The global demand for solar energy derived electricity has seen exponential growth over the last twenty years, annualized at a rate of 30 percent per year, while the costs of supplying that demand has experienced a similarly rapid decline, especially over the past five to ten years. The fall in installation costs has been the result of improvements in the manufacturing processes, the increased efficiency of solar technologies and of course as a result of economies of manufacturing scale.
When first identified as a viable renewable source of energy, photovoltaic solar panels (PV) were supported by government programs around the world offering incentives and feed-in tariffs in order to incentivise companies to invest and develop the technology. Much of the initial growth in PV was driven by these programs, especially in Europe, with Germany being particularly active in driving development and installations. This demand saw production levels increase and costs dramatically declined.
China has since taken the lead role in the development and manufacture of solar PV, with the technology experiencing exceptional worldwide growth. Solar PV is now competing increasingly well with conventional sources of energy, even with the governmental support for the technology being phased out.
2013 saw an all-time record of solar PV deployments, with more than an additional 38 GW (38,000 MW) of capacity installed, an increase of around 28 percent over 2012. Total deployed solar PV capacity reached 139 GW, an increase of 38 percent.
* Due to the 2014 data not being finalized yet, we have to rely on forecasts for that data.
The consensus expectation for solar PV deployments for 2014 is for between 46 GW and 50 GW of capacity to have been added to global electricity grids last year, a roughly 20 percent increase over 2013’s record year and an increase of more than 33 percent in total deployed solar capacity. Global solar generation capacity now lies at approximately 186 GW, exceeding 1 percent of the world’s total energy supply for the first time.
China and Japan are the primary growth drivers, accounting for as much as 14 GW and 11 GW of installed capacity respectively (and 33 GW and 25 GW respectively of total cumulative solar capacity). China is experiencing an incredible end of year surge in installations, after an easing of government bureaucracy in September, with as much as 9 GW of solar PV capacity expected to have been installed in the fourth quarter of 2014 alone. The U.S is expected to have installed 7 GW of additional capacity in 2014, bringing their total deployed to 19 GW. The U.K. is the largest European installer for 2014, and fourth globally, bringing more than 3 GW of new capacity into the grid.
Germany’s new installations declined in 2014, down more than one third from the previous year at just over 2 GW of new capacity. However they still remain the largest cumulative supplier of solar electricity, with more than 38 GW of installed capacity, amounting to seven percent of net electricity consumption.