Solar is among the cheapest ways of generating electricity, and it’s clean. Here, we examine the challenges and opportunities that are driving success in solar around the world.

The Solar Advantage

As an energy source, solar is an unlimited renewable resource that can be used for a variety of applications including electrical power, heating, cooling, cooking, transportation, fuel production and more. Because we obtain it as pure energy, solar can be converted to many other forms. However, it is only available during the day and only when the sun shines. That’s why when storage becomes cost-effective, it will revolutionise renewables and push the world towards a more sustainable future.

While solar has been widely criticised for being expensive and often inefficient, the tables are now turning. Technology has improved considerably, costs are decreasing rapidly, and more importantly, environmental benefits are on the rise. In fact, many governments worldwide have made decisions to increase their use of solar power in preference over traditional fossil fuels such as coal.

Today’s technology enables us to harness the sun in several ways: Photovoltaic (PV) which converts light to electricity, Concentrated Solar Power (CSP) which uses heat from the sun (thermal energy) to drive utility-scale electric turbines, and heating and cooling systems which collect thermal energy to provide hot water and air conditioning. 

Solar power can be deployed through distributed generation systems, whereby panels are mounted on the ground in arrays or on rooftops located closely to where the energy is used, challenging the traditional model of a large grid utility with power generation stations far from the consumption point, requiring long-distance high-voltage transmission lines. The latest technologies can be augmented into utility-scale applications to produce energy as a central power plant. Any electricity generated is sent to the grid or to battery storage for off-grid or hybrid systems. 

2017 was a stellar year for solar¹ around the world – the global market grew 26 per cent, with 98 GW of grid-connected PV capacity installed². This represents more new solar capacity than any other power generation technology. And that’s more than fossil fuels and nuclear combined.

Forecasts for 2018 predict that it will be the first ever triple digit year for the global solar market, with an anticipated 106 GW coming online³. While the global market grows, China, the USA, Japan and India continue to dominate installation, although it is predicted that their share will shrink as the rest of the world jumps on the solar train, in particular, Brazil, Egypt, Mexico, the Netherlands and Spain⁴.

In Australia, the energy mix is changing. There are around 13 GW of renewable projects currently committed with another 20 GW proposed, noting that peak demand is around 33 GW. “In terms of renewables, the solar market is certainly growing – we have more than 6 GW of rooftop PV with 20 GW projected by 2040,” says Winodh Jayewardene, WSP’s Technical Executive, Network Connections and Performance for Power.

Recent projects include the Solar Flair Alliance where we conceptually developed and studied a 150 MW parabolic-trough solar power thermal generation plant, proposed for location in Central Queensland. The consortium included International leading technology providers, state and federal sponsors as well as the leading Australian banks. We have also completed a pre-feasibility study for ActewAGL into the risks and costs for a proposed 22-megawatt solar power plant in the Australian Capital Territory.

New data from GTM Research shows that 18 states in the USA will install 1 GW or more of PV between 2018 and 2022. Together this will represent in excess of 80 per cent of the country’s installations. In the Southwest region, we are currently supporting a client during the start-up, commissioning and performance acceptance testing of a solar project. Our team is facilitating the transition of project operations from the general contractor to plant owner, and providing a technical interface with equipment vendors and other contractors during start-up.

Latin America is a region that’s making its mark on solar. In 2010, there were barely any solar installations in the region. By 2021, solar capacity is expected to reach 40 GW⁵. Interestingly, Brazil has the greenest energy mix of the world’s largest energy consumers – almost 45 per cent⁶. And Colombia is an emerging solar market – the country installed its first PV power plant in 2017. WSP is working in the region, providing technical advisory services through an independent assessment of the net energy yield for a portfolio of solar PV projects. Each project is under 9 MW AC and will sell energy at a stabilised price as part of the country’s Small Means of Distributed Generation program. Deliverables include PVsyst reports, energy yield assessment reports, and site visits to determine constructability/suitability issues.

In Africa, the largest market continues to be South Africa, although in 2017, Egypt installed its first solar power plant (below 100 MW). In Southern Africa, we delivered the environmental and social impact assessment for the Kalahari Solar Power Project, the first concentrated solar power initiative in the country to be brought to the feasibility stage, on behalf of Group Five. We also managed the stakeholder consultation process which was of great significance given the potential changes to the landscape. In addition, we have also worked on a range of projects in Zimbabwe, Burkina Faso, Nigeria, Zambia, Ghana, Kenya, Mozambique, Senegal, The Gambia and South Africa.

