The global solar power market is expected to grow from $234.86 billion in 2022 to $373.84 billion by 2029. The news outlets are screaming “solar” day in day out but for companies operating in the solar energy sector, this is a time of increased mobilization, as the industry is relatively young and full of challenges. In this guide, we take these problems head-on to furnish you with exclusive advice on tackling the pending issues troubling the solar energy market players. Let’s get to it then.
Table of contents:
- Context and challenges
- How can solar photovoltaic energy companies harness technology to face the challenges?
- Tips for solar energy sector companies to squeeze the most out of tech solutions
- Final thoughts
Solar energy sector companies have been faced with a number of challenges affecting their business going forward. From an increased demand for solar panels, emphasis on the effectiveness of energy production to the challenges of environmental costs, sustainability, law, and politics, the pressure is on business owners to live up to these problems. Let’s take a closer look at them.
Increasing demand for solar panels
The combined effect of the war in Ukraine, the climate crisis, inflation, and high fossil fuel energy prices has strengthened the meaning of renewables in the global energy market. While fossil fuel energy still constitutes the majority in the global energy mix, we cannot help but look to alternatives to coal, gas, and other fossil fuels, especially amid skyrocketing prices. In that sense, a cost-effective alternative like solar is not only an observable market trend but also a geostrategically important energy source. The proof is in the pudding. Specific year-to-year data on coal and gas prices shows a rising tendency in the prices of these fossil fuels from 2021 through 2022.
In the first half of 2022, gas prices in Europe rose fourfold and coal more than threefold from the same period in 2021, resulting in wholesale electricity prices more than tripling in many markets. Our price index for major global electricity wholesale markets reached levels that were twice the first-half average from 2016 to 2021.
Electricity Market Report - July 2022. Source: International Energy Agency
With the spotlight on the price of electricity from solar energy, let’s take a look at the specific data. While the solar energy market is defined by a number of technologies such as photovoltaic panels, solar heating, concentrated solar power (CSP), passive solar technology, and solar process heat, in this guide, we will focus primarily on solar photovoltaic (PV) systems which accounted for 70% of the global solar power market share in 2020.
On top of that, following 10 years (2009-2019) of dropping prices in the utility-scale solar PV sector, solar photovoltaic energy now represents the arguably most economically promising energy source in utility-scale energy when looking at prices alone. The price of electricity from utility-scale solar photovoltaic declined by 89% in these 10 years, as Our World In Data shows.
Lazard Levelized Cost of Energy Analysis, version 14.0.
Infographic by Sara Chodosh. Source: Popsci
The turn to solar photovoltaic energy is also visible in the demand for solar PV. A global demand for solar photovoltaic power has more than doubled since 2015 (from 51 gigawatts in 2015 to 127.8 gigawatts in 2022), according to Statista. With slight fluctuations, the global demand for PV energy is expected to amount to 122.5 gigawatts in 2023.
The need for PV energy projects is also strengthened by the fact that the world's largest economy is investing in renewables. According to the New York Times, the US government will issue $98 billion of tax credits to boost electricity production from renewable or non-carbon sources thanks to the Inflation Reduction Act. There's no denying the high momentum for solar photovoltaics is driving the solar market's growth. But what does it mean for businesses operating in the PV sector?
Growth of the solar market and the need for competitiveness
While high demand for solar photovoltaics is a business opportunity for many companies, such dynamic circumstances may be a challenge, with increased demand propelling the competition for clients in the PV sector. Is it possible that these firms will have to swim in deep water soon? Let’s look at the data.
The solar energy market is a job creation powerhouse, as United Nations data shows.
Solar energy was found to be the fastest-growing sector. In 2021 it provided 4.3 million jobs, more than a third of the current global workforce in renewable energy.
