U.S. Markets closed

Renewable power generation to jump 50 per cent in five years - but it's still not enough, says report

Ben Chapman
Getty Images

Power generation from renewable sources is set to jump 50 per cent over the next five years, helped by a sharp increase in the number of solar panels on buildings, according to a report.

The International Energy Agency (IEA) forecasts that an extra 1,200 gigawatts of renewable energy will be added globally by 2024 – equivalent to the current total power-generating capacity of the United States.

However, it warned that the expansion remains well below what is needed to meet global sustainable energy targets.

The report predicts that cost reductions and “concerted government efforts” will drive the increase in solar photovoltaic (PV) systems, which will account for 60 per cent of additional renewable capacity.

“Renewables are already the world's second-largest source of electricity, but their deployment still needs to accelerate if we are to achieve long-term climate, air quality and energy access goals,” said Dr Fatih Birol, the IEA’s executive director.

“As costs continue to fall, we have a growing incentive to ramp up the deployment of solar PV.”

The IEA’s study focuses on so-called distributed PV – solar panels placed on homes, offices and other buildings rather than in large-scale, purpose-built sites.

This will account for half of additional solar capacity created in the next five years, the IEA said.

Three-quarters of new distributed PV is to come from installations on industrial buildings, in part because economies of scale allow for bigger savings on electricity bills than homeowners can expect when they install a small number of solar panels.

The cost of generating electricity from distributed solar PV systems is already below retail electricity prices in most countries and the IEA forecasts a further 15 per cent to 35 per cent drop by 2024.

However, the report’s authors warned policymakers that retail electricity tariffs must be reformed to attract more investment in distributed PV while sharing costs fairly among consumers.

“Distributed PV’s potential is breathtaking, but its development needs to be well-managed to balance the different interests of PV system owners, other consumers and energy and distribution companies,” Dr Birol said.

“The IEA is ready to advise governments on what is needed to take full advantage of this rapidly emerging technology without jeopardising electricity security.”