Solar Power

Solar resources are available in every country and both solar photovoltaic (PV) and concentrating solar power (CSP) technologies can be used to convert this solar resource into electricity. Solar PV can use both direct and diffuse sunlight to create power, while CSP relies on direct sunlight, somewhat restricting its deployment to areas with high direct normal irradiance (DNI). Solar PV deployment reached 291 GW at the end of 2016, while deployment of CSP is still in its infancy at 5 GW.

The rapid deployment of solar PV, working in combination with high learning rates (for every doubling of cumulative installed capacity PV module costs decline by 20–22%) has led to dramatic cost declines in the last 10 years. Crystalline silicon (c-Si) PV module prices have fallen by more than 80% since 2010, driving reductions in installed costs. Utility-scale solar PV projects can now provide electricity that is competitive with other grid supply options, without financial support. In 2016 and 2017, new records for low-cost solar power purchase agreements were set in Chile, Mexico, Peru and the UAE.

Concentrating solar power (CSP) plants are only just beginning to be deployed at scale. The first CSP systems in relatively widespread use are parabolic trough and solar towers, but Stirling dish and linear Fresnel systems are also available. Although current costs are high due to the low levels of deployment, cost reduction potential is good and the ability to incorporate low-cost thermal energy storage will make them more important as the share of variable renewables in total power generation rises. The average LCOE of CSP tower plants could fall to around USD 0.09/kWh by 2025.