GTM Research’s Global Solar Market Attractiveness Index points to the Middle East as being one of the most attractive markets for new-build solar in the world. It made headlines for driving record low solar power tariffs in 2017 in competitive auctions. This disruption saw Masdar and Energies consortium placing the lowest-ever bid for of US $1.78c/kWh⁷  for a 300 MW solar PV project in Saudi Arabia. 

In the Middle East, WSP was appointed lender’s engineer to an international financial institution seeking to finance a renewable energy developer with a portfolio of solar PV systems. The project sites utilised both thin film and polycrystalline technology with various system designs. Ranging from 0.59 MWp to 11 MWp, the licensed and unlicensed projects included one operational plant, seven plants under construction, and 10 further sites under development. We identified technical issues outlining country-specific processes and risks involved, which allowed our client to make informed decisions on their potential investment. 

In the UK, solar accounts for about a fifth of the electricity generated⁸. However, domestic solar installations are on the decline due to the government slashing the feed-in tariff regime in 2016, which has largely dampened the financial attraction for householders. In the southern part of the country, as sustainability consultant, we mapped out the ‘net zero carbon’ strategy for Graylingwell Park’s new build and retrofit housing project, a flagship zero-carbon community under development. As solar PV is a key element in the development’s renewable strategy, we handled this aspect of the project from resource assessment to functional specification and tender.

China has the largest global solar power capacity by far – it now operates one third of the world’s solar power generation capacities. In 2017, the country installed more than half of the world’s solar capacity – 52.8 GW or 53.3 per cent in 2017. A lot of this growth has been driven by the feed-in tariff program which was basically uncapped. Today, China is home to the world’s largest floating solar farm on a lake northwest of Anhui province’s Huainan city. WSP has considerable experience in building solar PV and solar hot water systems for clients in China, mostly for commercial applications less than 1 MW.

According to Bloomberg New Energy Finance, global electricity demand is increasing with projections for 38,700 terawatt-hours by 2050, up from 25,000 in 2017. Not surprisingly, this is driving significant new investment in power generation. 

Between 2005 and 2030, energy consumption is expected to increase by 50 per cent with the majority of demand coming from developing countries. Oil, coal and gas together still account for the main sources, although electricity generation from renewable sources, specifically solar, is increasing rapidly. Certainly, the energy mix is changing globally to include more renewables.

Leveraging a medium scenario for growth, research shows total global installed capacity could reach 1 TW in 2020, as shown in the graph below⁹.

Despite this, there are still about one billion people without access to electricity. This is by far one of the biggest challenges of our time – making sure we bring electricity to these developing communities in an affordable and sustainable way. Pleasingly, in line with the United Nations Sustainable Development Goals to ‘ensure access to affordable, reliable and modern energy for all by 2030’, it is good to see that progress is being made worldwide. Decentralised systems comprising solar PV in off-grid and mini-grid systems are leading the way as they are the least-cost solution for the bulk of the additional connections systems.

While solar power is one of the most promising renewable energy technologies, there are a few stumbling blocks that need to be addressed before it can become a larger player in the power generation mix. One of the biggest hurdles is the variance in solar intensity. For example, the sun provides twice as much energy to the Mojave Desert in the US as it does the Pacific Northwest of the country. As the output of panels depend on the amount of solar energy received, there are correlated variances in converted energy when comparing differing locations. Proportionately, this means that financial return on investment is greater in some parts of the world than others. 

Photovoltaic efficiency is another obstacle. While technology is evolving rapidly, the efficiency of a solar panel determines how much of that power can be used, and most commercial panels on the market have efficiency ratings of 25 per cent or less. In this regard, improved bifacial PV technology could drive efficiency.

Reliability is also a factor that needs to be taken into consideration. While a solar panel can produce electricity for 12 hours per day, it will only reach peak output for a short period of time around midday. Solar systems that track the sun can address this, but it still means that panels spend very little of the day producing at maximum capacity. Storage batteries can charge during the day and provide a small amount of power at night, but this can be expensive and inefficient.

According to experts, Australia is the first country in the world to be headed for a solar peak where the grid cannot handle the excess level of electricity generated. There has been a 100 MW of solar power installed every month this year, or an average of six rooftop panels every minute, which is adding considerable generation capacity into the grid. To minimise the peak, investment in batteries and smarter electricity networks is required. Shifting electricity demand periods and altering pricing will also assist. 

In the US, the tariffs on imported solar cells and modules imposed by the government are leading to a decrease in solar PV installations – some 7.6 GW predicted over the next five years (2018-2022). This will have a bigger effect on the utility-scale solar segment rather than residential or commercial.

