In 2021, solar was the number one power generation source installed around the world. Over 300 GW of renewable power generating capacity was added of which 56% was solar, up from 47% in 2020, followed by wind at 31%. In other words, more solar power generating capacity was installed than all other renewable technologies combined.
Solar energy has grown in popularity since it was first introduced almost three decades ago. In the past, solar was considered too expensive and inefficient to be a viable alternative to traditional energy sources like coal and oil. But over the years, technological advancements and innovations have drastically improved the efficiency and cost of solar energy. This has made it a more attractive option for businesses, governments, and households alike and the world has seen an increase in the amount of solar energy used in recent years — a step in the right direction in the fight against climate change.
However, despite exponential growth over the last two decades, solar power still meets only a fraction of total energy demand. In 2021, as shown in the graphs below, the share of global primary energy from solar power was only a little over 1.5% while the share of global electricity production from solar energy was barely 3.7%. The category of renewables as a whole constituted 24.6% of the world’s total power generation. The future for solar however, looks bright as increasing adoption will continue to bring down costs, which have already fallen by 90% since 2009, and enable mass adoption. Since wind and solar are technologies and not fuels that must be mined, the more we deploy them, the better we’re able to make them. “Every time the global supply of solar doubles, the cost of adding more installations declines by almost 30%.”
However, the growth curves above are still promising since the adoption of technology tends to follow an S-shaped curve. Sales start slow as the technology is new and expensive and then take off past a “tipping point” and flatten once more as the market reaches saturation. Over time, the cost of these technologies has declined significantly to a point where it’s no longer the biggest obstacle in the face of mass adoption. More pressing challenges now involve things like state permits, flexibility, so power can be ramped up or down as per need, and planning around national grids.
The Largest Solar Panel Manufacturers Around the World
Most solar panels are manufactured in China, which has 8 out of the 10 biggest solar panel manufacturers in the world. Some companies in North America however, are also gaining traction. The three biggest manufacturers in the world, LONGi Solar, Tongwei Solar and JA Solar are all Chinese and difficult to invest in directly given their absence from US and UK stock exchanges. However, you can invest in them by putting your money in ETFs that hold them. The best one that I’ve found, which contains securities from many of the biggest Chinese and American solar companies, including First Solar, LONGi Solar and JA Solar is the Global X Solar UCITS ETF listed on the London Stock Exchange. It has 65.57% of its overall portfolio currently invested in securities from Greater Asia, 29.5% invested in the America’s and 4.93% invested in greater Europe. Another ETF also worth exploring is the Invesco Solar Energy UCITS ETF which has a portfolio that contains 52.39% American securities, 19.34% European securities and 28.28% Asian securities.
The two biggest solar cell manufacturers in North America are Canadian Solar Inc. from Canada, and First Solar Inc. from the USA, both of which are listed on several Western exchanges in Europe and in the United States. First Solar presently has a market capitalisation of $16.75 billion and has grown approximately 4 times in value since 2020, while Canadian Solar has a market capitalization of $2.26 billion and has also experienced significant growth since 2020.
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