A new report by analyst firm Frost & Sullivan projects that in 2017 solar PV will attract more investment than coal, gas and nuclear power combined.
The report, titled the Global Power Industry Outlook 2017, examines power market trends, including investment and regional growth. The report deduces that this year, renewable power investment will reach $243.1 billion globally, with solar PV investment comprising $141.6 billion of that total, followed by wind.
Although solar prices continue to decline, as does the cost of wind power, renewable investment is booming at the expense of traditional power generation because clean energy increasingly offers more profitable project costs and benefits from stable regulatory support across the globe, the report finds.
By 2020, say the analysts, non-hydro renewable energies will account for 65% of all power generation investment, led by the strong backing for solar found in India, China and other emerging economies and markets. India alone will see clean energy investment grow by 24% per year until 2020, the report finds.
And as the markets evolve and expand, power sector participants will be compelled to “craft innovative business models, offer customer-centric solutions, and create flexible portfolios” – something that the solar industry in particular has witnessed in the past few years.
Frost & Sullivan energy & environmental principal consultant Jonathan Robinson said: “As new geographies emerge, local legislation and pro-renewable incentives will impact the fuel mix, compelling industry participants to identify challenges and define localization strategies for long-term growth.
“As the renewable and distributed energy markets mature, a large installed capacity of equipment that needs servicing will also offer the O&M sector attractive growth prospects.”
In Europe, renewable technologies will attract 73.4% of power generation investment this year. Globally, coal capacity will increase in 2017 but investment is firmly on a downward trend, said the report. Utilities around the world are also increasing their demand for energy management solution on both the supply and demand side – an area in which, again, solar is a particularly major player.
“Digitization has the potential to drive efficiency gains and unlock new revenue streams for market participants in business areas such as demand response, utility as an energy service company, predictive and real-time analytics, vehicle-to-grid, and virtual power plants and microgrids,” added Robinson. “However, implementation will take time and significant investment.”