Source: UN News
When we look at the European Union (EU), the employment of full-time personnel in the EU's solar industry rose by 23% from 2020 through 2021. That, in turn, creates a number of career opportunities for solar engineers designing solar projects and solar energy technicians installing solar systems on-site. What’s more, a renewable energy engineer responsible for the design, development, and maintenance of renewable energy sources is among the most-in-demand engineering jobs for 2023, according to a technical industries employer BMR Solutions.
In this intense solar market development environment, one may argue that the companies operating in this vertical need to accelerate their growth to grab the opportunity to satisfy the increased demand.
The largely sustained growth of the solar photovoltaic industry in 2023 will most likely cause the market participants to sharpen their competitive advantage against fellow solar photovoltaic energy companies. That’s because the high demand for solar PV energy triggers a higher solar PV power supply. According to International Energy Agency (IAE) data on solar photovoltaics, “power generation from solar PV increased by a record 179 TWh in 2021, marking 22% growth on 2020.”
Moreover, the IAE insights show that while solar photovoltaic currently accounts for only 3.6% of global power generation, it’s still the third largest renewable electricity technology (after hydropower and wind). Additionally, the pressure on this market sector will be heightened due to net zero goals adopted across the world. All that, combined with the market growth dynamics presented earlier, accelerates the tempo of competition between companies.
Solar PV power generation in the Net Zero Scenario, 2010-2030. Source: International Energy Agency
It’s thus essential for solar PV energy firms to invest in new client acquisition, effective customer services, and process flows, especially when these companies will tend to compete and grow. In that context, optimizing sales processes of solar PV energy assets becomes crucial as well.
Effectiveness of energy production
Even though solar energy is a renewable energy source, companies operating in this sector are currently facing problems related to the most effective energy production. Let’s look at some of them.
- Physical space limitations
One of the challenges related to utility-scale solar photovoltaics is limited space. To build and maintain a large solar PV power plant, companies need significant areas of land which are scarce in infrastructure-packed city centers. One answer to this problem, as Fuergy notes, lies in novelties such as solar rooftops and transparent PV glass which present an alternative to this space limitation. What’s significant, such photovoltaic systems can be used both at scale and in smaller household setups, e.g., for residential purposes.
- Mismatch between the peak generation and peak demand (aka. storage challenge)
The timing of the sunrise in the morning and sunset in the evening, with peak solar power generation in the afternoon does not correspond with the highest demand for it (which is when the sun sets), according to Fuergy. This means we need to have highly efficient ways of storing excessive solar energy for peak demand times to cater to needs at any time. Another solution proposed by Dezeen magazine is to plan energy management and infrastructure around the predictable factors related to solar power generation.
- Enough access to sunlight
The amount of the solar energy we can receive varies depending on weather conditions, geographies, and the type of solar setup. In terms of smaller-scale solar PV installations, one may argue you need sunny weather to reap the most solar power, while for efficient large utility-scale solar power plants, companies look to high-sunlight desert or semi-desert areas where many of the world’s largest solar power plants are located. Finally, when it comes to the type of solar system used, there are also solar power plants tracking the sun’s position for the best solar energy capability.
Environmental costs & sustainability
The development of the solar energy market is, to an extent, a means to achieve at least some of the 17 Sustainable Development Goals adopted by the United Nations Member States in 2015.
17 Sustainable Development Goals. Source: United Nations
However, there is always a price to pay for innovation. In the case of solar PV panels, this price lies in health hazards and pollution risks. Compounds such as lithium, silicon tetrachloride, cadmium telluride, and copper indium selenide, used to manufacture solar energy assets, are potential environmental pollutants, not to mention their toxicity for human health. To take one example, lithium (used among others in solar batteries) can pollute tap water and irrigation water in areas where lithium batteries are not utilized.
Effective utilization of solar waste is also a challenge in itself, as “the global volume of solar-panel waste generated annually will rise from 30,000 metric tons in 2021 to more than 1 million tons in 2035”. Therefore, solar energy industry companies must handle these compounds with reason, care, and according to regulations as well as circular economy best practices. That way, these pollutants won’t pose a danger to ecosystems and communities.
