms as fossil fuels. It is likewise conceivable to use solar energy for desalination, distillation and detoxification of water supplies, an increasingly important use.
When photons hit a solar cell, they knock electrons loose from their atoms. If conductors are attached to the positive and negative sides of a cell, it forms an electrical circuit. When electrons flow through such a circuit, they generate electricity. Multiple cells make up a solar panel, and multiple panels (modules) can be wired together to form a solar array. The more panels you can deploy, the more energy you can expect to generate.
Investing In Solar Assets
Similar to other renewables, solar investments are typically backed by real assets. These offer predictable, long-term, inflation-linked revenues supported by power purchase agreements. A large scale PV or onshore wind project will usually have an economic life of 20 years and a productive life of 25-35 years, with potential for repowering. Current investors include pension funds who are looking for different asset classes which can provide stable and reliable returns, companies looking at going 100% renewable and individual consumers interested in switching to green sources and installing own home systems.
Reasons to invest in solar can be categorised into the following: operational, scalability and financial:
- Solar investments have a number of unique operational characteristics, resulting in both risk and cost benefits for investors:
- Lower resource risk, since the predictability of solar irradiation is typically higher than wind speeds or rainfall. This allows for more confident output forecasts.
- Lower technology risk, since most solar systems are electronic not mechanical, with few moving parts and limited reliance on component inputs.
- Correspondingly lower operating and maintenance costs, often bolstered by comparatively easy access to solar installations.
- Shorter construction lead times, given that many solar installations can be deployed in months compared to years for comparable scale wind projects.
The unique scalability of solar is another attractive investment feature, both in terms of the asset itself, but also the potential levels of investment and profit. Solar assets can be sited on ground or rooftop, at utility, commercial or residential scale. That means they can be located near to where energy is required, reducing the costs of transmission and distribution infrastructure maintenance. Planning restrictions are often less onerous than for other renewables, since solar installations are often added to existing infrastructure. These factors create a wide range of “off-grid” investment opportunities, such as the commercial use of solar to power factories, offices or datacenters. Solar has significant scope for technological improvements. This is in addition to the further reductions in PV module costs already predicted by analysts.
- Continuing investment in R&D by PV manufacturers will result in enhancements to the efficiency, durability and flexibility of PV technology.
- The natural variability of solar output is stimulating the development of ‘smart’ infrastructure such as microgrids and intelligent energy management systems. Innovations like these are creating new investment opportunities. A recent EY paper suggested that microgrids could allow commercial users in twenty countries to achieve total annual energy savings of US$64b-US$171b by 2020.5
- Developments in battery technology, and lithium ion (LI) batteries in particular, could give an additional boost to solar PV capacity growth. Technology companies’ investments in R&D and large-scale manufacturing is widely expected to drive LI costs down a PV-like curve over the next five years.