On the heels of COP28 in Dubai, the International Solar Alliance (ISA) on Wednesday released three reports that spell out the investment, technology and market scenario of global solar power.
The report highlights how 600,000 Kenyans have been able to get access to clean sources of lighting through off-grid solar solutions provider d.light in partnership with a micro-lender.
The reports were released during ISA’s sixth assembly in India, where they announced an increase in ISA’s Viability Gap Funding (VGF) mechanism from 10 to 35 per cent of the project cost – depending on the capacity and needs of the countries and their respective projects.
Additionally, the Government of India is considering a $25 million investment as capital contribution in the Global Solar Facility, along with another $10 million from ISA.
However, according to the Solar Investment Report, investment is concentrated in developed countries.
“Investment in the solar energy sector is growing rapidly and accounts for $308 billion (11.5 per cent) of overall energy investments, and while spending has increased, it is overwhelmingly concentrated in a few developed countries in the Asia Pacific Region, followed by Europe and North America,” the report says.
The global solar market is projected to double in 2025, from 2022. Similarly, the Solar Market report points out that while the solar market is poised for tremendous growth, the path has a lot of challenges.
The report discusses the global solar deployment scenarios for 2025, 2030, and 2050, anticipating an annual solar PV market of 493 GW in2025 – more than double the 2022 levels. The cumulative total operating PV capacity is projected to exceed 2 TW by 2025 in all scenarios, reaching ranges of 2,381 to 2,622 GW, compared to 1.1 TW in 2022.
In 2030, the total installed capacity for solar PV varies from 5.1 TW to 10.2 TW, with renewable energy’s share in electricity generation ranging from 59 per cent to 89 per cent. By 2050, total solar PV installed capacity is projected to reach 12.6 TW and potentially 63.4 TW, though most estimates fall within 17-25 TW.
Investments in renewable energy hit an all-time high
Investments in renewable energy hit an all-time high in 2022, having crossed $590 billion, with solar energy attracting the majority of investments at 52 per cent of renewables. However, investments are insufficient and must be increased significantly to accelerate clean energy transition.
Increased investment in the grid infrastructure and energy storage is required to promote solar technology while increasing its reliability.
Emerging and developing countries, whose potential has not yet been realised, should be given priority to increase global investment in solar PV to make the energy transition more inclusive, the report says.
It also points out that implementation of financial innovation is essential for the rapid expansion of solar energy sources around the world.
“Sustainable financing instruments such as green bonds, dedicated climate funds, blended finance, credit enhancement instruments, etc., hold great potential for channeling substantial capital into energy transition-related technologies such as solar,” the report says.
On a lesser scale, the market in the Middle East and Africa (MEA) accomplished an installation of 7.1 GW, a record-year for the region accounting for a three per cent share of the global market.
The G20 New Delhi Leaders Declaration signed upon the tripling of the global renewable energy target by 2030, accounting for 11,000 GW. Ahead of the upcoming UNFCCC COP28, breaking down these commitments and challenges can provide room for negotiations in Dubai.
As per the Solar Technology report, cumulative solar deployment is expected to reach nearly ~5 terawatt by 2030, having crossed one terawatt in April 2022.
Investing in the renewable energy industry is primarily dominated by investments in the solar energy sector. It is interesting how solar power leads the global renewable energy investment and how much more is needed to achieve Net Zero.
So far, ISA is facilitating over 9.5 GW of solar applications in 55 developing countries, including LDCs and SIDS, and has already provided training to nearly 4,000 people across the developing world on ways to make a living out of supporting solar energy.
With ISA and a successful G20 summit, India is in a position to leverage this and provide a platform to facilitate and bring focus on the challenges and gaps in finance, market and technologies for solar scalability.
