Shining Light on Five Top Solar Trends of 2023
June 15, 2023
With increasing concerns about climate change, the solar energy sector has witnessed remarkable growth and innovation in the last decade. From breakthroughs in solar panel efficiency to the rise of innovative financing models, the trends emerging in 2023 are set to speed the renewable energy landscape for a global shift towards a greener future.
Solar power is one of the fastest-growing electricity sources in the US. According to the International Energy Agency, worldwide solar generation could surpass natural gas by 2026 and coal by 2027. Lower production costs, growing concern around climate change, evolving global energy policies, and increased pressure from investors on companies to adopt environmental, social, and corporate governance (ESG) policies are pushing renewables into the mainstream.
Despite seeing slowed growth within the industry in 2023 due to inflation, rising interest rates, equipment sourcing delays, and trade uncertainties, growth volumes are expected to pick back up. As the world continues its transition towards renewable energy, we are tracking the following trends for the industry in 2023:
1. High Fossil Fuel Costs Make Renewable Energy More Cost-Effective
The price of oil, natural gas, and coal have increased in part due to Russia’s invasion of Ukraine and continues to impact. A natural gas shortage has also temporarily spiked interest in coal, which caused prices to soar last March and rise and dip repeatedly since. High natural gas and coal prices impact our electricity rates as the US produces most of its electricity from fossil fuels. In 2022, 22% of electricity was generated from coal and 38% from natural gas. However, fully transitioning to renewable energy will take years as energy companies and governments are setting goals to achieve net zero atmospheric carbon impacts out to 2030 to 2050.
2. Diverse Energy Storage
BDO Global predicts that energy storage will play a significant role in the power grid as a valuable asset in 2023 and beyond. This development is expected to enhance the reliability and resilience of decentralized power systems. The use of energy storage systems, particularly batteries, in combination with solar panels is projected to increase throughout the years. This trend is driven by the need to tackle the intermittent nature of solar power and to ensure backup power in the event of outages.
3. New Materials and Innovative Approaches to Solar Energy
Perovskite Solar Cells
In 2023, we will see progress in the field of research and development concerning novel materials used in solar panel manufacturing, called perovskites. These materials hold the potential to convert sunlight into electricity, thus enhancing efficiency and reducing costs.
Floating Solar Farms and Sun-Tracking Technology
An article featured in BBC Future explores the use of sun-tracking technology in floating solar panels. The referenced project addresses one of the primary challenges solar technology faces: sunlight variability. The innovative design of this solar farm enables it to track the sun’s movement, capturing the maximum possible amount of sunlight and optimizing electricity production.
Agrivoltaics Accelerate Solar Development on Farms
Solar developers are pushing the boundaries in 2023 by exploring agrivoltaics, where crops are cultivated alongside solar panels. Agrivoltaics elevates solar panels to a greater height above the ground while maintaining sufficient spacing between them, allowing agricultural operations to take place amidst the array. With agrivoltaics, plants that grow under and around the panels contribute to a cooler environment for the panels, helping to improve their solar conversion efficiency. In turn, shade from the panels helps to conserve water and prevent soil loss, while improving crop yields. This approach opens possibilities beyond just creating habitats for pollinators.
4. Inflation Reduction Act Solar Tax Incentives
The Inflation Reduction Act of 2022 has allocated an unprecedented $369 billion towards advancing climate and energy objectives. However, the full execution of this legislation will require time as the industry navigates the intricacies of meeting specific criteria outlined in the Act, which are essential for qualifying for substantial tax credit incentives and value additions. The interpretation and implementation of this law will be closely monitored throughout 2023 to assess its ultimate impact. Read more.
5. Decentralization of Power Generation
The trend toward decentralized power generation is projected to persist throughout 2023. This movement has gained substantial traction in recent years, propelled by energy self-sufficiency and the availability of cost-effective solar panel systems. Decentralization is appealing for residents in rural areas, where traditional power infrastructure may be limited or absent altogether. By installing solar panel systems in homes, businesses, and various structures, individuals can generate their own power and shrink their dependence on the grid. Additionally, surplus energy produced by these systems can be sold back to the grid, creating a passive income revenue source. Battery storage systems further empower individuals and businesses by allowing them to accumulate excess energy generated during daylight hours for use during periods of high demand or when sunlight is scarce.
The Future of Solar is Bright
Despite experiencing a slight slowdown due to various factors in 2023, solar capacity growth is expected to substantially grow in the coming years. Collaborative efforts between governments, industries, and communities will be crucial in overcoming the remaining challenges and unlocking the full potential of solar energy. By embracing renewable technologies, we can help support sustainable development, create new job opportunities, and ensure a cleaner planet for generations to come.
For more information on S&ME’s solar-related services, please contact Tom Raymond.