Solar Energy: Key to the Energy Transition

Solar energy and energy transition

Solar energy has established itself as one of the cornerstones of the new global energy model. As a clean, inexhaustible, and globally available energy source, it enables progress toward more sustainable generation systems that are less dependent on fossil fuels.

The exponential growth of solar technologies over the past two decades, driven by innovation and cost reduction, has turned this renewable source into a strategic solution against climate change. Moreover, its ability to integrate into distributed generation models and to complement other technologies—such as thermal or electric storage—positions it as a key element in the transition toward a decarbonized energy system.

What is Solar Energy and How is it Harnessed?

Solar energy is the electromagnetic radiation emitted by the Sun that reaches the Earth in the form of light and heat. This energy can be converted into electricity or useful heat through various technologies, grouped under the concepts of active solar energy and passive solar energy.

The use of solar energy is based on capturing, transforming, and storing this solar radiation for later use, whether in homes, industrial processes, or large-scale electricity generation.

Basic Principles of Solar Energy

Solar radiation can be harnessed in two main ways:

  • Direct conversion of light into electricity, through the photovoltaic effect, in which photons release electrons in a semiconductor material, generating electrical current.

  • Conversion of solar heat into thermal energy, through solar collectors or solar concentration systems that capture radiation and transfer it to a thermal fluid.

Both methods can be combined with energy storage systems, whether electric or thermal, to ensure a steady supply even when there is no direct sunlight.

Different Forms of Solar Energy Utilization

Over the years, multiple technologies have emerged to harness solar energy. These are categorized based on the type of energy conversion, operating temperature, and application:

Photovoltaic Solar Energy

Photovoltaic solar energy directly converts sunlight into electricity using photovoltaic cells made of semiconductor materials like silicon.

  • It is the most widespread solar technology globally.

  • It works even under diffuse irradiation, making it effective across various latitudes.

  • Can be installed on rooftops, façades, ground, or even in floating systems (floating PV).

  • Its low cost and modularity allow for anything from small residential systems to gigawatt-scale plants.

Photovoltaics have transformed the energy market, becoming one of the cheapest options for generating electricity in many regions of the world.

Low-Temperature Solar Thermal Energy

This type of solar energy is mainly used for space heating, domestic hot water, and low-temperature industrial thermal processes (up to 100–120°C). It uses thermal solar collectors—such as flat-plate or evacuated tube collectors—to heat a fluid that is then used directly or stored in tanks.

  • Ideal for applications in buildings, hotels, hospitals, and food-processing industries.

  • Highly efficient in sunny climates and serves as a direct alternative to gas or electric heating.

Solar Thermal Power (Concentrated Solar Power – CSP)

Thermal solar energy or CSP (Concentrated Solar Power) uses optical systems (mirrors or lenses) to concentrate solar radiation onto a focal point or line, reaching high temperatures (300–1,000°C). The concentrated heat is transferred to a thermal fluid that powers a thermodynamic cycle (typically a Rankine cycle or steam turbine) to generate electricity.

  • The most common technologies include parabolic trough collectors, solar towers, and parabolic dishes.

  • Easily integrates with Thermal Energy Storage (TES) systems, allowing for power generation even without sunlight.

  • Ideal for large-scale power plants in regions with high direct solar irradiance.

Passive Solar Energy

Passive solar energy does not require mechanical or electrical devices to capture or convert solar radiation. Instead, it relies on architectural design to maximize the natural intake of sunlight and heat within buildings.

It makes use of elements such as solar orientation, high thermal mass materials, cross-ventilation, and seasonal solar shading.

  • Helps reduce the demand for heating, cooling, and lighting in buildings, thereby improving energy efficiency.

  • Although it does not generate electricity, its impact on overall energy consumption is significant, particularly in efficient and sustainable buildings.

Although it does not generate electricity, its impact on energy consumption is significant, especially in efficient and sustainable buildings.

Concentrated Solar Power with Thermal Energy Storage (TES)

An advanced evolution of solar thermal technology is its integration with thermal energy storage (TES). In this case, the heat collected by the solar system is transferred to a storage medium (such as molten salts or ceramic materials), which can retain the energy for hours or even days.

