A new report from the International Energy Agency (IEA) foresees a surge in the uptake of solar energy in the coming decades on the back of rapidly declining costs, making it the single largest source of energy by mid-century.
IEA's Technology Roadmap: Solar PV 2014 says the cost of all solar technologies will plunge in the coming decades, projecting that solar photovoltaic and utility-scale solar rates plunging to as low as $US0.04 per kilowatt hour, while solar thermal with storage drops to $US0.064 per kilowatt hour, based on capital costs of eight per cent.
Declines in solar PV costs have already dramatically outpaced the IEA's previous projections, and are roughly five years ahead of schedule.
While the IEA considers its figures to be aspirational targets as opposed to projections, should they prove to be accurate, solar PV's share of global electricity generation should hit 16 per cent by 2050. That would be a sizeable increase compared to the 11 per cent in the last solar roadmap which was released four years ago.
Under the 16 per cent scenario, the world will need 4,600 gigawatts of installed solar photovoltaic capacity by mid-century, and a near quadrupling of current the installation rate to 124 gigawatts per year. Over half of this PV capacity will be situated in the emerging giants of China and India, while its cumulative impact will be to reduce CO2 emissions by four gigatonnes per annum.
While intermittence will remain problematic for solar power usage, the IEA considers it a dilemma that can be solved by means of interconnections, demand-side responses, storage advances and flexible generation.
For advocates and supporters of solar energy, these figures serve as a significant cause for optimism, particularly given the IEA's traditional reputation for conservatism and its long-standing track record of underestimating the pace of technological advances in the energy sector.
According to IEA executive director Maria van der Hoeven, the key to achieving rapid reductions in solar prices is sound management of capital costs, which have a critical impact on overall costs.
Van der Hoeven said this will require more clear and consistent policy from regulators in order to boost investor confidence and reduce perceived risk.
"Where there is a record of policy incoherence, confusing signals or stop-and-go policy cycles, investors end up paying more for their investment, consumers pay more for their energy, and some projects that are needed simply will not go ahead," she said.
With respect to the composition of solar power by mid-century, rooftop installations are expected by the authors of the roadmap to comprise around half of all photovoltaic facilities around the world, on account of its unrivalled advantages as a distributed energy source.
"At the utility level, solar PV has many competitors," said IEA solar expert Paulo Frankl. "At the distributed level, solar PV has a competitive advantage and is unbeatable."