We use cookies that are necessary to make our site work as well as analytics cookie and third-party cookies to monitor our traffic and to personalise content and ads.
Please click “Cookies Settings” for details on how to withdraw your consent and how to block cookies. For more detailed information about the cookies we use and of who we work this see our cookies notice
Necessary cookies:
Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website and cannot be switched off in our systems. You can set your browser to block or alert you about these cookies, but some parts of the site will then not work. The website cannot function properly without these cookies.
Optional cookies:
Statistic cookies help website owners to understand how visitors interact with websites by collecting and reporting information
Marketing cookies are used to track visitors across websites. The intention is to display ads that are relevant and engaging for the individual user and thereby more valuable for publishers and third party advertisers. We work with third parties and make use of third party cookies to make advertising messaging more relevant to you both on and off this website.
Unstoppable solar: the sun drives the energy transition
Élise Beaufils, Deputy Head of Sustainability Research, LOIM at Lombard Odier Investment Managers (LOIM)
Published in Handelszeitung on 11 March 2025
Falling costs, high modularity and its central role in the transition to net zero make solar technology an attractive investment.
In 2022, electricity made up 19% of the energy generated worldwide, with 17% of that coming from renewable sources. By our forecasts, electricity will meet half of global energy demand by 2050 – with 62% of it coming from solar and wind power plants.
Sign up for our newsletter
Solar energy is already well integrated into the energy mix, accounting for about 6% of the electricity generated globally in 2022. We expect global solar capacity to increase at an average annual growth rate of 16% between now and 2030. This should increase total capacity by a factor of four.
Forecasts suggest the value of the entire target market for small solar installations could increase from USD 51 billion to USD 312 billion between 2022 and 2030. In the case of commercial installations, growth from USD 65 billion to USD 217 billion can be expected.
Our conviction that solar energy can meet future energy demand is based on five main factors
Advantages of solar energy: five growth factors
What is driving this tremendous growth? Solar energy is not only an abundant source of clean electricity. Our conviction that solar energy can meet future energy demand is based on five main factors:
1. Costs: Due to the mass production of components in China, commercial solar projects today have the lowest levelised cost of electricity (LCoE) of all energy sources. In addition, our analysis of capacity factors and the costs of building, operating, maintaining and financing suggests that solar energy will become still more affordable in future.
2. Political ambitions: Due to legislation and reforms in key markets, the expansion of solar energy is expected to accelerate significantly within the next four to five years – China’s pipeline suggests that solar capacity in the country could reach up to 1,000 gigawatts by 2027. This is equal to nearly one-third of China’s total consumption in 2023. Annual installation rates in the European Union are expected to quadruple by 2030. The tax breaks under the US Inflation Reduction Act are also encouraging commercial solar projects.
3. Supply chain resilience: The planned growth in production capacity for polysilicon – the key raw material for making solar modules – far exceeds our forecast for installations. While the strong concentration of the supply chain in China is a cause for concern, we believe export restrictions are unlikely.
4. Feasibility: Compared to onshore wind energy, solar energy takes up very little space. The modules can be installed on areas already used for other purposes, such as residential and commercial properties, storage tanks and outdoor parking spaces.
5. Modularity and scalability: All solar cells are standardised, similarly constructed, and can be combined and used on almost any scale. Applications range from small cells for individual solar lights all the way to large commercial solar parks.
Solar energy will be a key driving factor in the fundamental transformation towards a multi-directional and decentralised energy system
Solar energy will be a key driving factor in the fundamental transformation towards a multi-directional and decentralised energy system. This transition will shift profits from fossil-fuel-based energy producers to providers of renewable energy and manufacturers of the equipment needed for these systems.
The rapid growth of generative artificial intelligence and data centres is also driving energy demand. Between 2022 and 2026 the total energy consumed by data centres could more than double to 1,000 terawatt-hours – this is roughly equivalent to the energy consumption of Japan. For the long term, all indications are that renewable energy sources, and solar energy in particular, have an extremely promising future.
important information
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
share.