Solar Electricity will generate $5 trillion of cumulative revenue by 2035 and break into industrial markets per Deutsch Bank

Deutsch Bank expects solar electricity to become competitive with retail electricity in an increasing number of markets globally due to declining solar panel costs as well as improving financing and customer acquisition costs. Unsubsidized rooftop solar electricity costs between $0.08-$0.13/kWh, 30-40% below retail price of electricity in many markets globally. In markets heavily dependent on coal for electricity generation, the ratio of coal based wholesale electricity to solar electricity cost was 7:1 four years ago. This ratio is now less than 2:1 and could likely approach 1:1 over the next 12-18 months.

Deutsch Bank thinks solar has now become an investable sector and over the next 5-10 years, we expect new business models to generate a significant amount of economic and shareholder value.

Over the next 20 years, Deutsch Bank expects the electricity market to double to $4 trillion and expect the solar
industry to increase by a factor of 10. During this timeframe, the solar industry is expected to generate $5 trillion of cumulative revenue. By the year 2050, they expect global solar penetration rates to increase to 30%. They also see solar penetration rates increasing more rapidly in developing economies. India for example has recently announced targets to reach 100GW of solar capacity by 2022. Current installed generating capacity in India is ~280GW and the total installed generating capacity is estimated to reach 800GW by 2035. Assuming installed generating capacity reaches 400GW by 2022 timeframe, solar penetration would reach 25% of total capacity and nearly 60% of new installed capacity would be from solar sector. We believe the opportunity would be even bigger if companies start adding services to the solar PV offering and venture into adjacent markets such as wind and hydro. Over the next 20 years, they expect nearly 10% of global electricity production to come from solar.

Tesla’s Gigafactory could lead not just the large scale battery market but the large scale use of solar for power industrial factories

Using an average 20% efficiency for rooftop photovoltaic (PV) panels, the Gigafactory’s 10 million square foot roof would produce 850MWh of solar power daily. Lombardo estimates that the Gigafactory would have 85 wind turbines able to generate about 1,836 MWh of power daily.

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