Distributed Solar Photovoltaics
Project Drawdown defines as distributed solar photovoltaic (PV), systems that typically are sited on rooftops, that include both residential solar PV and community-scale solar PV systems with under 1 megawatt of capacity. This solution replaces conventional electricity-generating technologies such as coal, oil, and natural gas power plants.
In a PV system, sunlight falling on a solar cell produces electricity as a result of the phenomenon of the photoelectric effect. The solar cells deployed in such systems are typically divided into three generations. First-generation solar cells, which currently capture the majority of the market, are based on single or multi-crystalline silicon. Second-generation solar cells are thin-film solar PV cells. These come in three types: a) amorphous and micromorph silicon; b) cadmium telluride; and c) copper-indium-selenide and copper-indium-gallium-diselenide. Third-generation solar cells, such as high-concentration PV cells, dye sensitized solar cells, and organic solar cells, are still under development and are not yet fully commercialized.
Most adoption scenarios of this technology earlier predicted only a low, single-digit percentage of total electricity to be generated by all PV (including both rooftop and utility scale) by 2050. However, in view of the rapid recent adoption of this technology in many countries, the scenarios have also raised their levels of ambition. In fact some recent scenarios have even predicted that almost 60 percent of global electricity generation would come from solar PV by 2050. Such increased projections are largely based on increasing solar cell efficiencies and rapidly declining costs for PV systems that will make them competitive with conventional generating sources in many parts of the world.
To capture the appropriate level of agency, the solar PV market was split between distributed solar PV (representing households and building owners) and utility-scale solar PV. This analysis models distributed solar PV systems with under 1 megawatt of capacity.
Total Addressable Market
Two total addressable markets were developed for this sector solutions, supported on lower and higher climate emissions mitigation targets linked to different levels of electricity demand and renewable energy sources integration. For distributed solar PV it is based on projected global electricity generation in terawatt-hours from 2020 to 2050, with current adoption estimated at 0.7 percent (183 terawatt-hours) of generation. With no definitive estimation of the type of future solar PV adoption, it is assumed that distributed PV installations represent around 40 percent of the market, with utility-scale solar capturing the remaining 60 percent (US DOE, 2012; IEA, 2014; SEIA, 2014).
Impacts of increased adoption of distributed solar PV from 2020 to 2050 were generated based on two growth scenarios. These were assessed in comparison with a Reference Scenario, in which the solution’s market share was fixed at the current levels.
- Scenario 1: This scenario is based on the evaluation of yearly averages of five optimistic scenarios: IEA (2017) Energy Technology Perspectives 2DS and B2DS scenarios; IEA (2018) World Energy Outlook SDS; IRENA (2018c) REmap Case scenario; and Grantham Institute and Carbon Tracker (2017) Strong PV Scenario using, a high-growth trajectory.
- Scenario 2: This scenario is based on the yearly average values of three 100 percent RES scenarios of electricity generation by 2050: Greenpeace (2015) Advanced Energy [R]evolution Scenario, Ram et al. (2019) scenario, and Ecofys (2018) 1.5°C scenario. These scenarios represent very ambitious pathway towards a fully decarbonized energy system in 2050.
Based on a meta-analysis of the data collected of these systems installation costs around the world, it is assumed total first cost of US$2012 per kilowatt. A customized learning rate of 19.5 percent was developed, accounting for independent impact on PV modules and balance of systems; this has the effect of reducing the installation cost to US$653 per kilowatt in 2030 and to US$462 in 2050, compared with US$1786 per kilowatt for the conventional technologies (i.e., coal, natural gas, and oil power plants). An average capacity factor of 19 percent is used for the solution, compared with 57 percent for conventional technologies. Fixed operation and maintenance costs of US$21.8 per kilowatt are considered for distributed solar photovoltaic systems, compared with US$34.7 per kilowatt for the conventional technologies.
Through the process of integrating distributed solar PV with other solutions, the total addressable markets were adjusted to account for reduced demand resulting from the growth of more energy-efficient technologies, as well as increased electrification from other solutions like electric cars and high-speed rail. Grid emissions factors were calculated based on the annual mix of different electricity generating technologies over time. Emissions factors for each technology were determined through a meta-analysis of multiple sources, accounting for direct and indirect emissions.
Comparing the results from the two modeled scenarios to the Reference Scenario allows us to estimate the climate and financial impacts of increased adoption of distributed solar PV systems. Scenario 1 projects 13.5 percent of total electricity generation worldwide from distributed solar PV by 2050 (6,235 terawatt-hours). In Scenario 2, the market share of this solution reaches 14.24 percent (10106 terawatt-hours) under a higher total addressable market.
The climate and financial impacts for the accelerated adoption of distributed solar PV are both significant. Scenario 1 results in the avoidance of 28.0. gigatons of carbon dioxide–equivalent greenhouse gas emissions from 2020 to 2050, with US$479.6 billion in associated marginal first costs. Nearly US$7.9 trillion of lifetime operating savings are projected. Scenario 2 is more ambitious in the growth of distributed solar PV technologies, with impacts on greenhouse gas emission reductions over 2020–2050 of 68.64 gigatons associated with more than US$13.5 trillion of lifetime savings.
Solar has an incredibly promising long-term potential because solar resources are plentiful and widespread and future advances in both battery and PV technologies should continue to drive the adoption of this technology, even in a world without specific policy interventions. Based on the financial impacts alone, it is clear that global adoption of rooftop solar is economically viable and will provide a significant return on investment. Rapid adoption will also contribute substantially to global greenhouse gas abatement.
Nevertheless, the massive adoption of rooftop solar requires several issues to be contended with. It must be noted though that sunlight is intermittent, and electricity profiles from solar PV do not always match well with the typical demand profile of electricity consumers. This means that PV often must be installed alongside dispatchable sources such as coal and natural gas. Alternatively, solar PV can be installed with an energy storage system so that solar electricity generated during the day can be stored for use during the hours when the sun is not shining. Also, there will need to be more demand flexibility, to change the demand profile to better match the generation profile. There may also be materials constraints on the expansion of production capacity for current PV technology, for several critical materials are only mined as byproducts of other metals and could be limited in their ability to meet the levels of production needed for significant global adoption. More research into materials reduction in PV systems design will help address this issue.
 Current adoption is defined as the amount of functional demand (TWh) supplied by the solution in 2018.
 All monetary values are presented in 2014 US$.
 For example: LED lighting and high efficiency heat pumps.