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Hopes and Fears: The Prospects of Solar Energy Industry

20.09.2017 — 0

In the early 2017, analysts predicted that solar energy industry is expected to become the world’s largest source of energy by midcentury. There is indeed a long way ahead. However, much has been already achieved, and it’s worth briefly reviewing how the industry developed over the last few decades.

In the recent years, global solar industry experienced a period of volatility that was partly caused by the changing market regulations and policies to support the industry. The other reason for being volatile were price fluctuations in the fossil fuels markets. Roughly speaking, solar power becomes less attractive as the fossil fuel prices decline. However, since the latter might be repleted in the next 100 years, solar power has a brighter future in the long-term.

The major regulatory milestones have been, first, the introduction of favourable solar tariffs in Germany in the 2000s that fueled the growth of the industry in Europe during that decade; second, the investment tax credit for alternative-energy stocks introduced by the U.S. helped propel solar installations in 2015. However, and perhaps more importantly, it incentivized people to invest into solar companies’ stocks, thus helping the industry become more established in the eyes of the financial markets.

Another recent global trends is the solar boom in Asia that has occurred since 2013. Between 2015 and 2016, China has outperformed Germany in terms of total installed solar capacity, having increased its score by adding 34540 MW and reached the level of 78070 MW. Japan also rose up to the second place in the global top-5, reaching the level of 42750 MW in the same year.

World Top-5 Counties by Total Installed Solar Power Capacity (MW), 2015–2016:

Previously, wind energy was considered as the main option for commercial renewable energy, while solar power was treated more as the option for private installations and energy generation. That is no longer the case. Moreover, now solar power is cost-competitive with traditional energy, and the industry no longer relies exclusively on subsidies that manipulate regular supply-demand dynamics, although they still play an important role in supporting the industry development.

**Picture credit: SSREN Report **

All this signifies an assuring and healthy long-term future of the solar energy. Many countries around the world — including Mexico, Chile and the United Arab Emirates — have chosen solar power over fossil fuels. In Mexico, solar has outperformed wind on the auction for a new electricity capacity, winning 74% of the available capacity, while leaving 24% for wind, and the remaining 2% for hydropower and combined natural gas. Similar auctions in the large countries of Latin America, e.g. Brazil, Chile, and Argentina, will drive the development of actual power plants in the coming years, creating a long-term demand from new energy contracts. There is also an emerging worldwide sentiment in support of solar energy, that regards it as being at the forefront of renewable energy generation.

Solar Price

Prices are another important factor that shapes the future of the solar energy. Most importantly, the price of solar panels has decreased steadily over the last decade due to technological advances. Second, the fluctuations in the fossil fuels markets, especially the decline of oil prices also help the solar industry indirectly.

In summary, there is a bright future ahead of solar energy, yet it is not coming very soon.** Join **Solar DAO to make it happen sooner — and make profits in doing so. The core ICO for SDAO tokens starts this October.

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