Why 4 terawatts of annual PV installations in 2030 are possible

Compund annual growth rates of global PV installations 1975 - 2023
Both the long-term and the latest four-year average growth rates of global PV installations lie above 36% – Chart: Bernreuter Research

Last December Switzerland-based Dr. Dahlmeier Financial Risk Management AG published a photovoltaic (PV) demand scenario leading to annual installations of a staggering 3.8 terawatts in 2030. Bernreuter Research has now shown that such a scenario is plausible.

Conventional wisdom in the PV industry has it that annual PV installations will reach around 1 terawatt (TW = 1,000 gigawatts) worldwide in 2030. At the Intersolar Europe trade fair in May 2022, leading Chinese solar module supplier Longi presented such a projection; the 2022 results presentation from Chinese polysilicon manufacturer GCL Technology predicted 1.5 TW; a group of more than 50 PV scientists postulated a similar target in an article published in Science magazine in April 2023; and the latest scenario from market researcher Bloomberg New Energy Finance (BloombergNEF) arrives at only 880 GW in 2030.

Very few voices  – for instance, Radovan Kopecek, co-founder and director of the International Solar Energy Research Center Konstanz – have been saying that PV will enter the terawatt age as early as 2027.

In the scenario published by Dr. Dahlmeier Financial Risk Management AG, however, annual PV installations exceed 1 TW already in 2026, based on a compound annual growth rate (CAGR) of 36%. For comparison: The scenario from BloombergNEF entails a CAGR of only 10.4%; the group of PV scientists regards a CAGR of 25% as necessary to reach climate targets. In contrast, CEO Uwe Dahlmeier argues that a historical PV growth rate of 36% is almost universally found in literature.

Historical growth rates support a 4 TW scenario, but supply bottlenecks pose risks

An analysis shows that PV’s CAGR indeed averaged at 36.6% over almost half a century from 1975 through 2022 (see chart above); this analysis was presented by Johannes Bernreuter, Head of Bernreuter Research, at the PV CellTech Conference Europe in Frankfurt/Main on March 12. Even in PV’s weakest growth phase between 1984 and 1996 (after the oil crisis abated and solar incentives were scrapped), it reached a CAGR of 15%, which makes BloombergNEF’s scenario worthless.

After another period with a lower CAGR of 19.5% between 2012 and 2019, PV rebounded to an average CAGR of almost 40% in the last four years. And that has a reason: Solar has become the lowest-cost option of all electricity sources – renewable and conventional alike. Therefore, it is unlikely that PV will enter a new weak demand phase anytime soon. Both the long-term and the latest four-year CAGRs support the underlying assumption of Dahlmeier’s 3.8 TW scenario for 2030.

However, there is one caveat: The rapid PV growth could cause new supply bottlenecks. As analyzed in the Polysilicon Market Outlook 2027, the limited global reserves of high-quality quartz for making metallurgical-grade silicon (silicon metal), the feedstock of PV’s base material polysilicon, will pose a major challenge by the end of this decade. So be prepared for a bumpy ride.

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