- BloombergNEF and Schneider Electric study sees massive untapped potential for rooftop solar in the world today
- It can grow to 2.2 TW of rooftop PV capacity being installed by 2050, along with encouraging over 1,000 GWh of energy storage
- Policies need to be designed to encourage its uptake, success while avoiding an unsustainable boom as solar prices will continue to plummet going forward
Come 2050, and the world could have 2.2 TW or 2,200 GW of customer sited solar capacity, something that can hugely benefit decarbonization targets of various nations, according to a new analysis. While the growth will be spread out across the globe, it will majorly be led by China, the US and India. By the target year, there is likely to be 450 GW/1,047 GWh of storage paired with customer-sited solar, thanks to drop in battery prices. Most of this capacity is anticipated to come up post 2030.
A new report titled Realizing the Potential of Customer-Sited Solar by Bloomberg New Energy Finance (BloombergNEF) and Schneider Electric sees customer-sited solar as an ‘untapped opportunity’ for the world that can enable 167 million households and 23 million businesses to be generating their own clean energy by 2050, an 8-fold increase from the 0.27 TW installed by end-2020. Provided roadblocks to development are removed, as described in this report, BNEF and Schneider point out ‘long-term projection could in fact be larger.’
When distributed in terms of market potential, more than half of rooftops in the US or Germany could host solar, according to the report, and it will go up to 2/3rd in the UK and up to 80% in Australia, driven mostly by sustainability and resilience offered by this medium.
A high internal rate of return (IRR), however, remains the top most factor for customers to opt for this capital intensive technology. Analysts argue that the economic case for adding solar during construction of new buildings is particularly strong.
Of course, the ongoing technological development, a parallel drop in the cost of solar along with government incentives are helpful reasons, but the authors of the report caution that the world should avoid an ‘unsustainable boom’. They want policies to be designed keeping in mind that going forward solar costs will continue to fall over time and hence governments should moderate support to reflect the changing dynamics.
As rooftop solar grows in clout, policymakers need to ensure unlocking flexibility because high levels of solar energy cannot be absorbed by the existing grid infrastructure and may end up destabilizing the grid. Hence, addition of energy storage ‘becomes valuable’ and it can be encouraged through adjusted export rates for energy exported to the grid, time-of-use retail electricity rates, enabling payments for storage to provide grid services, and implementation of demand charges.
“Customer-sited solar is a huge opportunity that’s often completely overlooked,” said Vincent Petit, Head of the Schneider Electric TM Sustainability Research Institute, and SVP of Global Strategy Prospective & External Affairs at the company. ““This is vital for decarbonizing the power sector and offers huge additional consumer benefits. It’s time to embrace this transformation.”