Worldwide investment in solar energy has grown from $11.2 billion USD in 2004 to almost $172 billion USD in 2015. In the U.S., 9,500 large solar projects are currently operating, in construction, or in development. Even places not thought of as “sunny” are becoming viable locations for solar. For example, solar investment New Jersey ranked 7th in 2018 among the 50 states. This is just one indicator of widespread growth in the solar energy industry, and this expansion is due to three primary factors:

  1. Improved Solar Cell Efficiency

A solar cell converts light into electricity. Improved conversion efficiency is one thing driving increased investments. Bell Telephone Laboratories produced a 6% efficient cell in 1954. Commercial photovoltaic cell efficiencies of 15% to 25% are available today. Advanced research is producing cells with efficiencies exceeding 40%. These improvements increase solar power’s viability as an energy source.

  1. Manufacturing Cost Reductions

Another factor influencing investment in solar energy is the declining costs of manufacturing. The renewable energy industry struggled for decades. Part of that struggle was a lack of enough demand to justify ramping up manufacturing. Large prospective customers were reluctant to place orders because they feared the industry’s inability to fill them. The result? Stifled industry growth. In recent years, however, a combination of government incentives and private investment resolved this dilemma, thereby increasing solar energy’s popularity.

  1. Rising Costs of Traditional Fuels

Most generators work by burning a fuel, such as natural gas or coal, in a power plant. The price paid by consumers for electricity depends, in large part, on the cost of these fuels. Prices for natural gas and coal have risen with time, while renewable energy prices have fallen. This dynamic is making solar more competitive and improving its investment potential.

Adoption rates solar energy are high and climbing. The industry as a whole is becoming an economic engine, creating new jobs and opportunities while the potential for continued growth generates attractive investment opportunities. Solar, it seems, has a bright future.