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  • Writer's pictureRealFacts Editorial Team

The Bright Future of Solar Power


solar power

Historical Context and Current State 


Seventy years ago, AT&T’s Bell Labs unveiled a revolutionary technology for converting sunlight into power, initially hoping to replace batteries in remote areas. Today, solar power has evolved far beyond its early conceptual stage. It now covers an area roughly half that of Wales and will provide about 6% of the world's electricity in 2024. Despite this impressive growth, solar power's potential remains largely untapped, with projections indicating it will be the dominant source of electrical power by the mid-2030s and potentially the largest source of all energy by the 2040s. 


diagram of energy consumption

The growth of solar power has been exponential, with installed capacity doubling approximately every three years and increasing ten-fold each decade. This unprecedented and sustained growth is driven by the fundamental economics of manufacturing: as cumulative production increases, costs decrease, leading to higher demand, which further boosts production and reduces costs. Unlike previous energy transitions (wood to coal, coal to oil, oil to gas), solar power does not face significant resource constraints. The primary materials required—silicon-rich sand, sunlight, and human ingenuity—are abundant. 


The Rising Potential of Solar 


Solar power's cost trajectory continues to fall, making it cheaper than many traditional energy sources. On current trends, the cost of solar electricity is projected to be less than half of the cheapest available today by the 2040s. This dramatic reduction in costs is expected to drive global demand, transforming energy landscapes, especially in regions with poor access to electricity, such as Africa, where 600 million people currently lack reliable power. 


Despite its potential, solar power must be supplemented with storage solutions and other technologies due to its intermittent nature. Innovations in battery storage and electrolysis fuels are gradually addressing these issues, making heavy industry, aviation, and freight more adaptable to solar power. Moreover, while China currently dominates the solar manufacturing industry, producing the majority of the world's solar panels, this concentration poses geopolitical risks. The U.S. has responded with tariffs on Chinese solar equipment, but future demand offers opportunities for diversification in the global market. 


Investment in solar energy has surged, with solar panel installations being the largest single category of investment in electricity generation. The International Energy Agency (IEA) expects $500 billion to be invested in solar power this year, nearly matching upstream oil and gas investments. Solar capacity is projected to surpass all other forms of power generation, including nuclear, wind, hydro, gas, and coal, within the next decade. 


Impact in Africa and Chinese Dominance 


Africa, a continent plagued by energy poverty, is increasingly turning to solar power. South Africa has seen significant growth in solar capacity, partly driven by the unreliability of its coal-fired power stations. Decentralized renewable energy (DRE) systems, particularly solar, are expanding rapidly, providing electricity to millions of Africans who previously relied on diesel generators. The World Bank and the African Development Bank have launched initiatives to connect 300 million more people to electricity by 2030, with a significant portion through off-grid solar systems. 


China's solar industry leads globally, from polysilicon production to finished solar modules. This dominance has driven down the costs of solar energy but has also created overcapacity, squeezing profits and leading to financial strain within the industry. Despite this, Chinese manufacturers continue to expand, supported by state incentives and local government aid. However, the future may see consolidation as demand catches up with supply and external pressures, such as tariffs and subsidies from other countries, reshape the global market.


The Future of Solar Power 


Solar power is on a trajectory to become the world's primary energy source, driven by falling costs and increasing demand. This transformation promises to deliver cheaper, cleaner energy, with profound economic and social benefits, particularly in under-electrified regions. However, the industry faces challenges, including the need for complementary technologies, geopolitical risks, and market overcapacity. Investors should be mindful of these dynamics while recognizing the significant growth potential in the solar sector.

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