For Latin American countries, solar is increasingly competing with oil, coal and gas on an uneven playing field, without significant subsidies or incentives. Bolivia holds the world record for the strongest-ever UV rays – approaching levels normally seen on Mars. This is the reason the government has installed the country’s largest PV plant near Potosi.

While there is an energy revolution taking place in Africa with off-grid and mini-grid power generation becoming popular, challenges in energy policy frameworks exist which are often not attractive for private investment. 

While sunlight is abundant in the Middle East, solar energy is still a fair way from being the prime source of power given the region’s focus on oil and gas production. Climate causes a problem as well – sand storms common to the region often blanket cities and settle on solar panels, thereby reducing the amount of energy that can be produced by as much as 30 per cent. 

Barriers to solar adoption in the UK include the grid infrastructure – which can manage current generation levels – but is expected to struggle in the future as more capacity comes online. Weather variations in the country are also impacting solar production. 

In January 2018, a report released by the International Renewable Energy Agency (IRENA) predicted that electricity from renewables will fall within a cost range or be consistently cheaper than fossil fuels by 2020. Not only that, but we are seeing policy shifts towards competitive pricing mechanisms which are slashing solar PV bid prices to between USD 20 per MWh and USD 50 MWh. 

As technology evolves so too do solar systems.

While digitisation is often cited as a stumbling block, we see unprecedented opportunities for all organisations in the solar value chain to become part of the evolution that is taking place towards greater efficiency. For utilities, digitisation can bring about greater stability. For residential and commercial users, it is driving adoption of smart technology and providing for greater connectivity and convenience. Overall, enhanced digitisation can help to better integrate solar into the grid which in turn helps optimise both supply and consumption.

Overall, the growing use of solar power and the availability of better battery energy storage is transforming both developed and developing communities. Recent developments have seen batteries playing a key role across the electricity-supply sector – from helping household consumers reduce their energy bills to providing support to national grids. Energy storage has and continues to become an integral part of our future electricity supply systems. Indeed, they are bringing us one step closer to a renewable future. 

5 Steps to Solar Success

When it comes to ensuring solar plays a key role in increasing the share of renewables to meet global energy demands, there are five key factors to consider:

1. Regulations: A positive regulatory environment is needed to recognise solar as an electrification solution, detail how the grid will expand and evolve, establish product standards and reduce import duties on solar products and accessories. In addition, a price on carbon needs to be set – to ensure the full value of solar is realised – both economically and environmentally.
2. Investment: A robust business environment will help attract investment to the sector. Clear policies are needed around products, people and practices.
3. Digitisation: The adoption of digital processes throughout the power value chain has the potential to reduce operational and maintenance costs for utilities. Artificial intelligence, drones and digital systems can help boost the bottom line.
4. Cyber Security: While new technologies provide opportunities for a smarter, more reliable grid with assets and devices increasingly connected through the Internet of Things (IoT), there is a high risk of cyber threats as there is significantly more big data being shared. The energy sector has also been singled out as one of the most targeted for malicious attacks. 
5. Pricing: While prices for solar are falling globally, significant variations exist from country to country. This is driven by hardware costs, wages, taxes, regulations, market fundamentals and tariffs. It is also reflected in differences in system design, installer, customer characteristics, and more. Nevertheless, affordability needs to be considered.

The Bottom Line

It is an exciting time to be part of the solar energy revolution. The growth in demand for clean energy has reached unprecedented levels, and signals a shift in the energy paradigm. The increased adoption of solar systems and cost declines are representative of the degree to which renewable energy is disrupting the global energy industry.

Turning to solar and other forms of renewables for power generation is no longer an environmentally conscious decision – it is now also an economically smart one. Governments around the world are recognising this and making low-carbon agendas – underpinned by solar and other forms of renewables – part of their mandates.

As the energy mix changes and renewables gather further momentum, communities around the world will benefit from cleaner energy generation as well as a boost in economic growth, employment and climate mitigation.

1 Renewables 2018 Analysis and Forecasts to 2023: International Energy Agency
2 Global Market Outlook for Solar Power 2018 – 2022: Solar Power Europe
3 Global Solar Data Hub: GTM Research
4 Global Solar Data Hub: GTM Research
5 Latin America PV Playbook: GTM Research
6 Renewables 2018 – Analysis and Forecasts to 2023: International Energy Agency
7 UAE’s Masdar, EDF Energies lead bidding for Saudi solar plant
8 UK home solar power faces cloudy outlook as subsidies axed: The Guardian: 27 June 2018
9 Global Market Outlook for Solar Power: 2018-2022 Solar Power Europe