Plants grow through an array of solar panels in Fort Lauderdale, Florida, U.S., May 6, 2022. REUTERS/Brian Snyder
MANILA, Philippines — Solar power will likely become the top choice in renewable energy development globally by the end of the year as installation costs pull up the prices of other technologies, according to an international think tank.
A report by Fitch Solutions, through its BMI unit, projected global renewable energy capacity to expand by around 380 gigawatts (GW) this year, with more than 70 percent coming from solar-powered facilities. Twenty-one percent will come from onshore wind, while offshore wind will contribute 3 percent.
“We further highlight that the wind power sector still faces challenges to expansion currently, coming from its growing demand for metals, which will expose the industry to price volatility and supply risks,” Fitch said.
While governments across the globe are still looking at natural gas as a potential resource for energy transition, Fitch noted that this exposes consumers to higher electricity prices.
Risk of exposure
In the Philippines, for example, the Department of Energy has proposed a circular outlining the policy framework for liquefied natural gas (LNG) development.
This suggests, among others, that distribution utilities source a certain percentage of their electricity requirements from LNG facilities.
However, various groups and stakeholders have warned that the Philippines still needs to import LNG supply, thus increasing the risk of exposure to higher prices.
Fitch pointed out that this was among the reasons why consumer interest in renewable power systems had increased over the past months, particularly rooftop solar systems.
“Rooftop solar installation schemes that were started in the past few years have resulted in distributed solar capacity expanding strongly in 2023,” the think tank said, adding that this was aided by lower installation costs.