India'S Solar Installations, To Top The World!

The U.S. Energy Information Administration (EIA) is the branch of the U.S. government responsible for global energy sector research. The latest International Energy Outlook report released by the agency predicts that India will dominate the world in terms of installed solar capacity by 2050.

The EIA released the report earlier this week, which is the latest in a series of annual publications projecting the global energy mix in 2050. The report models a number of scenarios related to the adoption of zero-carbon technologies globally and the costs associated with that transition.

EIA notes that its projections do not take into account important legislation or regulations that may be passed, such as the Inflation Reduction Act, which has had a profound impact on the U.S. energy industry, but the report is still a very useful tool for thinking about how the solar industry may change in the coming years.

India to dominate solar industry

The most striking conclusion of the report is that the EIA expects the global solar industry to be dominated by India by 2050, rather than the current industry giants China and the US. These numbers come from EIA's "reference" scenario, a projection it makes for its Annual Energy Outlook series,

which EIA admits is not "the most likely forecast for the future, but rather a baseline for estimating the impact of policy or technology changes."

The authors of the report project that by 2050, India will be the only country with more than 1TW of installed solar capacity, with a total of 1.1TW installed, more than double the 468GW installed capacity in Europe and Eurasia.

Solar will also dominate India's domestic energy mix. data from the IEA shows that India's installed solar capacity will grow at an average annual rate of 11.3% from 2022-2050, outpacing all other countries. In contrast, India's liquid fuel production will decline at an average annual rate of 11.4%. This suggests that India will not only invest heavily in solar electric capacity in the coming decades, but may also attract investment from its historically productive oil and gas sector.

In all countries surveyed, solar power is expected to grow at a phenomenal rate. In Africa, installed solar capacity is growing at an average annual rate of 8.5%, which is tied with geothermal power for the highest growth rate in Africa. The total installed capacity of the solar sector in Africa is expected to reach 140GW by 2050, compared to only 8GW for the geothermal sector.

Similarly, Europe, Eurasia and the U.S. each have the second-highest CAGRs for their respective solar sectors, behind geothermal power and battery storage, suggesting that solar is an attractive investment option for many regions, despite the different priorities for new energy infrastructure investment.

According to EIA projections, India will account for more than one-eighth of the world's installed solar capacity by 2050. This shift also suggests that the global concentration of installed solar capacity will be lower than it is today. the EIA notes that China accounts for 4.2GW of the 1.4TW of solar capacity installed globally in 2022, alone responsible for nearly one-third of the world's installed solar capacity.

Solar Booms in Low-Zero Carbon Cost Scenario

The report also bases its projections on two different cost scenarios for the energy transition up to 2050, one with higher costs of decarbonizing the world's energy mix, and consequently lower possibilities for innovation and investment in renewable energy, and the other with the opposite.

This is particularly evident in the solar sector, where developers and manufacturers continue to invest in new technologies and manufacturing processes to improve the conversion efficiency of solar modules. The continued growth of the global solar industry will therefore require significant capital investment, and ensuring that new solar research and development is carried out in a cost-effective manner is a prerequisite for the expansion of the industry.

The EIA reports that the global solar industry will reach 5.9 TW of installed capacity in the Low Zero Carbon Cost Scenario, compared to 3.3 TW in the High Zero Carbon Cost Scenario.The most significant change is in the U.S., which is projected to reach 550 GW of installed capacity in the High Cost Scenario, compared to 1.2 TW in the Low Cost Scenario.This change is equivalent to more than doubling the U.S. solar installed capacity more than doubling, and the U.S. share of global installed capacity is about one-fifth.

Other significant impacts will be seen in Africa, where installed capacity increases from 93GW to 235GW, and in India, where installed capacity increases from 877GW to 1.4TW. At the same time, China's contribution to the global solar industry will remain relatively unchanged under both scenarios. In the high-cost scenario, China's installed capacity is 847GW, and in the low-cost scenario, China's installed capacity is 1.5TW, both accounting for about a quarter of the world's total solar installations.

Perhaps most encouraging for the energy transition as a whole is that the expected growth in the low-cost scenario will also result in a reduction in installed fossil fuel capacity. In the high-cost scenario, the fossil fuel sector is projected to reach 5.4 MW of installed capacity, whereas in the low-cost scenario, this figure is reduced by about a third to 3.7 MW.This suggests that, as is expected to happen in India, the expansion of the solar sector could divert money and attention away from conventional power generation.

In a statement accompanying the report, EIA Administrator Joe DeCarolis said, "Renewable energy is becoming an increasingly cost-competitive source of electricity, and is growing fastest in the face of high economic growth and increased electricity demand." DeCarolis also addressed the importance of investing in battery storage as part of this transition. In Italy and the United States, developing effective energy storage solutions is an integral part of the clean energy transition.

DeCarolis continued, "Battery storage accounts for less than 1% of global electricity capacity in 2022."" EIA expects battery storage capacity to increase to 4-9% of global electricity capacity by 2050."