The International Energy Agency historically provides conservative estimates on projections for renewable energy. The agency has embraced the need for more clean electricity and fuels to address climate change and peak oil, but its outlook for the future is usually far more conservative than reality. When the IEA says we could get up to one third of our global energy supply from solar photovoltaics and solar hot water by 2060; that is significant especially if this is a conservative approximation.
“The strength of solar is the incredible variety and flexibility of applications, from small scale to big scale,” Paolo Frankl, the IEA’s head of renewable energy told Bloomberg News. Economic activity will shift toward equatorial regions by 2050, making solar energy a viable power source for most of the global economy, the report said. Those regions will be home to almost 80 percent of the human race by the middle of the century, compared with about 70 percent today, and their energy needs will be higher as living standards in countries such as Brazil and India approach those of the U.S. and Europe.
The IEA has released a new publication, Solar Energy Perspectives, which mirrors one of its flagship research products, Energy Technology Perspectives. However, in its recent World Energy Outlook, IEA hardly gave solar attention. The organization predicted fairly modest growth in the solar PV and Solar hot water sector through 2035, with a projection that it would only make up 4.5% of electricity supply.
While solar only makes up a fraction of the global electricity supply today, the reduced cost of the technology is pushing it toward a breaking point. By sometime in 2012, the installed cost of a crystalline-silicon solar PV system over 1 Megawatt in the U.S. could dip to around $2.50 a watt. At around $2 a watt we could cost-competitively meet around 30% of global electricity supply, says solar expert and Carbon War Room CEO Jigar Shah. Shah believes solar can reach a 5% dispersion level in the U.S. by 2020, with cost reductions coming mostly from innovations in hardware and installation, not dramatic improvements in the lab.
The IEA seems to agree that a “systems-based approach” to manufacturing and installation will be the key driver to reaching high penetration levels of different solar technologies. And rather than focus on specific subsidies for solar in the long-term, the most important incentive will be a price on carbon says the IEA. Averaging 65 percent compound annual growth rate for the past 5 years, solar is growing rapidly. Seventeen nuclear power plants worth of solar peak power shipped in 2010.