The rapid growth of solar and wind power in recent years has breathed hope into global efforts to reduce greenhouse gas emissions and limit the most dangerous effects of climate change.

In 2010, solar and wind combined made up only 1.7% of global electricity generation. By last year, it had climbed to 8.7% — far higher than what had previously been predicted by mainstream energy models. For example, in 2012 the International Energy Agency expected that global solar energy generation would reach 550 terrawatt-hours in 2030, but that number was exceeded by 2018. These models often assume that the growth of solar and wind will be linear, but in reality the growth has been exponential.

Understanding the exponential growth of renewable energy in the past gives us reason to be more optimistic about how fast it can ramp up to meet climate goals in the future. This article explains the reasons behind solar and wind’s growth, how much progress has already been made, and what’s needed to go even further.

Why is Renewable Energy Growing so Fast?

Falling costs have been the biggest factor in the explosion of renewable energy. Since 2010, the cost of solar photovoltaic electricity has fallen 85%, and the costs of both onshore and offshore wind electricity have been cut by about half. Both of these renewable sources are now cost-competitive with fossil fuel electricity.

Costs have fallen so dramatically due to positive feedback loops. The more that renewable energy technologies are deployed, the cheaper they become due to economies of scale and competitive supply chains, among other factors. These falling costs in turn spur more deployment. For example, in the past decade, each time that the amount of solar capacity deployed worldwide has doubled, the price of installing solar capacity has declined by 34%. As renewable energy technologies are modular and standardized, cost improvements or technological advances made in one place can be quickly copied elsewhere.

Other aspects of renewable energy deployment are also self-reinforcing. As renewables grow in popularity, expand their political influence, and attract more finance, it becomes easier to leverage further policy support and finance. As financiers become more familiar with the technical and project risks of renewable energy, the cost of capital has decreased. In addition, evidence suggests the spread of renewable energy is socially contagious — when one house installs rooftop solar, the neighbors who see it and talk about it are more likely to install rooftop solar themselves.

Policy support has also been essential for the growth of renewable energy. Renewable energy tax credits and subsidies, feed-in tariffs, and competitive auctions have all helped reduce costs and spur deployment. And government investment in research and development has been essential in promoting innovation in renewable energy. China, Europe and the United States have become leaders in solar and wind through policy support, and worldwide, 165 countries have targets to increase renewable energy. It’s not just countries either; more than 600 cities worldwide have 100% renewable energy targets.

Timeline of Renewable Energy Growth

Wind energy first took off in the early 2000s, while solar energy took off about a decade later but has been growing even faster than wind. The factors driving the growth in renewable energy have been systemic, but certain key moments have reflected the larger trends or acted as turning points in renewable energy adoption.
 

Key Milestones in the Exponential Growth of Solar and Wind Energy

 

Event

Details

2000: Germany introduces Renewable Energy Sources Act. The act includes feed-in tariffs to incentivize renewables investment, electric grid priority for renewable electricity over conventional sources, and a 100,000 solar roofs program. As a result, Germany becomes an early leader in both solar and wind.
2009: The U.S. and China invest big in renewable energy in stimulus packages. In response to the global financial crisis, the U.S. announces more than $30 billion in renewable energy tax credits, grants and loans. China provides credit for solar manufacturers and implements nationwide solar feed-in tariffs and subsidies. 
2014: RE100 launches to bring companies together to implement renewable energy. Through this collaborative global initiative, hundreds of companies have committed to 100% renewable power targets and received technical guidance.
2015: Solar photovoltaic costs reach cost tipping point. After falling nearly 70% in just five years, the cost of solar reaches $0.117/kilowatt-hour (2020 US$ equivalent), which is well within the range of being cost competitive with certain fossil fuel power. This had earlier been achieved by onshore wind power.
2015: Solar and wind increase faster than fossil fuels. Spurred by costs declines and rising investments, for the first time in history there is more growth in solar and wind capacity than in fossil fuel capacity (calculated using BNEF data)
2015: Signing of Paris Agreement and launch of International Solar Alliance. The Paris Agreement increases ambition for climate action and many countries include renewable energy in their climate plans. The prime ministers of India and France announce a new International Solar Alliance to promote solar energy among nations that have high solar power potential.
2017: Investment in wind and solar reaches record $300 billion. Since then, it has stayed at approximately this level or a little lower. Even with steady levels of investment, the amount of capacity installed has continued to increase as efficiency gains and falling costs mean each dollar of investment leads to more capacity now than it did in the past.
2018: 53 countries commit to 100% renewable energy. The number of countries with 100% renewable energy targets (either economy-wide or for specific sectors) continues to climb upward. On the subnational level, 247 cities and 33 states or regions have made 100% renewable energy commitments by this date.
2020: Renewable energy remains resilient despite the COVID-19 pandemic. During the pandemic the global use of coal, gas and oil for electricity fell, yet renewable energy was resilient. Wind power grew 12% and solar power grew 23% in 2020, and are on track to set new records in 2021.
2021: Renewable energy significantly undercuts coal. New solar and wind projects are not only cheaper than building new coal plants, they are cheaper than operating many of the cheapest and least sustainable existing coal-fired plants.

