Climate Change and Solar Industry Relation and Revelations

In the last 130 years, fossil fuel extraction and consumption has led to increase of global temperature. Daily CO2 emission levels stand at 406.47 ppm (parts per million globally) and with population increasing (7.7 bn in 2019), pollution: which is causing climate change will surely show much severe results in the near future. Research shows that in 2018, CO2 emissions have increased by 2.7 % in 2018 as compared to 2017 YoY basis. Research shows that continuing with fossil fuel consumption will increase CO2 emissions from 32.3 billion (in 2012) to nearly 35.6 billion metric tons (by 2020). Understanding the present situation and the future if we continue to use fossil fuel, the world is opting for green energy transition.

Global Effect

Global energy related CO2 emissions are estimated to increase at an average of 1.0% from 2012 to 2040. Data indicates estimated increase in emissions in countries like- Mexico and Chile by 1.1%/year and 1.0%/year increase in South Korea. While estimated increase in CO2 emission in the US showed 0.3%/year increase, EU stood just behind them with 0.2%/year increase in CO2 emissions. From 2012 to 2040, Asia is suspected to 59% growth in CO2 emissions and India is suspected to show 2.7%/year increase in CO2 emissions from 2012 to 2040. This presents a significant threat to the whole world, and clearly urges for a much faster approach towards green energy transition.

The Relation: Why Solar Energy?

Since more than 80% of the CO2 emission is derived from fossil fuel generation and consumption, the only way to restore the climate is through green energy transition.  Solar power is being championed globally as the most feasible and viable green energy source that could replace fossil fuel. It is important to highlight that 1 KW of green energy can reduce more than 3,000 pounds of CO2 (annually).

Fossil fuel based pollution has been poisoning our land, air, and water for decades and now the effects of climate change are surfacing as a result. On the other hand, solar energy usage can considerably reduce climate degradation/change, which is directly responsible for health issues such as- breathing problems, neurological damage, premature mortality, heart attacks, and cancer.

Not just climate, solar energy usage can impact economy very positively, bringing investment within the country, creating jobs, improving industrial structure, and up grading energy infrastructure. Solar power production also guarantees energy security. By investing in solar energy a country can satisfy its growing energy demand and save money by reducing fossil fuel based import expenses.

Currently, countries are opting for solar energy. And with global acceptance for solar rising, technological growth within the solar panels sector is seen, resulting in shrinking costs of solar equipment. In some countries, solar energy is very close to reaching cost parity with conventionally generated energy. Increasingly, effective government policies support investor confidence and these markets are expanding.

India, which is one of the three countries (India, US, China) who are suspected to contribute nearly 70% of global CO2 emissions in the future, have taken the path towards green energy transition.


The Revelation

It is easy to interpret that a much faster and worldwide green energy transition is required to stall and eventually reverse effects of climate change, influenced by fossil fuel consumption. For that to happen cross country collaboration, favourable policies and more investment in solar power sector is needed. However, it is not all. Currently, it has been noticed that increase of pollution within air is hindering solar energy generation.

Princeton University researchers have found out by using NASA satellite data that sun’s radiation is being reduced by aerosol components in the air. Increase of particulate matter within the air is suspected to reduce solar energy generation by up to 1.5 kWh/ per square meter/daily in China. Leading to a 35% drop of production capacity in most promising photovoltaic areas (eastern province of Shandong) within China.

Pollution has resulted in 15-25% solar energy yield loses in Baghdad and Singapore last year. And in India rising dust and particulate matter is reducing energy yield by 17-25%. For example, we can highlight that in Delhi, India (city with one of the highest air pollution levels in the world) air pollution has led to 12% per year solar yield loss (from 2017).

This presents revenue losses as reduction in energy yield is sometimes higher than the profit margins of some installations. Revenue loss in Delhi stands at $20 million annually, while another city in India- Kolkata has witnessed $16 million in revenue from the same.

This situation speaks volumes about the necessity for faster solar panels installation within countries to scale down fossil fuel usage. The opportunity in guise of global acceptance is already here. All there is left is to take charge and invest in solar for a brighter and sustainable future for the growing world.


By Mr. Rajendra Kumar Parakh

Chief Financial Officer, Vikram Solar