Transformational investment needed to power solar energy

Solar energy makes a significant contribution to global decarbonisation efforts but would do even more on the back of transformational levels of investment. The installed global PV capacity of around 800GW could in fact expand exponentially with the right funding.

Solar is already well established and more than half of the renewable energy capacity installed in 2020 was PV, and the sector accounts for 3.6% of global electricity generation totals. Government incentives have smoothed the path which has encouraged development by independents and utilities, and attracted capital into solar.

This increased scale and scope has changed the face of the market by driving down costs but a number of barriers must be overcome if solar is to fulfil its promise.

Grid connection and integration issues mean a number of high-resource areas are remote from the transmission infrastructure required to reach markets; remedies are both costly and slow to construct.

Intermittency and grid flexibility can also be challenging, and above certain penetration levels will require investment in baseload, storage or management.

Rising raw material, energy and shipping prices have also increased the cost of producing and transporting PV modules with around 100GW of contracted capacity said to be at risk of delays.

Scope to invest more in solar energy 

Demand is, however, driving innovation. Flexible PV panels, for example, have the potential to unlock entirely new applications for the sector. Although more expensive, these panels provide a light-weight, adaptable solution for uneven rooftops, less-substantial structures and even as a secondary power source for electric vehicles – an entirely different type of sunroof!

Floating PV is another growth area with installed capacity up by nearly a third in 2021 to pass 3GW; more than 700 projects are in operation globally with a further 300 in the works.

Falling battery costs and new business models based on aggregated distributed energy can also unlock untapped demand. Solar paired with residential energy storage can, in addition, increase the reliability of the system and introduce further savings.

Solar energy needs more focus to reach decarbonisation goals

Opportunity is not however the same as achievement, and there is much to be done if next-generation solar is to be a decarbonisation champion.

EV Private Equity believes in the increased role PV can play, which is why the sector is a core element in a forward-looking investment philosophy designed to secure quantifiable carbon impacts alongside positive returns.

We want to facilitate all that solar offers to the climate challenge, and are ready to invest in the solutions that will enable change at scale, and actively searching for the enabling opportunities that will transform the global energy supply and produce sustainable returns.

Kaivan Forouzesh is Associate, sustainable energy investor at EV Private Equity, a global investor committed to achieving greenhouse gas emission reductions through differentiated technology investment