 

Understanding S-curve Growth Dynamics 

According to the International Energy Agency, to limit global warming to 1.5 degrees C, renewables will need to reach 61% of global electricity by 2030 and 88% by 2050, with solar and wind making up the dominant share. 

Reaching such high levels of renewables sounds daunting, but is less so when you consider the power of exponential growth. The market share of solar and wind in global electricity generation grew at a compound average annual growth rate of 15% from 2015-2020. If exponential growth continued at this rate, solar and wind would reach 45% of electricity generation by 2030 and 100% by 2033. 

Problem solved? Not quite. Historically, technologies that are growing exponentially have a “top speed” for growth — a maximum growth rate that is achieved, that lasts awhile and then slows down as it approaches 100% adoption. This pattern is known as an S-curve.   

A new article in Nature Energy attempts to find out what that top speed is for solar and wind energy growth by looking at the countries that are furthest along and have already reached the steepest part of the S-curve for either solar or wind. 

They find that in the countries where solar growth has stabilized at a maximum rate, that growth has been on average 0.6% of the total electricity supply per year. This is lower than the 1.4% annual rate needed globally to meet the 1.5 degrees C goal of the Paris Agreement, according to their own benchmarks. Chile is the only country with a mature solar market where the maximum growth rate has been higher than what’s needed. 

Meanwhile, in the countries where onshore wind growth has stabilized at a maximum rate, that growth has been on average 0.8% of the total electricity supply per year, which is lower than the 1.3% annual rate needed globally. Only a handful of countries with mature wind markets have had maximum growth rates higher that what’s needed, including Ireland, Portugal, and Brazil. 

Countries like these prove that growth this rapid can be achieved — but the key will be to sustain high maximum growth rates and do it globally, not just in select countries with ideal conditions.

What Will Happen to Renewable Energy in the Future? 

Despite clear momentum, it does appear that growth in renewables must accelerate, though much uncertainty remains over how much acceleration is needed. 

More policy support is needed to make sure that the renewable energy adoption follows an S-curve and grows fast enough to meet the Paris Agreement’s goals. All countries, including those that are not yet leaders in this sector, will need to incentivize rapid deployment and keep reducing costs. 

The graphic below illustrates one potential pathway for how solar and wind could reach the climate targets needed to limit global warming to 1.5 degrees C. This is not the only shape an S-curve could take to meet the targets, nor necessarily the most likely, but it gives a general sense of what’s needed.

Possible Pathway for Solar and Wind Growth to Align with the 1.5 degree C Goal

Governments should set targets and requirements for the use of renewable energy. Currently these are most common for the power sector, but they should also be applied to other end-use sectors like heating and cooling, industry and transportation. Governments will also need to increase the flexibility of the electricity grid to accommodate renewables, for example by investing in long-range transmission lines and introducing new energy storage technologies. 

Despite the challenges that need to be overcome, non-linear change is a powerful force. If we time-traveled to a decade ago, energy industry experts would be shocked to hear how much renewable energy costs have fallen and how yearly deployment has quadrupled. How shocked will we be in 2030? That depends on what we do today.

Editor's note: this article was updated on 10/5/22 to reflect the latest findings from the Climate Action Tracker.