The Solar Age – A Bright Future To Mankind

From Burning Fuel To Turning Light Into Lightning

Since the dawn of time, energy has been at the epicenter of civilization. For most of it, burning things has been the primary energy source, excluding simple muscle power (human or animal).

From primitive forges melting bronze into the first armor and swords to the modern power plants burning coal, oil, and gas, we progressed in complexity. Still, the base idea stayed the same: heat was used to transform material (like melting ore into metal), including turning water into steam to power to create electricity.

Photovoltaic technology changed this, allowing for the first time the production of energy on a large scale with no moving parts (which even excludes wind power).

Such a design has tremendous advantages, as no moving parts mean a lot more durability of the associated machinery. It is also an energy generation system directly creating electricity, instead of some other energy form needing conversion into electricity, like fossil fuels and nuclear power plants, which cycle from heat -> steam -> power.

A Tremendous Growth

The market for solar energy has grown massively over the last few years and is still expected to grow by 15.4% CAGR in the US until 2030.

The West’s adoption of solar energy is actually dwarfed by the global growth of solar energy, with China leading the charge, as it is responsible for more solar power project pipelines than the rest of the world combined.

China has been ramping up its renewable energy capacity year on year, installing more solar power between 2023 and 2024 than the previous three years combined, and more than the total global capacity installed in 2023.

This has put the Asian giant on track to achieve an installed wind and solar capacity of 1,200 GW by the end of the year, putting it six years ahead of the government goal.

Source: Energy Wind Down Media

This has led important publications like The Economist to literally call it a new age:

Of course, the Economist cover might also be a bit premature, as it has a long history of being wrong, a.k.a. the “magazine cover curse”.

However, in the long run, you might see it proved to be prophetic.

Thermal Solar Versus Photovoltaic

There are actually two ways to produce solar energy. The now dominant one is photovoltaic, which relies on the ability of semiconductor material to generate electricity when hit with photons.

Another approach is to use mirrors to concentrate the sun’s rays into one spot and heat it to hundreds of degrees. Most of the time, the light is converging onto a tower that converts this heat into electricity.

Thermal solar projects were once popular, but have run into issues of profitability, as the intense heat can cause technical issues. The dangers to wildlife, especially birds, are also an issue.

Meanwhile, progress in semiconductor manufacturing and a growing economy of scale in the production of solar panels has led to a steady decline in photovoltaic costs, which have become 30x cheaper since 1990.

As a result, photovoltaic technology is now dominating the solar industry.

From Polysilicon To Advanced Solar Panels

Today, solar panels are made of more than 90% silicon-based technology.

This technology, especially polycrystalline silicon has been at the forefront of the development of the solar industry and the recent cost decline (monocrystalline silicon is more durable, but also less cost-efficient).

However, polysilicon technology R&D is also starting to hit a point of diminishing returns. So, the industry is looking at multiple ways to increase the efficiency of solar panels.

Thin Film Cadmium Telluride

An alternative to mono or polycrystalline silicon is cadmium telluride. Due to its high efficiency, it is the only thin film photovoltaic technology that is cost-competitive with polysilicon.

The technology has a few key advantages, but it also has a few problems.

Its main benefits are:

• Simpler manufacturing process, allowing for quick production with less capital expenditure.
• Lighter weight than silicon.
• According to the Department Of Energy, its manufacturing produces 6x less carbon than silicon.
• Light is absorbed more efficiently, with more of the sunlight spectrum utilized.

The technology is however reliant on the use of massive amounts of cadmium and telluride, both rather toxic materials. This brings into question its ecological cost, with mining impact and heavy metal pollution to be balanced with the carbon emission avoided.

Another issue is resource availability. Tellurium is a relatively rare mineral, almost as rare as platinum. So it could be difficult to ramp up the production of thin film solar panels with cadmium telluride and fully replace the current silicon production, even less the expectation of more panel production in the future.

In both cases of resource rarity and pollution risk, proper handling of the recycling and the whole lifecycle of the product will be required.

Due to these limitations, this technology will likely stay confined to specific applications, especially where the weight of the solar cell is a key factor, for example, wearable devices, but also mobility, space, etc.).

Perovskite

Perovskite, a calcium titanium oxide mineral, is another material investigated for its potential in photovoltaic energy.

The technology has made massive progress in the last years, with an efficiency (amount of light converted into electricity) of lab prototypes of just 3.8% in 2009 to reach 33.9% in 2024 for a design by LONGi Green Energy Technology.

