Aerial view of a solar farm with many rows of solar panels in a field.
Technical Summary

Utility-Scale Solar Photovoltaics

Project Drawdown considers utility-scale solar photovoltaics as: solar photovoltaic (PV) systems bigger than 10MW used for electricity generation. This solution replaces conventional electricity-generating technologies such as coal, oil, and natural gas power plants.

Since 2010, the photovoltaic market has grown tremendously. At least 480 gigawatts of total solar PV capacity were installed worldwide by the end of 2018, (IRENA, 2019) with each new year adding records of grid-connected capacity. In many regional markets, newly installed capacity came primarily from utility-scale installations rather than distributed solar PV panels. In many markets, the newly installed capacity is coming primarily from utility-scale installations rather than from distributed systems. As a result, ambitious projections are now being made on higher adoption of renewable energy for power generation. Some recent scenarios have even predicted almost 60% of global electricity generation to come from solar energy by 2050.

Methodology

To capture the appropriate level of agency, the solar PV market was split between distributed solar photovoltaics (representing households and building owners) and utility-scale solar photovoltaics.

Total Addressable Market[1]

Two total addressable markets were developed for this sector solutions, supported on lower and higher climate emissions mitigation targets linked to different levels of electricity demand and renewable energy sources integration. For utility scale solar photovoltaics it is based on projected global electricity generation in terawatt-hours from 2020-2050, with current adoption[2] estimated at 1.04 percent (274 terawatt-hours) of generation. With no definitive estimation of the type of future solar PV adoption, it is assumed that distributed PV installations represent around 40 percent of the market, with utility-scale solar capturing the remaining 60 percent (US DOE, 2012; IEA, 2014; SEIA, 2014).

Adoption Scenarios[3]

Impacts of increased adoption of utility scale solar PV  from 2020-2050 were generated based on two growth scenarios, which were assessed in comparison to a Reference Scenario where the solution’s market share was fixed at the current levels.

  • Scenario 1: This scenario is based on the evaluation of adoption trajectories of five ambitious adoption scenarios: IEA (2017) Energy Technology Perspectives 2DS and B2DS scenarios; IEA (2018) World Energy Outlook SDS; IRENA (2018) REmap Case scenario; and Grantham Institute and Carbon Tracker (2017) Strong PV Scenario, using a high growth trajectory.
  • Scenario 2: This scenario is are derived from three 100% RES scenarios of electricity generation by 2050, being Greenpeace (2015) Advanced Energy [R]evolution Scenario; Ram et al. (2019) scenario and Ecofys (2018) 1.5°C scenario. These scenarios represent very ambitious pathway towards a fully decarbonized energy system in 2050.

Financial Model

Based on a meta-analysis of the data collected of these systems installation costs around the world, we assume total first cost of US$1,734 per kilowatt.[4] A customized learning rate of 21.0 percent was developed, accounting for independent impact on PV modules and balance of systems; this has the effect of reducing the installation cost to US$490 per kilowatt in 2030 and to US$336 in 2050, compared to US$1,786 per kilowatt for the conventional technologies (i.e. coal, natural gas, and oil power plants). An average capacity factor of 21 percent is used for the solution, compared to 57 percent for conventional technologies. The fixed operation and maintenance costs considered for utility scale photovoltaics are US$15.94 per kilowatt compared to  US$34.7 per kilowatt for the conventional technologies.

Integration[5]

Through the process of integrating utility scale solar PV with other solutions, the total addressable markets were adjusted to account for reduced demand resulting from the growth of more energy-efficient technologies,[6] as well as increased electrification from other solutions like electric cars and high-speed rail. Grid emissions factors were calculated based on the annual mix of different electricity generating technologies over time. Emissions factors for each technology were determined through a meta-analysis of multiple sources, accounting for direct and indirect emissions.

Results

Comparing the results from the two modeled scenarios to the Reference Scenario allows us to estimate the climate and financial impacts of increased adoption of utility-scale PV systems. The Scenario 1 projects 20.3 percent (i.e. over 9,300 terawatt-hours) of total electricity generation worldwide coming from utility-scale solar by 2050. In the Scenario 2, the market share reaches 25 percent associated with 17,742 terawatt-hours of electricity generated under a higher total addressable market.

The Scenario 1 results in the avoidance of 42.3 gigatons of carbon dioxide-equivalent greenhouse gas emissions between 2020-2050, with US$3,317  billion in savings from associated net first costs. Nearly US$12 trillion of lifetime operating savings are projected, principally because utility-scale PV does not require any fuel inputs. The Scenario 2 is more ambitious in the growth of utility-scale PV technologies, with impacts on greenhouse gas emissions reductions over 2020-2050 of 119.1 gigatons of carbon dioxide-equivalent.

Discussion

Solar photovoltaic has seen unprecedented levels of growth around the world since 2005, due primarily to advancements in technology and declines in costs. Only modest advancements in production are needed before utility-scale systems are cost-competitive with fossil fuel generation around the world. As a result, utility-scale PV is likely to continue its rapid growth in many regional markets and will play an increasingly important role in future global electricity supply, regardless of climate mitigation goals. If utilities and project developers, spurred on by local and national governments, accelerate the adoption of utility-scale solar over the next 30 years, the world will reap major benefits in terms of greenhouse gas emissions reduction, as demonstrated by our results. The rapid deployment of utility-scale PV will result in significant reductions in greenhouse gas emissions (and corresponding atmospheric concentrations) by displacing emissions associated with coal and natural gas. Solar has an incredibly promising long-term potential, as solar resources are plentiful and widespread, and future advances in both battery and photovoltaic technologies should continue to drive the adoption of this technology, even without specific policy interventions. The financial benefits of rapid utility-scale PV adoption will also be considerable, and these can help jumpstart adoption. There are significant investment costs associated with accelerated adoption, but this is an opportunity to generate wealth and economic growth, as the return on investment is also substantial.

The accelerated installation of new utility-scale PV capacity will not be without challenges, however, as traditional electricity markets and grids are in many cases not primed for a high penetration of intermittent, renewable energy. There will be economic, policy, and social hurdles to overcome on the pathway set out in our scenarios, and some of these will require significant changes to the way we buy, sell, and even use electricity. But given the immense climate and financial impacts of global utility-scale PV adoption, it is imperative that we take on these challenges in order to realize the benefits.

 

[1] For more about the Total Addressable Market for the Electricity Generation Sector, click the Sector Summary: Electricity Generation Sector link below.

[2] Current adoption is defined as the amount of functional demand (i.e. TWh) supplied by the solution in 2018.

[3] To learn more about Project Drawdown’s two adoption scenarios, click the Scenarios link below. For information on Electricity Generation Sector-specific scenarios, click the Sector Summary: Electricity Generation link.

[4] All monetary values are presented in US2014$.

[5] For more on Project Drawdown’s Electricity Generation Sector integration model, click the Sector Summary: Electricity Generation link below.

[6] For example: LED lighting and high efficiency heat pumps.