BloombergNEF Report Projects Solar as Largest Power Source by 2035

Solar power is projected to become the largest source of electricity within the next decade, surpassing coal, oil and natural gas, according to a new report from BloombergNEF. The shift is expected to occur alongside increased overall energy consumption driven by artificial intelligence and the electrification of industries.

Matthias Kimmel, head of energy economics at BloombergNEF, stated that solar is winning the race on economic grounds alone.

Costs for solar panels are expected to drop another 30 percent by 2035. BloombergNEF attributes the price reductions to China's industrial policy and mass manufacturing that has lowered costs with each doubling of installed capacity. Pakistan added 25 gigawatts of solar capacity in the past two years after natural gas prices rose following Russia's invasion of Ukraine.

By 2050, solar is projected to generate more than twice as much electricity as natural gas.

BloombergNEF expects data centers to drive an additional 1 terawatt of utility-scale solar, 400 gigawatts of solar, 370 gigawatts of natural gas, and 110 gigawatts of coal. Fossil fuels are projected to supply 51 percent of incremental generation for data centers by 2050.

Grid-scale battery installations reached 112 gigawatts worldwide last year. BloombergNEF projects that figure will nearly triple by 2035.

The report tested two scenarios on countries' dependence on energy imports. Under an economic transition scenario, every country would reduce reliance on foreign energy. Under a net-zero scenario, every country could virtually eliminate such reliance. Kimmel said the transition is cost efficient and good for energy independence.