The advantage of perovskite is its low cost and the possibility of ” printing” the solar cell. A big driver of the lower cost is that it can be produced at room temperature, compared to silicon, which requires hundreds of degrees.

Perovskite cells are also flexible, opening new applications like car roofs and drones. It also absorbs a large portion of the Sun’s light, leading to higher theoretical efficiency.

The main thing that has limited the adoption of perovskite is its durability. Most perovskite solar cells last only a few years. Potential leakage of heavy metals, notably lead is also a concern.

Overall, perovskite solar cells are a very promising technology, but also one barely entering the commercial stage. One way to speed up its adoption is probably to look at silicon-perovskite tandem cells, like the one developed by LONGi.

Quantum Dots And Other Quantum Effects

The key to improving solar panel efficiency is to increase the amount of light absorbed. Currently used polysilicon only absorbs a part of visible light, and leaves out both infrared (most of the Sun output) and UVs.

One option is to use quantum dots, nanoparticles with different light absorption depending on their size, the discovery of which was awarded a Nobel Prize in 2023 (follow the link to read our article about quantum dots).

Quantum dots could be especially efficient in absorbing the light currently missed by silicon solar panels.

So, while conventional solar cells are likely to progress to a maximum of 30-35% conversion efficiency, quantum dots solar cells have a theoretical maximum of 66% efficiency.

Other advanced designs could leverage other quantum effects to increase solar efficiency, for example, bowtie resonators using the Casimir effect & Van der Waals forces for capturing light.

Advanced coating

Most of the effort to improve solar panels’ efficiency has been focused on alternative chemistry to silicon. Small design changes could also play a role.

For example, the Canadian private company SunDensity uses special nano-coatings to protect solar panels from UV-induced degradation instead of converting UV light into more electricity. SunDensity also recently acquired quantum dots solar panel developer QD Solar.

Bifacial Panels & Moving Mounts

Most solar panels are designed to absorb light only from one side, hence making it very important that they are angled perfectly toward the Sun.

Bifacial solar panels, instead, are designed to produce light coming from both the front and the back of the panel. This can overall increase their energy yield. It can also enable new types of installation, like for example putting the panels vertically, on an East-West axis.

Such installation can have many advantages:

• In many climates, the noon Sun “saturates” the panel’s ability to absorb light, reducing the interest of being facing full South.
• Better air circulation reduces the temperature of the panel, reducing yield loss from overheating.
• The panels can absorb reflected light, like from a concrete surface or snow.
• The East-West axis maximizes production in the morning and evening when the energy demand is the highest and solar production is “missing”.

While not maybe a revolution, bifacial panels could become a lot more common in the future. Especially as the “duck curve” of electricity price reduces the profitability of maximizing production for the middle of the day, and increasing winter production is needed.

Another option to maximize orientation to the sun is moveable mounts or “solar trackers”, following the sun’s direction throughout the day. This can improve yield, especially in northern climates where the Sun’s position can vary a lot during the year but is complex and moves part of the solar installation.

Heat & Thermophotovoltaic

Heat management is a serious issue for photovoltaic panels. This is because physics stipulates that energy production will decline as the semiconductor materials heat up.

This means that keeping the panels cool is important. Most installations use airflow, especially wind, but other systems are now integrating circulating water in the back of the panel to keep it cold.

 

Another thing solar panels can do is absorb heat emitted in the form of infrared light. In this case, they are called thermophotovoltaic panels.

They can be used in combination with heat batteries to produce electricity from stored heat.

Floatovoltaics

As land can be a premium for large-scale solar applications, the idea came to instead use bodies of water. This method, called floatovoltaics, will float the panels instead of mounting them on the ground or on a roof.

This not only saves land use for agriculture but also helps keep the panels cool, making it a good option for hot tropical climates.

Agrivoltaics

Even when perfectly arrayed, solar panels are still only absorbing a part of the Sun’s light, with their shadow not fully dark. Agrivoltaics is the concept of using this residual light to grow crops at the same time that the panels are producing electricity.

When done properly, it can provide multiple advantages:

• Protecting crops from excess sunlight and UVs.
• Reducing evaporation and irrigation needs.
• Dual use of the land reduces the pressure solar utility-scale projects put on available farmland.
• Can provide shadow to farm animals.
• The evaporation from the plant’s leaves cools down the panels.

