Can solar energy dominate the global power landscape? Recently, the rate of solar power installation has increased dramatically, with capacity doubling between 2022 and 2024, now providing 7% of global electricity. What are the future projections?

In the first half of 2025, solar and wind energy reached historic milestones by surpassing coal in electricity generation for the first time, making renewables the leading electricity source worldwide. According to the UK-based think tank Ember, solar power has been the primary contributor to this pivotal shift in the energy landscape, accounting for 83% of the surge in global electricity demand this year. Ember’s analysis shows that solar has been the largest new power source for three consecutive years.

What’s the advantage of solar? Its affordability! Installation costs for solar systems have plummeted by 90% over the past 15 years, making solar energy the most economical electricity source globally. “Currently, silicon panels are on par with the cost of plywood,” remarks Sam Stranks, from Cambridge University.

This translates to abundant, cost-effective energy solutions that can be implemented almost anywhere. Is it unrealistic to envision a future where solar energy powers everything?

On a fundamental level, Earth receives almost limitless solar energy. Even with current panel efficiencies, roughly 450,000 square kilometers would be needed to meet the entire world’s energy demands using solar power, as estimated by a 2021 report from the British think tank “Carbon Tracker.” This represents just 0.3% of global land area.

Kingsmill Bond, one of the report’s authors now working with Ember, noted that while land usage trade-offs exist—like competition with agriculture—”there’s ample space for most nations to adopt these technologies.”

Next-Gen Solar Panels

The question is, what hinders solar energy from fully dominating the global electricity market? Efficiency is the foremost challenge. Photovoltaic panels primarily made of silicon convert about 20% of solar energy into electricity. In contrast, hydroelectric power plants convert 90%, wind turbines around 50%, and fossil fuel plants 30-40%.

This disparity necessitates more solar panels to equate to the output of other energy sources. Therefore, companies and researchers are eager to enhance solar panel efficiency, hoping the improvements will concurrently reduce costs and land requirements.

However, crystalline silicon panels are approaching efficiency limits, with top-tier cells currently achieving around 25% efficiency. “The practical ceiling for crystalline silicon is likely around 28%,” explains Jenny Nelson from Imperial College London.

Further efficiency improvements may require a transition to tandem solar cells, which utilize an additional semiconductor to better harness the solar spectrum. Tandem silicon perovskite cells are considered the most promising, with a theoretical efficiency limit near 50%. Although real-world tandem panels haven’t reached that potential, Stranks anticipates efficiencies between 35% and 37%.

The first tandem silicon perovskite solar panels have commenced commercial production. They are now undergoing industry tests to assess their real-world operational longevity. Stranks is optimistic, projecting they will become the market’s leading technology in a decade. “On the surface, they appear similar to current panels, but they generate 50% more power,” he states. “That’s a significant advancement.”

Efficiency enhancements could not only cut costs further but also foster new application opportunities, such as solar roofs on electric vehicles that can charge batteries during the day. This stored energy could then be utilized for transportation or domestic use after sunset, he adds.

Solving Storage Issues

Innovations like these could mitigate one of solar power’s primary challenges: variability. The sun isn’t always shining, which poses less of an issue in Sunbelt countries like India, Mexico, and parts of Africa, where sunlight is almost year-round, enabling surplus energy during the day to be stored for nighttime use. This solar and storage model is becoming more affordable, with lithium-ion battery costs declining 40% in the past two years, according to BloombergNEF.

“Ultimately, fossil fuels’ only edge over solar is their storage capabilities,” Bond points out. “However, this issue is mostly resolved through advancements in battery technology.”

In northern regions, where winter days are short and overcast, the scenario is different. “[Solar] serves as an incredibly effective energy source, producing zero pollution with a rapid energy investment return. It ticks all the right boxes,” comments Andrew Blakers from the Australian National University. “Unless you reside in northern Europe, northeast Asia, or the northeastern United States—where you have abundant summer sun but limited winter light—[solar] is distinctly superior.”

For areas experiencing long winter nights, wind energy can bridge the gap, but we must also develop energy storage solutions capable of holding power for extended periods. Such “seasonal storage” technology is still emerging, with only a few solutions at commercial scales. However, methods like pumped water, hydrogen, and compressed air storage show promise. “In the short term, batteries will suffice for now, while pumped hydro storage will take over in the long run,” predicts Blakers.

Political Challenges

If anything, enhancing efficiency and storage represents low-hanging fruit. “The bottlenecks are likely political, with inconsistencies in policy, regulatory challenges, and vested interests from other industries,” says Nelson.

The Trump administration in the U.S., known for its climate change skepticism, epitomizes this issue. Recently, federal authorities halted a massive solar project in Nevada that was set to be the world’s largest, continuing a trend of reducing solar funding and obstructing initiatives.

Yet, Bond is confident the shift to renewable energy is nearly inevitable, given its economic advantages over conventional power sources. “While certain companies may slow the solar tide in specific countries or projects, the current U.S. government is inadvertently jeopardizing the nation’s position in the global race for advanced technology deployment,” he asserts.

Blakers concurs, emphasizing that solar energy might be the solution to the rapidly increasing energy demands from AI data centers. “Even in the U.S., with a determined federal approach, it’s hard to envision solar moving backward since many states favor solar, and it’s by far the most expedient method to procure substantial energy,” he notes.

Another significant obstacle for clean energy is logistics. Existing power grids will need rewiring to accommodate large and varying energy supplies from new regions. A more adaptable grid that manages generation spikes and fine-tunes electricity demand will optimize green electricity usage. However, achieving these advanced power grids will incur substantial costs. In the UK alone, energy firms plan to invest £77 billion over the next five years to upgrade the electricity grid for wind and solar integration.

In low-income countries with less developed electricity grids, there’s an opportunity to expediently establish renewable-friendly infrastructures from scratch, facilitating deeper penetration of renewables into their grid supply. Currently, the BRICS nations (Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, South Africa, and the United Arab Emirates) together produce more than half of the world’s solar power generation, according to Ember.

The broader challenge for many nations is to electrify a larger share of their energy needs—covering heating, transportation, and more—which is crucial for decreasing fossil fuel reliance throughout the global economy. “To decarbonize our planet, electrification is a priority,” Nelson emphasizes. Low-income countries are currently leading the charge against wealthier ones, with China’s portion of electricity in final energy consumption set to hit 32% in 2023, far eclipsing the 24% electrification rate of the United States and affluent European nations, as noted by Ember.

What Lies Ahead for Solar?

Despite the year’s achievements, the technical, logistical, and political hurdles mentioned could hinder solar PV adoption in some regions in the short term. The International Energy Agency announced that renewable electricity is set to more than double by the end of 2030, yet it might not meet the target of tripling capacity by that time. The agency identified changes in U.S. policy and challenges related to grid integration as resisting factors against expanding renewable capacity.

However, energy market analysts remain optimistic that solar power will lead the global energy supply by mid-century. “By century’s end, it’s clear that all our electricity will derive from renewable sources, primarily solar,” asserts Bond, who forecasts that solar energy could account for up to 80% of the world’s electricity supply by 2100. Additionally, he expects that a minimum of 80% of the total global energy needs will be electrified.

All political, storage, and infrastructure barriers will eventually fade, paving the way for a green power revolution. “Human ingenuity drives us to convert energy into resources,” Bond concludes. “Now that we have discovered this affordable and universal energy source, it’s only a matter of time before we harness it.”