The global solar panel installed base is forecast to reach 780 gigawatts (GW) by the end of 2020, up nearly 2,000% from a mere 40 GW a decade ago in 2010. This will top 100 GW annually over the next five years, say the market researchers, when energy from PV and battery technology will be competitive with natural gas.
The expansion, called phenomenal by Camron Barati, senior analyst for solar and energy storage at IHS Markit, can be attributed to a rapid reduction in costs and technology improvements, making solar-generated power more competitive with traditional fossil fuel sources like gas and coal.
One challenge standing in the way of further growth in the space is intermittency in the generation of renewables. This is driving battery storage, with demand for 80 gigawatt-hours (GWh) to be deployed within the next five years, a cumulative increase of approximately 400% compared to the installed base at the end of 2018. “Like the spectacular expansion currently happening in the global PV space, technological innovation and cost reductions will continue to fuel growth in the battery-storage industry during the coming years,” said Barati.
The growth in demand for battery storage will be good news to proponents of integration with renewables, especially in the US, which is poised to become the largest market for solar paired with energy storage over the next few years.
For both solar panel and battery storage technology, the ongoing reduction in equipment manufacturing and deployment costs will be a critical factor in propelling both industries forward says Barati.
With solar, incremental efficiency gains will continue to optimize the manufacturing process across the supply chain, from polysilicon development to semiconductor wafer and cell integration. Lithium battery storage will benefit from the increased scaling of the electric vehicle industry.
Within five years, IHS Markit believes solar panel and battery storage technology costs will reach a tipping point that will allow such resources to compete directly with natural gas, which has become a global benchmark for new electrical generation. That tipping point is the ability of solar and energy storage systems to generate energy at an approximate cost below $50 per megawatt-hour.