Solar power will become a viable alternative to fossil fuels – ahead of coal, hydro and nuclear – within a decade, says the International Energy Agency.
And by 2050, solar will be the world’s largest source of electricity, said the Paris-based agency, which is better known to business for its oil price forecasts.
The economics of the switch will drive a $44-trillion investment boom, a staggering sum compared to the $900 billion a year pumped into fossil fuels at present.
The pair of reports, Technology Roadmap: Solar Photovoltaic Energy and Technology Roadmap: Solar Thermal Electricity, are not forecasts, the agency stressed, but descriptions of "expected technology improvement targets" and the policies needed to reach "priority actions and milestones".
Nevertheless, the IEA reports are the most credible look yet at the rise of solar power, though green activists have been reporting successes in isolated countries, usually with the help of state subsidies or favourable regulatory regimes.
The IEA said the cost of photovoltaic panels will fall another 60 per cent for domestic use and 70 per cent for power companies, on top of dramatic efficiency gains in recent years.
Since 2008 the installed cost of solar has tumbled by four-fifths from $4 a watt to $0.80.
These lower costs will be magnified by rising prices for carbon-based fuels.
“The take-off is around 2025 to 2030,” the agency said. “By then the cost of solar will be $100 per megawatt hour (MWh) and will compete with fuels facing carbon prices of $50 a tonne.”
By 2050, the cost of carbon will have risen to $150 per tonne, assuming world leaders get to grips with global warming, it said.
Major governments agreed at the climate summit in New York last week to sign a treaty next year to cut greenhouse gases. China is working on its own carbon pricing scheme and has been adding solar capacity five years earlier than previously expected.
The world will have 200 gigawatts of solar capacity next year, but by 2025 will be adding that much annually, the IEA said.
The solar revolution will involve both photovoltaic cells and solar-thermal generation, in which sunlight is focused on to receivers, where it raises the temperature of fluids to drive conventional turbines.
Maria van der Hoeven, the agency's executive director, said the switch will be capital intensive. “Almost all expenditures are made upfront. Lowering the cost of capital is thus of primary importance.”
As with mobile phones, solar is expected to leapfrog older technologies in developing countries to serve 1.3 billion people who are currently off-grid.
The IAE’s reports do not take into account any improvements in battery performance, although increased efficiency and reduced costs in that field is expected to help even out the supply of electricity at night and on overcast days.
The IEA was set up by the OECD after the 1973 oil price shocks.
