SINGAPORE (Reuters) - Utility-scale solar power capacity is expected to grow by double digits globally in 2019 and 2020, driven by expansions in the United States, Europe, Middle East and China, U.S. bank Goldman Sachs said on Thursday.

The ticker symbol and logo for Goldman Sachs is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., December 18, 2018. REUTERS/Brendan McDermid

Solar power is the fastest growing source of electricity generation, taking market share from fossil fuels like thermal coal and natural gas as governments and companies increasingly introduce clean energy targets.

“We expect the combination of lower costs for solar and favorable policy support providing a multi-year runway for utility-scale to drive meaningful upside to the market,” the U.S. investment bank said in a research note.

Goldman said it expected utility-scale solar installations globally to reach to 108 gigawatts (GW) in 2019, up 12 percent on the previous year, and then grow by another 10 percent in 2020 to 119 GW.

For 2021 and 2022 the bank expected capacity to reach 129 GW and 135 GW.

Utility-scale solar is defined as an installation that is designed solely to feed electricity into a grid, unlike smaller scale residential solar units.

Including residential installations, most analysts expect global solar power capacity to soon hit 600 GW.

“We anticipate some of the strongest growth to materialize in key regions such as the U.S., Europe, and the Middle East while we see some potential upside emerging in China where demand appears to have stabilized in recent months following a collapse through the latter part of 2018,” it added.

Solar power has been booming not just because of government and corporate sustainability targets, but also thanks to a sharp drop in panel prices in recent years.

Solar panel costs have plummeted from around $70 per watt of electricity generated in 1980, to $0.36 per watt currently in the United States, according to energy consultancy Wood Mackenzie.

Thanks to the solar boom, Goldman said it was “selectively constructive” on solar companies, with First Solar, Canadian Solar, Vivint Solar, Longi Green Energy Technology and Tongwei expected to perform well.