Solar accounted for more than 3% of global electricity generation in 2021, according to the International Energy Agency (IEA). Annual capacity addition reached 150 GW, making 2021 another record year. PV panel prices have fallen by 80% over the past decade thanks to economies of scale and continuous innovation throughout the supply chain, which is expected to have a significant impact on utility-scale solar power by 2030. The IEA expects annual growth to more than quadruple to 650 GW by 2030.
The report predicts that, by 2020, annual solar and wind power installations in the United States will increase two and a half times from today’s levels, thanks in part to the Inflation Reduction Act (IRA). New targets are also driving the massive build-up of clean energy in China, with that country’s coal and oil consumption peaking before the end of this decade. Accelerated renewable energy deployment and efficiency improvements in Europe mean that EU demand for gas and oil will fall by 20% over the course of this decade.
The average selling price of solar panels rose by 20% from 2020 to 2021. Rising freight and commodity prices, in particular for polysilicon, led to this increase. While module prices remained at high levels in the first half of 2022, continuous innovations, further improvements in materials and energy efficiency will lead to further cost reductions.
The energy crisis triggered by Russia’s invasion of Ukraine has the potential to accelerate the transition to a more sustainable energy system, according to the International Energy Agency (IEA). Although fossil fuels will peak in this decade and decline in the long term—albeit not as rapidly as current projections suggest—more than $2 trillion will be invested every year in climate-neutral technologies by 2030 through programs like the IEA’s Intergovernmental Panel on Climate Change–International Renewable Energy Agency (IPCC–IRENA) initiative and others in Japan, South Korea, and China. This corresponds to an increase of more than 50% compared to today. However, that would still fall short of 1.5-degree target, which would require a $4 trillion investment by 2030.
“The energy markets and energy policies have been changed by Russia’s invasion of Ukraine, and not just temporarily, but for the coming decades,” said Fatih Birol, director-general of the IEA. “Even with today’s political framework, the energy world is changing dramatically before our eyes. Government responses around the world promise to make this an historic and definitive turning point towards a cleaner, more affordable and more secure energy system.”