Solar power installation continues to break records year after year, firmly establishing itself as a dominant force in the global energy landscape. According to a report released by SolarPower Europe, a staggering 239GW of new solar capacity was installed worldwide in 2022, surpassing the annual record for the tenth consecutive year. This demonstrates a 45 percent increase from 2021 and positions solar energy on track to overtake coal as the world’s primary energy source by 2027.
To put this growth into perspective, the amount of new solar power installed in 2022 could effectively power more than 170 million homes in the United States alone. The exponential rise of solar energy can be attributed to its increasing affordability and commercial viability, overcoming the so-called energy trilemma of sustainability, affordability, and security of supply.
As a result of its success, solar energy has triggered a surge in investment, with an estimated $380 billion projected to flow into solar projects in 2023. Significantly, this surpasses anticipated investment in oil production, which is expected to reach approximately $370 billion, marking the first time solar surpasses oil in investment.
Not only is solar outperforming fossil fuels, but it also attracts more investment than other forms of renewable energy. As of 2020, solar accounted for 43 percent of global investments in the renewable energy sector, surpassing offshore wind by 8 percentage points. In 2022, two-thirds of all newly installed renewable capacity came from solar photovoltaics (PV).
Despite these impressive milestones, solar energy still faces significant challenges in becoming the predominant source of electricity worldwide. Solar power currently contributes only 3.6 percent to the global electricity generation matrix, with Europe, North America, and China leading in solar PV generation growth in 2021. To achieve the necessary scale to combat the climate crisis, barriers such as grid infrastructure limitations and complex permitting processes must be overcome.
One of the key obstacles is the outdated and inadequate grid infrastructure, which is ill-prepared to handle the variable transmission rates associated with renewable energy sources. Additionally, the current grid system is designed for power transmission from a limited number of centralized power stations, rather than a vast network of geographically dispersed solar generators. This results in lengthy delays for solar projects seeking to connect to the grid, discouraging many from initiating solar initiatives.
Policy and regulatory hurdles also impede the rapid expansion of solar energy. Many countries impose lengthy and complex permitting procedures, while others rely on competitive bidding processes for contract allocation, which often disadvantages smaller solar generators. Furthermore, solar projects are predominantly concentrated in wealthier nations, leaving developing countries behind in the transition to cleaner energy due to investment risks, upfront costs, inadequate infrastructure, and economic instability. In response to these challenges, progress is being made worldwide to address the barriers hindering solar energy adoption.