Development, deployment and economics

Beginning with the surge in coal use which accompanied the Industrial Revolution, energy consumption has steadily transitioned from wood and biomass to fossil fuels. The early development of solar technologies starting in the 1860s was driven by an expectation that coal would soon become scarce. However development of solar technologies stagnated in the early 20th century in the face of the increasing availability, economy, and utility of coal and petroleum.

The 1973 oil embargo and 1979 energy crisis caused a reorganization of energy policies around the world and brought renewed attention to developing solar technologies. Deployment strategies focused on incentive programs such as the Federal Photovoltaic Utilization Program in the US and the Sunshine Program in Japan. Other efforts included the formation of research facilities in the US (SERI, now NREL), Japan (NEDO), and Germany (Fraunhofer Institute for Solar Energy Systems ISE).

Commercial solar water heaters began appearing in the United States in the 1890s. These systems saw increasing use until the 1920s but were gradually replaced by cheaper and more reliable heating fuels. As with photovoltaics, solar water heating attracted renewed attention as a result of the oil crises in the 1970s but interest subsided in the 1980s due to falling petroleum prices. Development in the solar water heating sector progressed steadily throughout the 1990s and growth rates have averaged 20% per year since 1999. Although generally underestimated, solar water heating and cooling is by far the most widely deployed solar technology with an estimated capacity of 154 GW as of 2007.

The International Energy Agency has said that solar energy can make considerable contributions to solving some of the most urgent problems the world now faces:

The development of affordable, inexhaustible and clean solar energy technologies will have huge longer-term benefits. It will increase countries’ energy security through reliance on an indigenous, inexhaustible and mostly import-independent resource, enhance sustainability, reduce pollution, lower the costs of mitigating climate change, and keep fossil fuel prices lower than otherwise. These advantages are global. Hence the additional costs of the incentives for early deployment should be considered learning investments; they must be wisely spent and need to be widely shared.

In 2011, the International Energy Agency said that solar energy technologies such as photovoltaic panels, solar water heaters and power stations built with mirrors could provide a third of the world’s energy by 2060 if politicians commit to limiting climate change. The energy from the sun could play a key role in de-carbonizing the global economy alongside improvements in energy efficiency and imposing costs on greenhouse gas emitters. "The strength of solar is the incredible variety and flexibility of applications, from small scale to big scale".