New research shows that by 2050, solar energy will become the most dominant energy source. While this shift holds the promise of a cleaner energy future, four major challenges could hinder progress: the need for a stable power grid, securing solar financing in developing countries, meeting supply chain needs, and overcoming political opposition from declining industries. Addressing these barriers is considered more effective than financial tools such as carbon taxes in advancing the clean energy transition.
New research suggests the world may have passed a "tipping point" where solar energy will inevitably become our main energy source.
The study, based on data-driven technical and economic models, found that solar photovoltaics (photovoltaics) are likely to become a major source of electricity by 2050 - even without the support of more ambitious climate policies.
However, the report warns that four "obstacles" could hinder this process: establishing a stable power grid, financing solar power in developing economies, the capacity of the supply chain and political resistance in areas where there are job losses.
Policies that address these barriers may be more effective than price instruments such as carbon taxes in accelerating the clean energy transition, researchers say.
The research was led by the University of Exeter and University College London as part of the Economics of Energy Innovation and System Transformation (EEIST) project, funded by the UK Government's Department for Energy Security and Net Zero and the Children's Investment Fund (CIFF).
Redefining energy forecasting
Dr Femke Nijsse, from Exeter's Institute of Global Systems, said: "Recent advances in renewable energy means that fossil fuel-dominated forecasts are no longer realistic. In other words, we have avoided a 'business as usual' scenario for the electricity sector. However, old forecasts often relied on models that saw innovation as happening outside the economy. In reality, the application of technology is linked to companies learning how to innovate more cheaply. There is a virtuous cycle. Incorporating this cycle into the forecast reflects the rapid development of solar energy over the past decade and into the future. Traditional models also tend to assume that the "end of learning" is in the near future - when in fact, we can still see rapid innovation in solar technology. Using three models that track positive feedback, we predict that solar photovoltaics will dominate the global energy mix by mid-century. "
Researchers also warn that solar-dominated power systems could be locked into a configuration that is neither resilient nor sustainable, relying on fossil fuels to provide dispatchable power.
Solve obstacles
Instead of trying to achieve a solar transition, governments should focus their policies on overcoming four major "barriers":
Grid Resilience: Solar generation is variable (day and night, seasonally, weather), so the grid must be designed with this in mind. "If measures are not taken to deal with this variability, you may end up having to compensate by burning fossil fuels," said Dr. Nijsse. She said ways to build resilience include investments in other renewable energy sources such as wind, transmission cables to connect different regions, widespread power storage and policies to manage demand such as incentives to charge electric vehicles during off-peak hours. She added that government subsidies and research and development funding would be important in the early stages of building a resilient grid.
Access to finance: The development of solar energy will inevitably depend on the availability of finance. Currently, low-carbon financing is highly concentrated in high-income countries. Even international financing is heavily skewed towards middle-income countries, leaving lower-income countries - especially African countries - lacking in solar financing despite their huge investment potential.
Supply Chain: A solar-led future is likely to be metals and minerals intensive. Demand for "critical minerals" will increase in the future. Electrification and batteries require raw materials such as lithium and copper on a large scale. As countries accelerate decarbonization, demand for copper and rare earth elements from renewable technologies is expected to account for 40% of total mineral demand by 2040, demand for nickel and cobalt will account for 60% to 70%, and demand for lithium will account for nearly 90%.
Political Controversy: Resistance from declining industries could undermine transition. The speed of transformation depends not only on the economic decisions of entrepreneurs but also on how desirable decision makers consider the transformation. A rapid transition to solar energy could jeopardize the livelihoods of up to 13 million people working in fossil fuel industries and dependent industries around the world. Regional economic and industrial development policies can address inequities and mitigate the risks of resistance from declining industries.
Dr Nadia Ameli, of UCL's Sustainable Resources Institute, said of funding barriers: "There is growing consensus that as global average costs of renewable energy fall significantly, it will be easier for developing countries to decarbonise. Our research reveals persistent barriers, especially given the challenges these countries face in accessing finance on equitable terms. To accelerate the global decarbonization agenda, appropriate financing remains a priority."