Fortunately, investment bankers from Citigroup believe that the solar and wind industries will grow much faster than previously thought. According to a new report, fossil fuels may only comprise 28% of the energy industry by 2040, down from the 64% share seen today.
This report indicates that solar and wind will grow much faster than an earlier report released by the International Energy Agency (IEA). Reports from the EIA indicated that only 18% of electricity will come from non-hydro renewables in 2040.
The financial experts at Citigroup have found that, by 2020, global solar growth may be 65% higher than the IEA prediction. They predict that PV solar installation rates will be 53 GW between 2013 and 2020, while the IEA only predicts 33-34 GW every year between these years. GTM Research’s PV forecast is greater than both Citigroup and the IEA, finding an average of 75.5 GW per year during the seven years between 2013 and 2020.
The same trend can be seen in wind investment predictions; Citi believes wind installations will be 54 GW every year on average from 2013-2020, while the IEA estimates 38-42 GW. According to Citi’s report, wind will actually be completely economically competitive with fossil fuels by 2020, though solar will take longer to reach this point.
The IEA and the US Energy Information Administration (EIA) are known for intentionally reporting their lowest estimates. It has even been suggested that these governmental agencies rely on poorly-thought-out assumptions and that they have a bias toward fossil fuel interests.
The low estimates could be an effort to hedge their bets in case solar and wind don’t take off as quickly as predicted. However, according to Eric Gimon and Sonia Aggarwal of America’s Power Plan, if costs are constantly underestimated, it will complicate efforts to create quality policy and regulations.