These effects can be especially beneficial in desert regions, where additional shadow helps grass growth. This, in turn, reduces dust and the need to clean the panels. The water used to clean the panels can also irrigate the plants under them.

This, however, can be difficult to put into practice, as it requires additional training and new practices for both the farmer and the solar installer.

Space solar

No matter how efficient or optimally installed, solar power falls to zero during the night. It also tends to decline severely during the winter months in regions far from the equator.

To solve this problem, some are proposing to put solar arrays directly in space, orbiting Earth.

This would provide 24/7 solar power that can even be distributed to different collecting antennae throughout the globe, depending on where it is most needed.

A key factor in making it a reality will be declining launch costs to send materials into orbit, and/or the production of solar panels directly into space, from asteroids or lunar materials.

We discussed how it would work in detail, the technical challenges, and the companies at the forefront of this idea in “Space-Based Energy Solutions For Endless Clean Energy”.

The Limits of Solar

Despite the collapsing cost of solar energy, it still suffers from a few limitations that so far hindered its adoption to fully replace other sources of energy.

Intermittency & Seasons

Solar production can vary from day to day (cloudy or not) and month to month quite greatly. It also completely stops at night.

There are only a few solutions to solve this issue, almost all requiring new technology and/or massive investment:

Limits To Electrification

Electricity represents just 20% of our civilization’s energy consumption, with much more used for transportation (cars, planes, long-distance shipping), heat/cooling, and industrial processes (steel & aluminum making, fertilizer production, etc.).

So, while solar can, in theory, satisfy most of our energy needs, it will need to be coupled with other technologies and infrastructure to fully decarbonize and switch to renewable energy systems.

This could include hydrogen or ammonia, as well as maybe some level of nuclear energy or geothermal to provide extra energy in winter. So, in the most likely future, our energy mix will not be 100% solar-based.

Geopolitics And Dependency to China

Most of the solar supply chain (and green energy in general) is currently dominated by China.

The country produces 80% of the world’s solar panels, 60% of its electric vehicles, and more than 80% of its electric vehicle batteries.

This production from China is also not as low in carbon as we might think, with most solar panel factories and silicon refineries powered directly by coal-burning power plants.

Combined with constantly growing international tensions and conflict, this could hinder the adoption of solar energy in the West. Especially as cheaper China-made panels are getting slapped with tariffs.

Resource Limitations

While silicon is very abundant on Earth, it is not the only material solar cells require. For example, the solar industry consumed 193 million ounces of silver in 2023, up 64% from just 2022. So solar energy consumes more than 10% of global silver production.

Luckily, the solar industry is less reliant on rare earth metals than wind power. Still, it consumes significant amounts of indium, gallium, and selenium, all materials in limited supply and whose extraction carries an environmental cost.

Would perovskite be widely adopted, the same limitation regarding titanium production could become an issue as well.

Cheap Power Consequences

The potential limits to solar power can probably mostly be overcome through a mix of investment, technological improvement, and improved resource utilization and recycling.

And the advantages of a fuel-free abundant energy are rather colossal.

Decentralized Energy Production.

Contrary to traditional power plants and even more nuclear power, solar power is decentralized by nature.

While this can be something to criticize (more land use than other energy sources), it also means that every rooftop, lake, or field can become a power plant.

This can reduce the need for a massive power grid and increase the overall resilience of energy production. This is especially true if battery prices keep declining, allowing for equally decentralized energy storage.

Poor Countries Development

Most of the world’s poorest countries are located in the tropical regions, which are exposed to the most sun radiation on Earth.

Until recently, these regions preferred to rely on cheaper fossil fuel and biomass for their energy need. With the decline of solar costs, this is changing rapidly.

This should speed up these countries’ development, by bringing to its people and companies productivity boosters like artificial lights, water cleaning, transportation, cooling, digitalization, etc.

As these countries have not invested in legacy technology like large power grids or massive, long-lasting power plants, they could directly move to a fully decentralized solar-based energy system.

This way, it could mimic how these countries are now almost fully connected through mobile & wireless networks, bypassing entirely the stage of investing in fixed landlines.

Ultra-abundant & Cheap Energy

Water, Desert & Agriculture

If the cost of solar energy keeps declining, we might suddenly have a lot more energy than we currently use. This opens the way to many civilization-changing innovations.

For example, it could power massive desalination stations, providing abundant fresh water to desert regions, which make up a staggering 1/3^rd of the Earth’s surface.