  • It enables electricity generation at night or during periods of low solar radiation.

  • It is an ideal solution to ensure stability in power grids with high renewable energy penetration.

  • The combination of solar thermal energy + TES + power generation offers a firm, dispatchable, and completely emission-free alternative.

Installed Capacity and Current Contribution of Solar Energy Worldwide

Solar energy has experienced exponential growth over the past decade, becoming one of the most widely installed renewable sources on the planet. Its role in the global energy transition is reflected not only in its installed capacity, but also in its increasingly significant contribution to global energy demand.

Global Energy Demand Covered by Solar Energy

Currently, solar energy covers around 5% of global electricity demand, according to 2024 data. Although it still represents a relatively modest fraction of the total, its annual growth is the fastest among all energy sources.

  • In some regions, such as Europe, Australia, Chile, or the United Arab Emirates, the share of solar energy can exceed 15% of the national electricity mix, especially during periods of high solar radiation.

  • The development of energy storage technologies, both electrical and thermal, is expanding the possibilities of solar energy beyond daylight hours, increasing its relevance as a firm energy source.

Globally Installed Solar Capacity: Recent Data

According to updated data as of the end of 2024, the total accumulated solar photovoltaic (PV) capacity worldwide exceeds 1,400 GW, while concentrated solar power (CSP) capacity stands at around 7 GW.

  • Asia leads the growth, with China at the forefront, followed by India and Japan.

  • Europe maintains a strong position, with Germany, Spain, and Italy as historical leaders.

  • Latin America and Africa are showing strong momentum, with countries such as Chile, Brazil, South Africa, and Morocco investing in large-scale solar projects, both PV and CSP.

This sustained growth is driven by cost reductions, government incentives, and the need to diversify the energy mix in the face of climate and geopolitical crises.

Solar Energy’s Share in the Global Energy Mix

Although solar energy represents only a portion of the total installed capacity, its share in new renewable energy generation is dominant. In 2023, over 60% of newly installed renewable capacity worldwide came from solar systems.

  • The versatility of solar PV, which can be integrated into both centralized grids and distributed self-consumption systems, has been key to this expansion.

  • Meanwhile, solar thermal and concentrated solar power with storage are beginning to play a relevant role in decarbonizing industrial sectors and even in nighttime electricity generation, complementing photovoltaic solar energy.

Installed Solar Power by Country

The global distribution of solar capacity is uneven, but it shows clear trends toward geographic and technological diversification. While some countries lead in photovoltaic solar power, others are investing in concentrated solar power (CSP) to diversify their renewable sources.

Countries with the Highest Installed Photovoltaic Capacity

  1. China: The undisputed leader, with over 500 GW of installed photovoltaic capacity in 2024. Its strategy includes large solar plants in deserts, grid integration, and energy storage projects.

  2. United States: Exceeds 150 GW, with significant growth in residential and community installations, as well as large projects in California, Texas, and Nevada.

  3. India: With more than 80 GW, it promotes photovoltaics as a solution for rural electrification and reducing coal dependence.

  4. Germany: A pioneer in the energy transition, with over 70 GW installed, mainly on rooftops and urban structures.

  5. Japan, Brazil, Australia, and Spain also stand out, with capacities ranging between 20–40 GW, depending on the country.

Leading Countries in Concentrated Solar Power (CSP)

  1. Spain: The European leader and global pioneer, with over 2.3 GW of installed CSP capacity, most of it with thermal energy storage (TES) systems.

  2. United States: Home to iconic plants like Ivanpah and Crescent Dunes, though CSP growth has slowed in favor of photovoltaics.

  3. United Arab Emirates: The Noor Energy complex in Dubai is one of the world’s largest CSP projects with storage.

  4. China and Morocco: Both have developed multiple CSP plants with a focus on storage to enable continuous generation, especially in desert environments.

Comparison of Development Models: Decentralized vs. Centralized

The development of solar energy typically follows two main models, each with its own advantages and challenges:

  • Decentralized Model: Based on rooftop installations, small community plants, or self-consumption systems. It promotes public participation, energy resilience, and reduces transmission losses.

