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Why is the bet now on solar energy?

image credit: STI Norland
Javier Etayo's picture
CEO STI Norland

Born in Pamplona, ​​Spain, Javier Reclusa is an industrial engineer from the Universidad Nebrija, in Madrid, and has a master's degree in Renewable Energies and Investments in Energy Projects...

  • Member since 2021
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  • Dec 7, 2021
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Energy efficiency solutions have never been so popular. With the urgency to combat climate change and the global commitment to abruptly reduce carbon emissions around the world, renewable energies have gained prominence and the attention of the leaders and companies in the world, in addition to, of course, investment funds.

Among the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda made by the United Nations (UN), there is the objective of ensuring reliable, sustainable, modern, and affordable access to clean energy for all. This goal, together with the social moment we are currently facing, has drawn people's attention, leading them to question whether investing in photovoltaic solar energy is worthwhile.

The answer is yes. It's beneficial, not just for the SDGs, but also for your pocket, and it's what we call a smart investment. From an analytical point of view, taking into account the actions, strategies, techniques, and technologies available in the market and the perspective of future income, it is possible to affirm that this energy source will provide a safe final investment.

Current results and expectations for the future

A survey by the Global Solar Council has shown that the post-pandemic scenario is highly favorable for solar energy. The council formed by industry associations also pointed to an important boost coming from China, which in 2020 alone installed more than 48.2 GW of this energy source. In addition, there are expectations for the 2021 United Nations Climate Change Conference, also known as COP 26, for an even greater political effort towards the transition to global clean energy, with large investments expected for this cause.

In Latin and South America, another block on the rise in the deployment of solar energy, the source brought to Brazil R$ 15.9 billion in new investments and more than 99,000 new jobs in 2020, according to a survey carried out by the International Energy Agency Photovoltaic Power Systems Program (IEA PVPS). Not to mention that by 2050, there is an expectation of more than 139 billion in investments, generating more than 1 million new jobs in the country. When it comes to saving resources and sustainable economic development, solar energy cannot be left out.

The study also shows that the country reached the 9th position in the world ranking of "annual added power of the photovoltaic solar source", and from 2012 until the end of 2020, Brazil accumulated R$ 42.1 billion in investments in the source solar photovoltaic, generating more than 236 thousand jobs.

The most recent report by the British consultancy Wood Mackenzie, which brings the consolidated market data for 2020, shows that despite the Covid-19 pandemic, the world market for photovoltaic trackers grew from 35 GW to 44 GW this year, which represents an increase in the volume and interest of people about this source.

Motivation

Indeed, the cost of solar power generation has fallen in recent years. According to British consultancy Wood Mackenzie, the average selling price of trackers has fallen by 5.0% since 2019, and is expecting to remain falling until 2025. Added its low cost concerning the useful life, the generated energy, simple installation, and low maintenance of a plant - not to mention the non-emissions of pollutants and greenhouse gases - favors cost-benefit and return over investment.

It's a worthwhile investment for several reasons:

  • It's economical

That is the reason that led thousands of people to bet on solar energy: the economy, the cost-benefit. When opting for this technology, the company considers the region where the plant will be installed so that as much energy as possible can be generated, as factors such as the climate and soil influence the capture. With this assessment done, it is possible to achieve a 50% reduction in the cost of energy consumed and an annual savings of up to 80% in expenses, for at least 25 years, which is the average durability period of the solar plant.

  • Protection against inflation

Another economic advantage provided by the installation of solar energy is protection against energy inflation. In Brazil, for example, with the crisis in the electricity sector, prices soared. According to the Instituto Ilumina's survey, inflation in electricity prices between 1995 and 2015 was 50% higher than IPCA (Brazilian agency that measures the inflation of products and services sold in retail) in the same period. Thus, the solar source ends up being immune to economic variations in countries.

  • Increasingly valued

A trend that already implies for the whole society. A Lawrence Berkeley National Laboratory research - in the state of California - proved that people would be willing to pay $15,000 more for a house with solar panels installed than for one without it. Thus, no matter the size of the space in which this technology is applied, whether in a house or even larger places, the study shows that this source enriches the area where installed, which, consequently, will be better evaluated in the future.

  • Is it sustainable

The sun is the most renewable energy source available to people. Due to its great potential, added to its sustainability, photovoltaic solar generation technology is spreading more than any other in the world. The transformation of sunlight into energy, which takes place inside the photovoltaic cells of a solar plate, and the capture is optimized with the use of trackers. Still considering the issue of global warming and the finite nature of natural resources, today, more than ever, consumers demand sustainable solutions and ecologically correct products from companies.

  • Return on Investment, ROI

As mentioned before, these points just make this technology a smart investment, however, it is also proven that it is possible to recover up to 10 times the amount invested in your system. When installing the solar system, in addition to using clean energy, the entire amount invested will have a monthly return during the more than 25 years of your system's useful life, a period much longer than necessary to receive the amount invested and profit from the remaining time.

This whole panorama of reasons, with current results and excellent expectations for the future, makes it clear that this energy source is only growing and still tending to increase. There are already several countries in favor of regulating distributed solar energy, which helps people, whether in the sector or not, and also the world in general, contributing to the SDGs elaborated by the United Nations (UN).

Javier Etayo's picture
Thank Javier for the Post!
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Matt Chester's picture
Matt Chester on Dec 7, 2021

Do you find that there's an urgency to get solar installed now amid the uncertainty of the supply chain for components (and the impact that has on prices)?

Dr. Amal Khashab's picture
Dr. Amal Khashab on Dec 8, 2021

Great, but solar power cannot stand alone as a robust source. It is a good complementary among other sources.

Also, one should not forget its remittanat behavior depending on weather forecast. My advice is not to put all the eggs in one basket.

 

 

 

Linda Stevens's picture
Linda Stevens on Dec 8, 2021

Great article. I love the idea of a distributed energy generation system where we integrate solar as appropriate into many items. Moving away from central power plants is the way to go IMO. 

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