Solar energy is set to explode in popularity. That’s the conclusion of a new report by DNV, a global risk management company that services the energy sector. According to DNV, solar power is expected to become the cheapest source of new electricity globally by 2050. As a result, DNV expects that by 2050, 70% of the world’s electricity will come from solar and other variable renewables. Meanwhile, fossil fuels will only account for 10% of electricity production.


Solar power has been demonstrated to have a high cost-learning rate relative to other sources of energy. Cost-learning rate refers to the rate at which energy prices decline as supply increases. Solar power’s current cost-learning rate is 26% cost reduction per doubling of capacity. DNV anticipates that solar costs will decrease by at least 40% between 2023 and 2050. 


Solar energy capacity has grown at an impressive rate in recent years. Solar installations increased from 1 gigawatt (GW) in 2004 to 150 GW in 2021, a gain of over 10,000%. Installations even continued to increase during the COVID pandemic in spite of major supply chain issues. This increase in solar power supply will push prices down as time goes on. 


In addition, battery energy storage is expected to play a crucial role in supporting solar power growth. Battery energy storage costs declined by more than 95% between 1991 and 2018, and DNV predicts a further 80% decrease in costs by 2050. Batteries will provide storage either as standalone systems or in configurations like solar+storage or vehicle-to-grid. Also, innovations like solid-state batteries are likely to improve battery energy densities as time goes on. Utility-scale storage is expected to grow from 2.7 terawatt-hours (TWh) in 2023 to 8.8 TWh by 2050. 


With revenue of roughly 2.3 billion USD and over 12,000 employees worldwide, DNV is a recognized leader in providing technical advisory services to energy companies. Its annual report is a highly regarded source for industry information.


Stay tuned to find out whether solar energy could achieve a dominant position in world markets even sooner than 2050.