Solar energy set to break another record this year

This year’s increase in installed solar power capacity is likely to break the previous record of 593 GW, according to climate think tank Ember.

Ember analysts noted that total new installations would exceed expectations but urged countries to “maximise the high levels of installed solar capacity being built today and ensure further capacity expansion in the coming years”.

In percentage terms, this year’s new solar capacity additions would be a 29% increase, a significant slowdown from last year’s 87% increase in 2022. But this year’s growth isn’t just coming from solar power’s usual fans, like Germany and China. This year, according to Ember, solar is growing in new locations, like Saudi Arabia and Pakistan.

This could be due to falling prices for solar modules amid abundant supply. According to BloombergNEF, prices have fallen to $0.10 per watt, which was a significant benefit for solar developers. However, it was not a significant benefit for module manufacturers.

The growth in installed solar capacity also creates problems, the most important of which is the risk of negative electricity prices, as modules overproduce during periods of lowest demand, forcing wholesale electricity markets into negative prices.

Europe has seen a record number of negative electricity prices this year, with 7,841 in mid-September, the Financial Times reported last week. “Everyone knows that if you produce too much oil, the price will collapse and producers will lose money. And it’s no different with renewables and electricity,” Bjarne Schieldrop, chief commodities analyst at Swedish bank SEB, told the FT at the time.

Ember believes the solution to this problem is already within reach, in the form of larger grid infrastructure and batteries. “The key will be to ensure that countries have enough network capacity to transport power to where it is needed, as well as developing battery storage capacity to supplement solar power outside the sunniest hours,” the think tank said.

By Irina Slav for Oilprice.com

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