  • Centralized Model: Large-scale solar plants connected to the national grid. Offers economies of scale, centralized control, and greater impact in terms of installed capacity.

Countries like Germany, Japan, and Australia favor decentralized models, while China, India, Chile, and the United Arab Emirates are developing solar megaprojects as part of a more centralized approach.

Growth Projections and Future Trends

Solar energy is emerging as one of the main protagonists in the transition to a clean, resilient, and decentralized global energy system. Its rapid expansion, technological advances, and political-economic support worldwide are shaping a future where solar energy will be the backbone of global decarbonization.

Installed Solar Power Forecast for 2030, 2040, and 2050

Various international organizations, such as the International Energy Agency (IEA), IRENA, and the IPCC, have developed future scenarios that reflect the enormous growth potential of the solar sector.

  • By 2030, global photovoltaic solar capacity is estimated to exceed 3,500 GW, with many countries incorporating energy storage and smart grids.

  • By 2040, more than 8,000 GW of photovoltaic capacity is projected globally, covering approximately 25% of the world’s electricity demand.

  • By 2050, under climate neutrality scenarios, solar energy (both photovoltaic and thermal) could surpass 20,000 GW, contributing more than 30% of total energy supply, alongside massive storage and electrification of sectors such as industry and mobility.

This growth will rely not only on geographic expansion but also on disruptive technologies, self-consumption models, and deeper integration with digital and storage systems.

Role of Solar Energy in Net-Zero Emission Scenarios

In all climate neutrality scenarios proposed by international organizations, solar energy plays an essential role because it is:

  • Abundant and available worldwide, even in regions without access to fossil fuels.

  • Modular and scalable, ranging from domestic installations to industrial megaprojects.

  • Complementary to other renewables, especially wind and hydroelectric power.

  • Capable of powering not only the electricity grid but also industrial processes, green hydrogen production, and urban heating systems through solutions like thermal solar with thermal energy storage (TES).

Solar energy is also a key pillar in the decarbonization strategy for hard-to-electrify sectors, such as heavy industry or maritime transport, via indirect production of synthetic fuels using Power-to-X technologies.

Technological Advances Driving Expansion

Continuous innovation in solar technologies is a major factor in increasing competitiveness. Key advances shaping the sector’s future include:

High-Efficiency Photovoltaic Panels

Conventional silicon panels have commercial efficiencies of 22–24%, but current developments focus on:

  • Bifacial panels, which generate electricity from both sides.

  • Anti-reflective and self-cleaning surfaces that improve capture under variable conditions.

  • Solar trackers that increase daily capture by automatically orienting toward the sun.

These improvements allow more energy generation per square meter, reduce costs per watt installed, and improve performance in limited spaces.

Perovskites and New Materials

Perovskite solar cells are among the most promising technologies, combining low production costs, mechanical flexibility, and potential efficiencies over 30%.

  • Tandem cells combining perovskite with silicon are already being developed, achieving efficiencies above 28% in the lab.

  • Other materials under study include organic cells, quantum dots, and nanomaterials, aimed at further reducing costs and expanding applications, such as solar windows, smart textiles, and mobile devices.

Energy Storage with Batteries and TES

For solar energy to play a leading role in continuous and stable supply, energy storage is key:

  • Lithium-ion and solid-state batteries will store photovoltaic surpluses and reduce dependence on fossil fuels during demand peaks.

  • Thermal energy storage (TES) batteries, especially integrated with CSP plants or solar thermal industry, will be essential for storing solar heat during the day and using it at night or in industrial processes.

These technologies will extend solar energy operation to 24 hours, making it a firm and dispatchable source.

Digitalization and Smart Management of Solar Generation

The future of solar energy depends not only on physical technology but also on artificial intelligence, IoT, and big data, which enable:

  • Real-time optimization of generation and consumption.

  • Predictive maintenance to extend asset life.

  • Integration into smart grids, facilitating energy exchange, shared self-consumption, and participation in dynamic electricity markets.

  • Advanced monitoring of solar performance, adapting operation to climatic and market conditions.