Law-related and political context
The actual implementation of solar energy solutions depends heavily on governmental incentives for such projects, and these vary from country to country. For example, even in the EU where the EU-issued laws apply, countries have different local laws that specifically shape the extent of support for solar energy industry companies. What largely define the actual business activities of solar industry entities are country-specific tax exemptions, energy policies and laws, and state-regulated promotion activities for the solar energy sector.
A notable example comes from Europe where the level of state support for green energy projects can vary dramatically. While in Poland the rebate system for prosumers was revoked in December 2021 in favor of the often-criticized net billing, in France legislation was approved to "require all large car parks to be covered by solar panels."
Some of the above-mentioned challenges for the PV sector can be tackled more easily with the use of software. Below you will find some of the tactics employed by companies that have launched successful solar products and services supported by software solutions.
Follow and implement innovations
The boom on solar energy and particularly the cheap photovoltaics has presented the PV market with countless growth opportunities. It also forced the photovoltaic industry companies to innovate to stay competitive, keep attractive prices, and maintain the client base amid the current global recession.
The vast number of innovations in the PV industry and the fact that the total corporate funding for solar more than doubled in the first half of 2021 (compared to 1H of 2020) make the need to innovate a must for PV industry players.
Let’s look at the various innovations in the PV industry. These days, the leading solar PV technology is wafer-based crystalline silicon (c-Si). However, research and development in the PV industry prompt other new developments that can propel the growth of the solar photovoltaic industry and its economic potential, presenting a potential alternative to silicon or new ways of using (or reusing) it across market segments.
Selected solar photovoltaic innovations driving the development of the solar PV industry:
- Thin-film photovoltaic technology (mostly cadmium telluride (CdTe) and copper indium gallium diselenide (CIGS) solar cells),
- Perovskite photovoltaics,
- Solar glass (also transparent PV glass),
- Floating photovoltaics (PV on water),
- Building-integrated photovoltaics (BIPV), e,g. rooftop solar,
- Agro-photovoltaics (also Agri-PV or agrivoltaics)
- Vehicle-integrated photovoltaics (VIPV), e.g. solar car roofs.
- Bifacial photovoltaics (bifacial PV),
- Recycling and reusing outdated solar panels.
Speaking about innovation in solar in general, it’s worth noting that space-based solar power programs are currently under development in various parts of the world, including the UK and the USA. According to Martin Soltau, the co-chairman at Space Energy Initiative (SEI) in the UK, a constellation of satellites harvesting solar energy from space could theoretically cover total global energy demand for it; however, that could be happening as soon as 2035. Want to know how our software complemented a radical innovation like the solar-powered world’s first automatic field robot for seeding and weed control? Check out Merixstudio’s Product Stories about FarmDroid.
Invest in energy asset and billing management systems
As a photovoltaic asset producer or solar sector service provider, you need performant software that enables your apps’ users to reap the most benefit, regardless of their level of expertise. That’s where energy asset systems and utility billing platforms come in handy. Here are a few examples of how these systems can empower your users.
- Household energy management software
When working on an energy management platform for household users who need to be fully informed about the state and functioning of their energy system, we chose the following energy management app functionalities, having these users in mind:
These, in turn, allowed for realizing the functional goals of the platform, some of which are listed below.
☀️ Examples of energy management software’s functional goals:
- CO2 impact tracking,
- Energy management data visualization (incl. charts or graphs with statistics),
- Information about average savings on electricity bills,
- Overview of solar energy production, export, and the percentage level of energy self-sufficiency,
- Solar battery usage level and the duration of solar energy production vs. battery charging,
- Overview of the energy consumption of all home appliances and installations,
- Visual overview of the solar panel system and its health,
- Solar panel system malfunction reporting option,
- Instant contact options with a given solar panel system’s contractor.
Sample energy management app views
Interested in energy management software? Check out our energy management app Behance case study.
