Solar industry poised for recovery as report predicts 30% growth by year end

New solar installations around the world are poised to grow by a “staggering” 30 percent this year, and the industry can look ahead to double-digit growth each year through 2025, a report by Bloomberg New Energy Finance (BNEF) has shown.

The solar industry hit some obstacles in the first half of 2022, as deployment slowed due to module supply issues. The technology ranked third in the first six months of the year, installing 4.2 GW, trailing natural gas (4.3 GW) and wind (5.2 GW), according to the Energy Information Administration (EIA).

“At the end of the day, the global solar picture is just staggering at this point,” Bloomberg senior clean energy analyst Rob Barnett said in a report. “We are on track to install something like 250 gigawatts (GW) of solar capacity this year. I know most folks don’t think in gigawatts, but that is a very large amount. It’s more than the installed capacity of a number of European countries.”

The report cites massive growth in many parts of the world.

“China, already the world leader in solar capacity, plans to double its new deployment this year. Germany broke its solar generation record in the midst of a searing heatwave July 17, and solar plus wind generation covered 28percent of U.S. electricity demand in April, an all-time high,” BNEF said

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Barnett maintained the boom is just beginning. “There really is this big, top-line growth scenario that we see unfolding for all of the companies that are participating in the solar supply chain,” he said.

And while the cascade of extreme weather events around the world is increasing concern about climate change, the big push is coming from high oil and gas prices driven by Russia’s invasion of Ukraine, coupled with plummeting solar costs.

“I do think there is increasing focus on all sorts of solutions to try to help manage emissions and tackle the concerns of climate change,” Barnett said. “But I would actually argue that the bigger driver for clean energy demand, particularly here in Europe, is elevated energy costs.”

Though solar is still an intermittent power source without some form of storage, and fossil energy costs are beginning to come down, “the economics [of renewables] are already quite good,” he added. “And so you’d have to see such a sea change in terms of gas prices or coal prices, if you’re thinking about the power grid, to really reverse some of the trends. And I just don’t think there’s any appetite for it, either.”

The report noted that the United States is now on a path for record solar deployment, as the EIA expects the technology to reach 17.8 GW of additions to the grid by year’s end.

These “high probability additions” would exceed year’s end totals for natural gas (9.2 GW) and wind (11.2 GW). Energy storage notably may achieve 6.2 GW of deployment by the end of 2022, said EIA.

“Module supply shortages hampered solar deployment in the first half of 2022, but legislation and executive action should cause a strong new wave of installations in the coming months,” BNEF concluded.