EIA: India to lead global installed solar capacity by 2050

While the EIA notes that its forecasts do not take into account the possible passing of significant legislation or regulation, such as the Inflation Reduction Act, which has had such a profound impact on the US energy sector, the report remains a very useful tool to help consider how the solar sector is likely to change in the coming years.

India to dominate the solar sector

Perhaps the most striking conclusion from the report is that, by 2050, the EIA expects the global solar sector to be dominated not by current industry heavyweights China and the US, but India. These figures are taken from the EIA’s “reference” scenario, a forecast established for use in its Annual Energy Outlook series of documents, and one the EIA acknowledges is not “the most probable prediction of the future but rather as a baseline for estimating the effects of policy or technology changes”.

This scenario is, therefore, a useful benchmark from which to start forecasting and analysis, and the report’s authors expect India to be the only country to install more than 1TW of solar capacity by 2050, with a total installed capacity of 1.1TW, more than double the 468GW installed in Europe and Eurasia.

Solar is also set to dominate India’s domestic energy mix, with IEA figures suggesting that the country’s installed solar capacity will grow by an annual average of 11.3% between 2022 and 2050, more than the growth in any other country profiled. This compares to an 11.4% average annual decline in the production of liquid fuels in the country, suggesting that India will not only invest heavily in solar capacity in the coming decades, but that this could draw investment away from its historically productive oil and gas sector.

Across all of the countries profiled, solar is expected to grow at an impressive rate. In Africa, installed solar capacity grew by an annual average of 8.5%, the joint-largest rate of growth in the continent, alongside geothermal power. However, with the African solar sector expected to have a total installed capacity of 140GW by 2050, compared to 8GW in the geothermal sector, it is clear that solar power will have a larger impact on the African energy mix in the coming decades.

Similarly, Europe and Eurasia and the US saw their respective solar sectors post the second-largest annual average rate of growth, behind geothermal power and battery storage capacity, respectively, suggesting that solar is an attractive investment option for a number of regions, despite different priorities for new energy infrastructure investments.

India’s forecast capacity will also account for more than one-eighth of the world’s installed solar capacity by 2050 according to the EIA. This transition also suggests that the world’s installed solar capacity will be less centralised than is the case currently. The EIA notes that, in 2022, China accounted for 420GW of the 1.4TW installed globally, making China single-handedly responsible for almost one-third of the world’s installed solar capacity.

Solar to flourish in a low zero-carbon cost case

The report also makes forecasts based on two different cost scenarios for the energy transition until 2050, one in which decarbonising the world’s energy mix is more expensive, and so innovations and investments in renewable power is less likely, and one in which the inverse is true.

This is particularly significant in the solar sector, where developers and manufacturers are constantly investing in new technologies and manufacturing process to drive up the conversion efficiency of solar modules. As a result, significant financial investment is likely necessary to the continued growth of the global solar sector, and ensuring that new solar research and deployment can be conducted in a cost-effective manner will likely be a prerequisite for expansion in the sector.

The EIA reports that, in the low zero-carbon cost case scenario, the global solar sector could see 5.9TW of capacity installed, compared to just 3.3TW in the high zero-carbon cost case scenario. Perhaps the most striking change is in the US, which is expected to contribute 550GW of capacity in the high-cost scenario, and 1.2TW in the low-cost scenario. This change would equate to a more than doubling of installed US solar capacity, and would see the US responsible for around one-fifth of the world’s installed capacity.

Other significant impacts will be felt in Africa and India, where installed capacity is forecast to increase from 93GW to 235GW in Africa, and 877GW to 1.4TW in India, from the high-cost scenario to the low-cost scenario. China, meanwhile, will see its contribution to the global solar sector relatively unchanged in both scenarios, with its capacity of 847GW in the high-cost scenario, and capacity of 1.5TW in the low-cost scenario, both accounting for around one-quarter of the world’s total installed solar capacity.

Perhaps most encouragingly for the energy transition as a whole, the expected growth in the low-cost scenario will also lead to a reduction in installed fossil fuel capacity. The fossil fuels sector is expected to contribute 5.4TW of capacity in the high-cost scenario, which falls by around one-third to 3.7TW in the low-cost scenario, suggesting that, as is expected to happen in India, the expansion of the solar sector could see funds and attention diverted from legacy forms of electricity generation.

“Renewables become an increasingly cost-competitive source of electricity and grow the fastest in cases that assume high economic growth and greater electricity demand,” said EIA Administrator Joe DeCarolis in a statement accompanying the report. DeCarolis also commented on the importance of investment into battery storage as part of this transition, with the need to develop effective storage solutions an integral part of the clean energy transition in Italy and the US.

“In 2022, battery storage accounted for less than 1% of global power capacity,” continued DeCarolis. “EIA projects that battery storage capacity will grow to make up between 4% and 9% of global power capacity by 2050.”