What Will The Solar Industry Look Like In 2025? National Competitiveness In The Global Solar Race

May 27th, 2014 by James Ayre

What will the fast-globalizing solar industry look like in the year 2025? Who will win, who will lose, and by what mechanisms? Which nations? Which technologies? Which industries? Which companies?

These are some of the questions explored by a group of 20 of the top solar executives in the world at a day-long workshop at Stanford University last summer.

Brought together by Stanford University’s Steyer-Taylor Center For Energy Policy And Finance and the German Ministry of the Environment, these executives were asked to explore the crucial but little-explored question of how the rapid changes occurring in the fast-growing solar energy sector will play out over the next decade.

As many have noted, the industry is at a transformative intersection — big technological changes, big geopolitical fights, failing companies, fast-growing companies, etc. This makes the future of the industry somewhat hard to predict — amongst those brought together, though, some likely patterns did emerge as relatively close-to-consensus.

The gathering was built around the use of what the organizers have stated they “believe is a first-of-its-kind exercise” — “a tightly structured yet freewheeling discussion with industry leaders that sought to chart in-detail how, in four different scenarios, the solar industry might develop between now and 2025.”





The four scenarios — all being quite different (Global Sun, Solar Systems, Sunblock, and Total Eclipse) — created the opportunity to take a “realistic, unbiased look at the way that comparative advantage might play out in the globalizing solar industry.”

“The workshop aimed to flesh out, within each scenario, how the industry’s players might position themselves to maximize both their own financial strengths and solar energy’s overall cost-competitiveness.”

The four key conclusions of the report are detailed below:

1. “Glocalization” — This refers to the idea that in the near future a handful of dominant global players will likely each be doing different things in different end markets around the world. Which countries and companies are doing “what” is something that is of course quite hard to predict — and will, as the report notes, determine who makes money, and who doesn’t.

2. Countries’ Comparative Advantages — Different countries will play different roles in the global solar industry than they do now. The participants in the gathering generally agreed that the US and Germany were likely to manufacture “only the most sophisticated solar components in their home markets” while companies headquartered in China or other low-cost markets would likely dominate the production of commodity goods. There was considerable disagreement about where in the world this manufacturing would occur though.

3. Solar Beyond Subsidies — “The solar industry has grown based overwhelmingly on government incentives. Those subsidies will subside, participants agreed. Though solar power’s costs have fallen in recent years, workshop participants felt strongly that the costs need to fall much more for solar to become a sizable of the total global energy pie.”

4. Problems Plugging In — With the cost of solar falling, political and technical difficulties connecting solar installations into power-transmission grids are emerging as significant challenges to growth.

The full report is quite interesting. Those who would like to read it can find it at the Stanford Law School website.









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