Published Date: February 18, 2024
Author: HANetf
Learn more about our solar energy ETF .
Solar energy is derived from the sun’s radiant light and heat. It is an essential source of renewable energy. The sun bathes earth with enough energy in one hour to satisfy the world’s energy needs for an entire year.
Solar Energy Source: The Sun
While every location on earth receives some sunlight over a year the amount of solar radiation that reaches any one spot on the earth’s surface varies. Solar technologies capture this radiation and turn it into useful forms of energy.
There are two main types of solar energy technologies:
Photovoltaics (PVs) which is used in solar panels. When the sun shines onto a solar panel energy from the sunlight is absorbed by the PV cells in the panel. This energy creates electrical charges that move in response to an internal electrical field in the cell causing electricity to flow.
Concentrated Solar-Thermal Power (CSP) which uses mirrors to reflect and concentrate sunlight onto receivers (such as solar modules as seen in the chart below) that collect solar energy and convert it to heat. This heat can then be used to produce electricity or stored for later use following the process shown below. CSP is used primarily in large power plants.
Source: EQM Indexes This illustration shows how heat from the sun is captured by gadgets known as solar modules which then stores energy into a charger controller a battery bank and an AC service panel. The stored energy is used to power utility grids and to supply energy for critical needs during blackouts and other power outages.
Systems Integration
Solar energy technology doesn’t end with electricity generation by PV or CSP systems. These solar energy systems must be integrated into homes businesses and existing electrical grids with varying mixtures of traditional and other renewable energy sources.
Why Go Solar?
Solar energy can help reduce the cost of electricity contribute to a resilient electrical grid create jobs and spur economic growth generate back-up power for night-time and outages when paired with storage as well as operate at similar efficiency for small- to large-scale use.
Solar Energy Users
Solar energy systems come in all shapes and sizes. Residential systems are found on rooftops such as those across the United States. Businesses are also opting to install solar panels.
Furthermore utilities are building large solar power plants to provide energy to all customers connected to the grid.
Solar energy was used by humans as early as 7th century B.C. as they used sunlight to light fires with magnifying glass materials. In the 3rd century B.C. the Greeks and Romans were said to harness solar power with “burning mirrors” to light torches for religious ceremonies. Chinese civilization documented the use of mirrors for the same purpose later in 20 A.D.
In the late 1700s and 1800s researchers and scientists used sunlight to power ovens for long voyages. They also used sunlight to produce solar-powered steamboats.
The technology to develop solar energy as we know today dates back to the 1860s. American inventor Charles Fritts driven by expectations that coal would soon become scarce installed the world’s first rooftop PV solar array. He used 1%-efficient selenium cells a photoelectric device used to generate or control an electric current on a New York City roof in 1884.
The development of solar technologies stagnated in the early 20th century in the face of the increasing availability economy and utility of coal and petroleum.
However the 1973 oil embargo and the 1979 energy crisis caused a reorganization of energy policies around the world bringing renewed attention to developing solar technologies.
Deployment strategies focused on incentive programs such as the U.S. Federal Photovoltaic Utilization Program in the 1970s and Japan’s Sunshine Program in the 1980s.
Other efforts included the formation of research facilities in the United States Japan and Germany. Between 1970 and 1983 installations of PV systems grew rapidly but falling oil prices in the early 1980s moderated the growth of PVs from 1984 to 1996.
Mid-1990s to early 2010s
In the mid-1990s development of both residential and commercial rooftop solar as well as utility- scale photovoltaic power stations began to accelerate due to supply issues with oil and natural gas global warming concerns and the improving economic position of PV relative to other energy technologies. In the early 2000s the adoption of feed-in tariffs&mdasha policy mechanism that gives renewables priority on the grid and defines a fixed price for the generated electricity&mdashled to a high level of investment security and to a soaring number of PV deployments in Europe.
Moreover in 2012 Tokelau (a New Zealand territory) became the first country to be powered entirely by PV cells with a 1MegaWatt system using batteries for night-time power.
Source: EQM Indexes partner of our solar energy ETF .
Current status
For several years worldwide growth of solar PV was driven by European deployment but has since shifted to Asia especially China and Japan and to a growing number of countries and regions all over the world including Australia Canada Chile India Israel Mexico South Africa South Korea Thailand and the United States.
From 2000 to 2013 worldwide PV growth has averaged 40% annually and total installed capacity reached 303 gigawatt (GW) at the end of 2016 with China having the most cumulative installations (78 GW) and Honduras having the highest theoretical percentage of annual electricity usage which could be generated by solar PV (12.5%). The largest manufacturers are located in China.
Concentrated solar power (CSP) also started to grow rapidly increasing its capacity nearly tenfold from 2004 to 2013 albeit from a lower level and involving fewer countries than solar PV. As of the end of 2013 worldwide cumulative CSP-capacity reached 3425 megawatts (MW).
In the United States solar energy has experienced an average annual growth rate of 42% over the last decade. Thanks to strong federal policies like the Solar Investment Tax Credit rapidly declining costs and increasing demand across the private and public sectors for clean electricity there are now more than 97 GWs of solar capacity installed nationwide enough to power nearly 18 million homes.[3]
Sources: Solar Energy Industries Association and Wood Mackenzie Power & Renewables 2020 This illustration shows the cumulative solar installations in the United States (measured in Megawatts of direct current) from 2006 to 2020 for residential non-residential utility and utility (CSP).
Learn more about our solar energy ETF here.
[1] Source: https://en.wikipedia.org/wiki/Solar_power
[2] Sources: Energysage.com https://news.energysage.com/the-history-and-invention-of-solar-panel-technology/ Wikipedia.com https://en.wikipedia.org/wiki/Solar_power
[3] Sources: Solar Energy Industries Association Wood Mackenzie Power & Renewables 2020 https://www.seia.org/solar-industry-research-data
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