Combining solar energy with artificial intelligence will be crucial for developing more efficient, resilient, and participatory energy systems.

Benefits of Solar Energy as a Renewable Source

Beyond its technical and economic aspects, solar energy represents a unique opportunity to transform the energy system toward a decentralized, sustainable, and equitable model. Its social, environmental, and geostrategic benefits are fundamental for its large-scale adoption.

Reduction of Greenhouse Gas Emissions

Solar energy produces no emissions during operation and, according to the International Energy Agency, prevents the emission of more than 1 billion tons of CO₂ annually worldwide. This makes it an essential tool to:

  • Meet the goals of the Paris Agreement

  • Achieve net-zero emission scenarios

  • Decarbonize energy and industrial sectors with large climate footprints

Additionally, its full life cycle (manufacturing, transport, operation, and recycling) has a much lower carbon footprint compared to fossil fuels.

Energy Security and National Sovereignty

Solar energy strengthens countries’ energy independence by reducing their dependence on:

  • Imported fossil fuels

  • Volatile international markets

  • Vulnerable centralized infrastructures

Its ability to be deployed locally — from rural areas to industrial plants — allows nations to diversify energy sources and reinforce energy resilience.

Decentralized Generation and Energy Democratization

Thanks to its modularity and scalability, solar energy enables:

  • Domestic and industrial self-consumption

  • Creation of local energy communities

  • Access to electricity in remote areas through off-grid solar systems

This transforms users into prosumers (producers and consumers of energy) and promotes a more participatory and democratic model of energy management.

Green Job Creation and Local Development

The solar sector is one of the largest employers within renewable energies:

  • In 2023, solar energy employed over 4.9 million people worldwide (IRENA).

  • This number is expected to exceed 14 million by 2050 if global climate goals are maintained.

Furthermore, it boosts local economies through:

  • Technical and professional training

  • Development of regional supply chains

  • Revitalization of rural and peri-urban areas

Current Challenges of Solar Energy and Opportunities for Improvement

Despite the exponential growth of solar energy, its massive adoption involves a series of technological, economic, and structural challenges that must be addressed to ensure sustainable, equitable, and effective deployment. At the same time, these challenges represent opportunities for innovation and improvement that are being explored worldwide.

Variability and Climate Dependence

Intermittency is one of the main challenges of solar energy:

  • Its generation depends on daily and seasonal solar irradiation, so it does not always match energy demand.

  • Cloudy days or nighttime reduce production, affecting grid stability if there are no complementary systems.

Opportunity: The development of hybrid systems (solar + storage + other renewables), along with integration of artificial intelligence and advanced weather forecasting, is enabling optimization of solar production and more accurate prediction of fluctuations.

Need for Energy Storage Infrastructure and Smart Grids

Solar energy, especially distributed photovoltaics, requires:

  • Smart electrical grids capable of managing the variable inflow and outflow of energy.

  • Energy storage systems, such as lithium-ion batteries, thermal energy storage (TES), or even green hydrogen, to store energy during low demand hours for later use.

Opportunity: Large-scale storage deployment and grid digitalization will allow flexible and efficient system management, improving resilience and reducing demand peaks.

Implementation Costs and Access in Developing Countries

Although panel costs have dropped over 90% in the last decade, installation, operation, maintenance, and associated infrastructure costs remain barriers in many low-income countries:

  • Lack of access to financing.

  • Logistical difficulties in remote areas.

  • Shortage of trained technical personnel.

Opportunity: Innovative business models like pay-as-you-go solar, microfinancing programs, and promotion of local value chains are facilitating access in regions such as Sub-Saharan Africa and Southeast Asia.

Panel Recycling and Lifecycle Management

With rapid solar expansion, millions of tons of photovoltaic panels are expected to reach end-of-life in the coming decades. This challenge requires:

  • Efficient and sustainable recycling systems.

  • Recovery of valuable materials like silicon, aluminum, and glass.

  • Clear regulations on extended producer responsibility (EPR).

Opportunity: Circular economy practices applied to solar energy open the door to an emerging secondary industry capable of creating jobs and reducing the environmental footprint of the photovoltaic sector.

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