A report from Bloomberg New Energy Finance forecasts a $2.2 trillion global boom in small-scale solar to 2040 – and in Australia, a massive amount of battery storage will be installed.
According to the New Energy Outlook 2015, ongoing reductions in solar PV costs will see a USD $3.7 trillion surge in investment in large and small-scale solar.
BNEF expects small-scale solar jump from 104GW in 2014 to nearly 1.8TW in 2040 globally, a 17-fold increase, thanks to a 47% drop in the cost of solar power systems per megawatt.
Small rooftop installations of solar panels will reach socket parity in all major economies and by 2040, just under 13% of global generating capacity will be small-scale PV. Socket parity is a scenario where the levelized cost of electricity (LCoE) is equal to or less than the price of purchasing power from mains grid.
Globally, the world’s power-generating mix will look quite different in 2040, with 56% from zero emissions sources. Renewables will comprise just under 60% of the 9,786GW of new generating capacity added.
Solar will make up 35% (3,429GW) of renewable capacity additions and nearly a third of global investment bucks, split evenly between small and utility scale.
Around 882GW of renewables will be added in OECD countries over the next 25 years (predominantly small scale solar). Developing non-OECD countries will build 287GW of capacity annually to satisfy demand, with around half of the 7,450 GW total by 2040 being renewables.
The Asia Pacific region will lead the world in renewables uptake – for every 1GW of new build in the Americas, 3.4GW will be installed in APAC.
“Up to now, small-scale solar investment has been dominated by wealthy countries such as Germany, the US and Japan. By 2040, developing economies will have spent $1 trillion on small PV systems, in many cases bringing electricity for the first time to remote villages,” said Jenny Chase, chief solar analyst at Bloomberg New Energy Finance.
For Australia specifically, BNEF predicts more than half of Australia’s generating capacity will be located behind the meter by 2040, with 37GW of small-scale solar PV and 33GW of battery storage installed by then.
Prime Minister Tony Abbott and Joe Hockey’s favourite renewables technology, onshore wind power, is predicted by BNEF to reach 1.8TW globally by 2040; five times current levels. Offshore wind will reach 198GW, up 25-fold.
It’s a fairly rosy sort of picture, but BNEF points out that due to the availability of easily accessible fossil fuel resources and the long life of coal plants, energy related carbon emissions will still rise by 13% over 2014 levels by 2040.
BNEF’s analysis assumes renewables globally will see no additional policy support from 2018 onwards, except for offshore wind; where subsidies will end in 2030. It also assumes carbon prices continue where they are already in place or where the BNEF team have some confidence in their emergence.
