The solar industry has grown in fits and starts since the early 1970s, but its recent ascent has all but cemented it as a major energy technology for the future. In the short and medium term, the future of solar is brightest for installation companies, which are benefitting from low module prices, cheap capital, and abundant new mar­kets. The manufacturing market will remain depressed as the oversupply of panels comes down.

China will play a pivotal role in the future of solar energy and is likely to become the dominant market driver of the industry. It has already eclipsed the United States as the top investment market for solar, but the most important trends are whether it will continue its aggressive shift away from production or towards installation.

China should make efforts towards building a more balanced and sustainable market for solar products, if for no other reason than to protect its investments in the industry. After years of massive subsidies, the Chinese solar production engine has become the market leader but is also significantly oversupplying the market with panels. China, with its immense scale, intense energy requirements, and ability to green-light projects quicker than most countries, could swallow the entire oversupply in a single gulp.

The results of such a movement would be mixed at first. As supply dwindled, prices would rise in the short term, putting pressure on installers in Europe and America. However, the scale of the market would increase to a point where pricing would become both low and sustainable.

Manufacturers would see profits return. This would spur more production innova­tion and efficiency. It would also mark the return of R&D and further technological innovations to develop the next generation of solar systems.

Policy support will need to remain constant during the transition. In the United States in particular, a continuation of the 30% consumer tax credit, expansion of FiT laws and third-party leases, and continued R&D funding will be critical to maintain the market in flux. In Europe, moving from austerity – to growth-driven policies will be important as that bloc reaches saturation of its solar markets.

Policies will become easier to enact over time, as the shift in public opinion that is underway is both growing in momentum and getting older. In the developed world, and particularly in the United States, political views are still important regard­ing the perception of clean energy, but much less so in the past. Climate deniers are seen increasingly as outcasts, and the younger generation of Americans tends to bal­ance profits with environmental protection with a longer view in mind.

Without any major setbacks, solar is primed to compete with other energy sources. As their prices rise as supply of fossil fuels dwindle in the face of increas­ing demand, the price of solar modules continues to fall. And the fuel is forever free. Given current trends, price parity, and then subsidy-free price parity will come sooner than most expect, sometime between 2015 and 2025.

Solar Energy Markets. DOI: http://dx. doi. org/10.1016/B978-0-12-397174-6.00010-6

© 2014 Elsevier Inc. All rights reserved.

At these prices, solar systems, particularly PV systems, will dot the landscapes and rooftops of areas with strong solar resources. Jobs will be created by the tens of thousands in the United States, which will be important to offset the continuing declines of the coal industry. Solid, middle-class jobs in manufacturing, construc­tion, sales, and engineering will proliferate in the Middle East, India, and throughout Asia. Massive amounts of CO2 will be diverted.

As solar power enters the mainstream, the energy future of many nations hangs in the balance. This future increasingly appears clear and bright, and while solar energy will not become a predominant source in the near term, its importance as a supple­mental and incremental component will only increase over time.