The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Three Charts Illustrate Why Solar Has Hit a True Tipping Point

A new report from the prominent global consulting firm McKinsey shows why solar photovoltaics have hit a tipping point.

As the economics of solar PV continue to improve steadily and dramatically, McKinsey analysts conclude that the total "economic potential" of solar PV deployment could reach 600-1,000 gigawatts (1 million megawatts) by 2020. 

In the year 2000, the global demand for solar PV was 170 megawatts.

That doesn't mean 1 million megawatts will get by 2020; it's just an estimate of the economic competitiveness of solar PV. When factoring in real-word limitations like the regulatory environment, availability of financing, and infrastructure capabilities, the actual yearly market will be closer to 100 gigawatts in 2020.

That could bring in more than $1 trillion in investments between 2012 to 2020.

The McKinsey report, appropriately named “Darkest Before Dawn,” highlights three crucial factors that are giving the solar industry so much momentum — even with such a violent shakeout occurring in the manufacturing sector today.

1. Because solar mostly competes with retail rates, the economic potential for the technology in high resource areas is far bigger than actual deployment figures would suggest. McKinsey predicts that the cost of installing a commercial-scale solar PV system will fall another 40 percent by 2015, growing the “unsubsidized economic potential” (i.e. the economic competitiveness without federal subsidies) of the technology to hundreds of gigawatts by 2020.

2. The most important cost reductions in the next decade will come not through groundbreaking lab-scale improvements, but through incremental cost reductions due to deployment. The McKinsey analysis shows how the dramatically these cumulative cost improvements can change the economics of solar. (For more, see: Anatomy of a Solar PV System: How to Continue “Ferocious Cost Reductions” for Solar Electricity.)

3. Solar is already competitive in a variety of markets today. As the chart below illustrates, there are at least three markets where solar PV competes widely today: Off-grid, isolated grids, and the commercial/residential sectors in high-resource areas. Of course, the competitiveness of the technology varies dramatically depending on a variety of local factors. But this comparison shows just how steadily the cross-over is approaching.

Wait, solar is actually competitive? Didn’t the death of Solyndra mean the death of the solar industry? Addressing the solar skeptics, the McKinsey analysts counter the notion that the solar sector is down for the count:

Those who believe the solar industry has run its course may be surprised. Solar companies that reduce their costs, develop value propositions to target the needs of particular segments, and strategically navigate the evolving regulatory landscape can position themselves to reap significant rewards in the coming years.

The short-term picture for solar is extraordinarily challenging, particularly for manufacturers trying to figure out how to make a profit with such a massive oversupply of panels on the market. But this is not an industry in its death throes; these are natural pains for a disruptive, fast-growing industry. The tipping point is upon us.

This article was originally published on Climate Progress and was republished with permission.

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



Global Forecast: Solar Installation Capacity To Top 57 GW in 2015

Renewable Energy World Editors Solar installations globally could grow by between 25 percent and 30 percent in 2015 compared to last year, according...
solar power

APS Requesting Proposals for New Large-scale Solar Power Plant

PennEnergy Editors Arizona Public Service (APS) on Oct. 1 announced it is issuing a request for proposals (RFP) to test the market for n...
clean energy

India Pledges Clean Energy Push in UN Climate Submission

Alex Nussbaum and Anindya Upadhyay, Bloomberg India, the world’s third-biggest polluter, pledged to slow the rise of greenhouse gases produced by its growing ...

Chinese Solar Component Manufacturer Facing Bond Default

Katrina Nicholas, Andrew Monahan and Chris Bourke, Bloomberg A Chinese maker of solar components is threatening to become the nation’s next company to default on bonds, highlight...


Array Technologies Finalizes Shipments to E.ON’s Maricopa West Solar Project

Array Technologies, Inc. (ATI) has completed DuraTrack® HZ shipments to the 20 MW (ac) ...

B.C. Energy Minister to provide keynote at renewables for mines summit.

BC Minister of Energy and Mines to address the challenges of providing alternative powe...

Mining leaders seek renewables solutions at Toronto Summit

The global mining sector is facing a tough business environment with low commodity pric...

American Renewable Energy Institute Gears Up for 12th Annual Summit

"Racing Climate Change: Green Bridge with China, The Road to Paris” is the theme of th...


New Mexico Attracts Jobs and Revenues with Renewable Energy Tax Credit

New Mexico has abundant fossil fuel resources: in 2013, it ranked sixth in the nation for crude oil production, seven...

The Vice President Stole My Show (Not Really)

When I finished my Solar Power International (SPI) panel discussing what future opportunities the panelists saw in so...

The Value Of The Building

If you’re selling efficiency solutions in the built environment, you may find yourself being asked by your pros...

Sewage provides energy through processing

Many nations are investing in new technology to turn sewage waste into usable energy. Japan has recently revised its ...


I am a reporter with, a blog published by the Center for American Progress. I am former editor and producer for, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep in to...


Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Certified PV Professional - online training

After completing this online training, participants will be able to unde...

CRGM - Online Training on Grid Integration of Renewable Energy

The training is useful for persons who would like to learn more about me...

Applying Renewable Energy - Online Training

RENAC Online offers a selection of courses on a wide variety of renewabl...


The Vice President Stole My Show (Not Really)

When I finished my Solar Power International (SPI) panel discussing what...

The Value Of The Building

If you’re selling efficiency solutions in the built environment, y...

It's The Experience That Counts

One of the best ways to capture a prospect’s attention is to highl...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now