2023 Predictions for the Solar Energy Industry
The future of solar energy is bright! With energy prices expected to remain at historic highs throughout 2023, it’s no wonder that renewable and sustainable forms of energy – led by solar – are gaining momentum. In fact, it is expected that global solar power generation will surpass a terawatt by the end of 2023.
Are we enthusiastic about what’s ahead in the solar industry? You bet! And the future is getting even brighter.
We asked a few of our experts what they see in store for the solar energy market in the coming year and here are their predictions.
Frank Bakker/ Frank Bakker, Group Product Manager of Smart Energy
2023 will be a year of explosive growth in the residential energy management ecosystem as we see energy markets changing more than ever before, and the dynamic pricing of energy gaining momentum. We are seeing a continued movement of more homeowners migrating toward variable energy contracts. Energy companies are expected to introduce more variable energy tariffs with larger differences in rates to incentivize homeowners to make the move. People want to make their money work for them, and this is a great way to do that. By adding battery storage to their existing home energy management system, homeowners can be much more flexible.
The demand for energy is also growing by leaps and bounds and this is causing more outages and overall grid instability as grid operators struggle to cope with peak hours of energy consumption. Moreover, the explosion of EV charging coupled with infrastructures that are not built to support the ever-growing high electricity consumption will lead to even more power uncertainty. And with homeowners moving away from fossil fuels and towards full electrification in markets like Europe and North America, we are expecting to see the demand for home solar energy going through the roof.
With so much market volatility, what homeowners really want is peace of mind. They are more determined than ever to gain control of their energy needs, usage, and electricity costs. In order to do this cheaply and effectively, they are increasingly looking towards the sun.
Oded Sagee/ VP of Product Storage
The world is facing various large-scale challenges that will define the availability and cost of traditional and renewable sources of energy. As the trajectory of energy storage solutions (e.g. lithium-ion batteries) moves towards commoditization, two factors are creating space in the market for differentiated solutions.
First, I anticipate that government regulations in the form of financial incentives, strategic planning to meet energy independence, and migration to sustainability will intensify and open the door for more use cases that are not mainstream today. The second factor revolves around market dynamics. So far, the EV market has been, and for the foreseeable future will be, the main driver of energy storage specifications and scale. This “forces” stationary applications to conform to EV-based solutions, and as long as the cost makes sense, take advantage of those solutions. When costs of lithium-ion batteries are high, as we have seen in the past two years, the need for new solutions (“non-lithium”), or at least a better understanding of use cases and new approaches to extract better value from lithium batteries, will emerge. We believe the groundwork has been set and the race for differentiated stationary storage solutions has begun.
This is the time for customers of stationary energy storage to become more familiar with how energy storage works and how to take advantage of it. Customers need to better understand how they use and pay for energy today, what the current and future regulations are, and how they may or may not change with the use of renewable energy and storage solutions (coupled or not).
And finally, it’s time for the market and the industry to engage in deeper discussions on how to better take advantage of energy storage solutions to improve energy costs, resiliency, and sustainability. I believe that in the next 5-10 years, such discussions will yield new and differentiated stationary solutions that ride on commoditized or semi-commoditized technologies, but provide greater value by taking advantage of either hardware or software adjustments to meet new emerging use cases that go beyond uniformity and mainstream.
Julie Horn/ Business Development Manager, Future Technologies
With solar steadily becoming the most economically viable renewable energy technology, 2023 is the year solar will boom. Availability will rise as supply chain issues fade. Pressed by ESG (environmental, social and governance) commitments, and supported by cross-border policy and incentives, corporates will significantly push the limits of what we thought was possible, combining solutions from different disciplines to achieve their net zero goals. They are motivated by the understanding that sustainability is a driver for company growth with regard to cost mitigation and even opportunities for revenues.
Corporates are leading the game with many already offering EV charging to their employees and customers. This will make a significant impact on daytime charging, load management, and network stabilization, and there will be closer cooperation with utilities to optimize the grid.
Some companies are even looking toward V2G (Vehicle-to-Grid) functionality, using corporate cars as storage devices to help balance out electricity demand, enhance grid stabilization and provide a reliable power source during power outages.
Digitalization is the key to this transition. The energy network is evolving from a centralized topology to a distributed one. Data and software will be central in enabling this transformation.
Corporates will not only push solar adoption through local generation and corporate PPAs (power purchase agreements) but also be involved in developing advanced digital solutions, optimizing smart loads, and integrating with the mobility ecosystem to create a new energy ecosystem composed of communities and advanced microgrids.
Pavel Gilman/ Senior Director Sales and Project Management
Energy transformation and e-mobility are probably the most booming industries around these days. In the last few years, the automotive industry has been focused on the electrification of mass-production vehicles, such as passenger cars and light commercial vehicles. The question is no longer whether mobility will be electrified, but how quickly it will penetrate the market. To continue and accelerate this growth, the next evolution will be to provide holistic solutions for consumers and businesses which will ensure the scalability of e-mobility, as well as extend the target market to customers with special needs.
It will no longer be sufficient just to sell electric vehicles. It is well known that the energy for charging from the grid is not necessarily as green as we would like, and those costs have risen dramatically in 2022. Along with the vehicle itself, customers want to buy a solution for charging it which uses green energy and costs less. Solar energy systems solve both challenges and it is logical that a combined offering of the electric vehicle and the photovoltaic solution will provide a competitive edge to whoever can offer it.
Nevertheless, with car manufacturers strictly focused on mass market production, the demands of niche industries that have special requirements such as food delivery services which require cooling or heating, or emergency construction services, are largely disregarded. Many of them have the need for electrification as well, mainly due to regulations such as the limitation of carbon in urban areas, and compliance with ESG guidelines. Most challenging, however, is to provide the solution to uninterrupted vehicle operating time and range. This challenge will be addressed by smart solutions from providers with in-house capabilities for complete e-powertrain and not necessarily from the traditional automotive players.
Roy Weidberg/ Head of ESG
We are likely to see a continuation of the push for decarbonization by global businesses, mainly through the accelerated transition to renewable energy. At the recent Cop27, the governments in attendance were unable to reach the necessary agreements that would limit global temperature rises to 1.5C above pre-industrial levels. However, the ever-rising pressure from investors and customers is expected to continue to push large companies to pledge their commitment to work toward a low-carbon transition.
To meet the requirements of the world’s most acknowledged carbon neutrality programs, businesses will need to search for additional ways to reduce energy consumption and to source their remaining energy needs from solar, wind, and other renewable sources. The additional funding available for renewable utilities through the generation of reliable renewable electricity certificates could continue to incentivize the increase of large-scale renewable capacity.
Cop 27 did, nevertheless, conclude with an enhanced commitment from wealthy nations to fund climate adaptation in developing countries. This funding could include subsidies for increasing renewable energy generation capacities to help meet NDCs (National Determined Contributions) for emission reductions and to possibly generate increased revenues by creating credible carbon credits for purchase by financial institutions and large companies in the developed world.