Mining & Metals

Another application of abundant energy is in mining. One reason many metals and other minerals are rare today is that most deposits are too low-grade to make it economical to mine them.

Abundant energy could allow for direct “brute force” melting the whole rock, and extracting the minerals trapped in the ore. This could make materials like lithium, titanium, or tungsten as abundant in the future as steel and aluminum are today.

Fertilizer

Most nitrogen-based fertilizers are today produced with natural gas. Cheaper energy could create larger and greener production, boosting agricultural yield globally while decreasing food prices.

Carbon Capture

Not only would abundant solar reduce carbon emissions, but it could provide us with the means of fully solving any climate crisis.

This is because while we already have the technology to capture carbon, it is very energy-intensive.

Would energy become a lot cheaper, we could run carbon capture solutions to reduce the CO2 concentration, and permanently lock it out of the atmosphere either in the form of liquid fuels or solid graphite.

Investing In Solar Power

Solar energy production is constantly growing at a double-digit rate and will be a key driver to decarbonize the economy. It has still also a very long way to go, with the immense majority of our global electricity production, and even more total energy, coming from fossil fuels.

Over the years, it is a sector that has evolved to reward the largest companies, with economies of scale a key factor in managing to generate profit in a very competitive environment. With of course new technologies a potential disrupter of established polysilicon panel manufacturers.

You can invest in solar companies through many brokers, and you can find here, on securities.io, our recommendations for the best brokers in the USA, Canada, Australia, the UK, as well as many other countries.

If you are not interested in picking specific solar companies, you can also look into ETFs like Global X Solar ETF (RAYS), Invesco Solar ETF (TAN), or Global X China Clean Energy ETF (2809.HK) which will provide a more diversified exposure to capitalize on the solar and clean energy industry.

You can also read our article about the “Top 10 Solar Power Stocks to Invest In”.

Solar Companies

1. Daqo New Energy Corp.

This Chinese company is one of the world’s leaders in polysilicon production, the central component for solar panel manufacturing. This also makes Daqo one of the founding pillars of China’s domination over the solar manufacturing sector.

The company has been growing its production capacity very quickly, more than 8x since 2019.

Daqo’s position at the center of the solar panel supply chain enabled it to benefit greatly from the sector’s growth, with revenues growing from $0.68B in 2020 to $4.6B in 2022. After a surge in 2022, polysilicon prices have cooled down, causing the stock price to crash from its 2021 peak.

The company’s communication and website are a little lackluster, but not out of character for an industrial B2B company, more focused on its image inside the industry than with the larger public or foreign investors.

In 2023, the stock trades compared very cheaply to P/E or cash flow. This is partially due to controversies, with the company linked to the use of forced labor in Xinjiang and talks in Washington DC of additional sanctions against companies operating in the region.

Investors should be aware that Daqo stock carries a very real geopolitical risk and a large financial upside due to its low valuation multiples.

2. JinkoSolar Holding Co., Ltd.

Jinko is one of the largest solar panel manufacturers in the world, and it is based mostly in China. To avoid tariffs, the company is diversifying its manufacturing base, with silicon wafer manufacturing in Vietnam and solar cell manufacturing in Malaysia and the US.

In any case, the company is not overly exposed to Western markets, with China, Asia Pacific (APAC), and emerging markets making the bulk of the company’s business.

Jinko has delivered 230 GW of solar cells in the company’s history and 20 GW in Q1 2024, up from 14.5 GW just a year ago.

This makes Jinko the #1 in the photovoltaic industry.

Jinko’s most advanced solar cell, the N-type, achieves a remarkably high 25.8% energy efficiency. It also offers bifacial panels.

In 2023, the N-type took over most of Jinko’s sales, representing 80% of the whole shipments, with more capacity coming from 56 GW production facility expected to reach full speed by the end of 2024 to make up 90% of delivery by year-end.

Total production capacity is expected to reach 120-130 GW, or almost half of the company’s cumulative production in its entire history.

Looking to green the profile of its product, Jinko Solar also released NeoGreen, the first N-type solar panel produced entirely with renewable energy (instead of the commonly used in China coal).

Jinko’s ultra-aggressive growth in production capacity reflects the company’s confidence in its N-type technology and ambition to seize the export markets of Asia, Africa, and South America. And the overall prospect of solar power to take over the world’s energy systems.