A short time ago, solar power was considered a marginal power source. But it is now one of the major drivers behind the transition to greener, more sustainable sustainable energy.
Around the globe, prices are falling and India is now producing the world's cheapest solar power, according to an International Renewable Energy Agency (IRENA) survey.
The costs of building large-scale solar installations in India fell by 27% in 2018, year-on-year, thanks to a combination of low-priced panel imports from China, abundant land and cheap labour.
Average solar prices from large-scale installations in India were less than a third of Canada’s, where costs were highest of the countries surveyed.
More than half of the total costs of building a solar installation in India relate to hardware, like racking and mounting, while the remainder involves soft costs such as system design and financing.
Lower service and labour outlay have contributed to a dramatic fall in the investment needed to set up large-scale solar power-generating projects. Between 2010 and 2018, setup costs in India fell by 80%, the most precipitous decline of any country.
Back to nature
As prices come down, demand goes up. The expanding global solar sector now accounts for 55% of all new renewable power-generating capacity. Last year, 94 gigawatts of new capacity came online, largely added by Asian countries.
China was responsible for 44 gigawatts of all new solar capacity, almost five-times more than India, which followed directly behind. Other rapidly expanding markets include the US, Japan, Australia and Germany.
What's the World Economic Forum doing about the transition to clean energy?
Moving to clean energy is key to combating climate change, yet in the past five years, the energy transition has stagnated.
Energy consumption and production contribute to two-thirds of global emissions, and 81% of the global energy system is still based on fossil fuels, the same percentage as 30 years ago. Plus, improvements in the energy intensity of the global economy (the amount of energy used per unit of economic activity) are slowing. In 2018 energy intensity improved by 1.2%, the slowest rate since 2010.
Effective policies, private-sector action and public-private cooperation are needed to create a more inclusive, sustainable, affordable and secure global energy system.
Benchmarking progress is essential to a successful transition. The World Economic Forum’s Energy Transition Index, which ranks 115 economies on how well they balance energy security and access with environmental sustainability and affordability, shows that the biggest challenge facing energy transition is the lack of readiness among the world’s largest emitters, including US, China, India and Russia. The 10 countries that score the highest in terms of readiness account for only 2.6% of global annual emissions.
To future-proof the global energy system, the Forum’s Shaping the Future of Energy and Materials Platform is working on initiatives including, Systemic Efficiency, Innovation and Clean Energy and the Global Battery Alliance to encourage and enable innovative energy investments, technologies and solutions.
Additionally, the Mission Possible Platform (MPP) is working to assemble public and private partners to further the industry transition to set heavy industry and mobility sectors on the pathway towards net-zero emissions. MPP is an initiative created by the World Economic Forum and the Energy Transitions Commission.
Is your organisation interested in working with the World Economic Forum? Find out more here.
Alongside the rise of solar, other clean energy sources like wind farms and hydropower are also growing. Renewable energy now generates a third of global power capacity.
“Through its compelling business case, renewable energy has established itself as the technology of choice for new power generation capacity,” said Adnan Amin, former director general of IRENA.
“The strong growth in 2018 continues the remarkable trend of the last five years, which reflects an ongoing shift towards renewable power as the driver of global energy transformation.”
A powerful incentive
As markets shift to cleaner energy sources, non-renewables – such as fossil fuels and nuclear power – have seen a steady decline throughout Europe, North America and Oceania.
But countries in Asia and the Middle East are still heavily reliant on fossil fuels, where oil- and gas-generating capacity is on the rise.
The IRENA report sees falling renewable technology costs as key to future energy decarbonisation, noting it will ultimately be cheaper to build and operate solar and wind farms than to run existing coal-fired power plants.
Onshore wind and solar power are quickly becoming less expensive than coal and oil, which could provide a powerful incentive for fossil fuel-dependent countries to switch to more sustainable energy sources.