Solar’s growth stumbles just as the world needs it most

Cracks are emerging in the global solar industry, threatening to flatten its growth trajectory just as the world needs clean power more than ever.

Cracks are emerging in the global solar industry, threatening to flatten its growth trajectory just as the world needs clean power more than ever.

The sector is being slammed by a barrage of obstacles, with rising materials costs, forced labor accusations and a worsening trade war all hitting at once. As a result, panel prices are rising for the first time in years, and some manufacturers have asked buyers to delay purchases if they can. And although annual installations are still ticking higher, Wall Street warns the pace of expansion may slow sharply if those hurdles continue unchecked. 

“The shocks to the system in the last two to three months are more or less unprecedented,” said Jenny Chase, an analyst with BloombergNEF. “We need to get to net zero as soon as possible, and to do that we just need so much solar and wind. We’re not on track; we need to ramp all this stuff up dramatically.”

These setbacks may only be temporary, with delays in installations expected to be largely resolved by the end of 2022 when new solar factories help ease supply chain issues. But any snag in the sector’s rollout will have lasting effects, with the emissions from the fossil fuels burned instead trapping heat in the atmosphere for decades. Solar provided just 3.3 per cent of the world’s electricity in 2020. BloombergNEF estimates that to be on target for net-zero by 2050, the world needs to add 455 gigawatts of solar every year through 2030. Last year was a record—and it only added 144 gigawatts. The recent stumbles are hitting right before the United Nations’ COP26 climate talks begin later this month, viewed by many as a crucial—and last-ditch—effort to curb global warming. 

It was easy to be optimistic about solar coming into the year. Joe Biden’s ascendance to the presidency, China’s 2060 net-zero pledge and Europe’s Green Deal meant that for the first time, all three dominant economies supported an energy transition at the same time. And thanks to decades of painstaking work by researchers and companies, solar can now produce energy cheaper than fossil fuels in most of the world. Even the technology’s Achilles’ heel—the sun doesn’t always shine—was on the way to being solved by improvements in batteries.