Solar power has been declared a winner before, only to flounder. It’s easy to remain skeptical today, given that solar power accounts for less than one percent of the global energy supply. But it is also expanding faster than any other power source, with an average growth rate of 50 percent a year for the past six years. Annual installations of photovoltaic panels increased from a capacity of less than 0.3 gigawatts in 2000 to 45 gigawatts in 2014—enough to power more than 7.4 million American homes. This time really is different: solar power is ready to compete on its own terms.
The momentum behind solar power is a result of innovations in regulation, industry, technology, and financing. In a number of markets, it no longer needs public subsidies to compete on price with conventional power sources, such as coal, natural gas, and nuclear power. The International Energy Agency, which has historically taken a conservative approach to evaluating solar power’s prospects, has projected that by 2050, in the best-case scenario, solar energy could be the single biggest source of power, generating as much as 27 percent of electricity worldwide.
If that happens, the consequences will be profound. Electricity will reach places that have never known what it means to get light or heat on demand. The price of electricity could fall, and utilities will have to figure out how to adapt. But the environmental gains, in terms of lower emissions of particulates, sulphur, and greenhouse gases, would be profound.
THE POWER OF POLICY
Four factors lie behind the rise of solar power. The first is regulatory support. Around the world, governments have enacted a range of pro-solar policies, including requirements that utilities generate a given fraction of their electricity from solar power, feed-in tariffs (a guaranteed price per kilowatt of solar power), and subsidies to manufacturers of solar panels and the households that buy them. Policymakers have supported solar power for a number of reasons, including a desire to reduce emissions, diversify their countries’ energy supplies,