- Utility billing systems
Innovative energy production systems like photovoltaics often go hand in hand with functional utility billing systems, providing an overview of all utilities’ costs incurred and their sources. This way, your users have all the necessary information about their utility bills at their fingertips. Apart from billings for sewage, gas, electricity, and water, such platforms can also include meter readings, invoicing data, forms, and many more — depending on specific use cases and software requirements.
- Solar tracking system tilt automation
Solar tracking system tilt automation allows for automatically adjusting the tilt in your solar tracking system to the direction from which the sun rays come to maximize the photovoltaic energy efficiency. To create a computing setup that allows this, rely on solar tracking system contractors or outsource platforms’ execution to software teams specializing in services for the solar energy sector.
- Photovoltaic system remote monitoring
Remote monitoring allows users to know exactly when a failure happened in their PV system and be able to start repair works as soon as possible. The idea behind such platforms is that they are user-friendly, intuitive, and uncomplicated. They might require various data or PV system visualizations to provide the most practical value. Want to know how to execute powerful dataviz in a highly complicated knowledge domain? Check out our impact data analysis platform Behance case study.
Sample data visualization views from the Biocore MGS Behance case study.
Source: Merixstudio’s Behance webpage
So, we know innovations and energy asset and billing management systems hold powerful usability-related advantages for companies from the solar energy sector. What else is there?
Streamline sales processes and end-customer experience
Good old spreadsheets might not be enough to close sales deals that come your way, especially in fast-growing companies. To that end, investing in streamlining your sales processes with the right digital assets pays off.
Here are some benefits of using solar energy industry sales software:
- Simplified ordering and sales processes due to the minimization of sales representatives’ manual work,
- Possibility of integrating the software with other company systems and tools,
- Clear data presentation thanks to dataviz,
- Possibility of showing an overview of sales deals for the management,
- Usually faster photovoltaic proposal generation (as compared to manual processes),
- Visually attractive solar system modeling,
- Boosted marketing activities, thanks to using highly interactive and responsive web and mobile apps.
Aside from taking care of those who use your software internally, don’t forget to polish the digital experiences of your end users. To do that, you can rely on software experts who harness top UX revamp tools and techniques like user research, UX audits to manage UX debt. If the UX and UI enhancement process caught your eye, check out our How we do IT series on improving a given app’s UX and UI.
Scale and optimize software
Working out a way for your solar market digital products to operate at scale is challenging, but it gets easier once you use the right tactics along the way. Here are some of them!
- Cloud migration or existing cloud setup optimization
When looking for trusted, future-proof solutions that answer the digital pains of scale-ups, the cloud is an obvious choice. Due to the prospect of faster time-to-market, virtually unlimited data storage, or the possibility to manage virtual resources at scale at any time (which is particularly important for peak demand times like those affecting the solar market), cloud computing may be a viable option for your growing solar business.
- Scalability-oriented solutions
If you know your solar energy sector business is growing, naturally, you’d want your software to be adjustable to changing needs, too. Based on our experience in delivering scalable software products at every stage of the lifecycle, we recommend using top software tools, techniques, and methodologies to ensure the stable growth of your app. These include microservices, Test-Driven Development, and automation tools described in the Tips for solar energy sector companies section below. Considering scaling up yourself? Dive into our comprehensive ebook on building scalable web apps!
- Addressing connectivity challenges
Software for solar photovoltaic systems should be able to work in any area, regardless of the possible network availability challenges. This is especially important for solar energy companies operating their businesses in remote locations with low connectivity. To address such problems and keep users at your digital product at all times, you may implement an offline mode. This functionality is known to give companies a competitive advantage and boost user experience. A way to go in a competition-driven market, isn’t it?
- Optimizing data transmission options
Companies scaling up their operations often need to connect their existing software systems with external, third-party services (such as payment providers or databases). To that end, it is advisable to use tried-and-tested tools like API integrations, IoT enablements, or data science. Doing that ensures your existing tech setup works smoothly with external resources to complete your business goals.
Existing software sometimes needs modernization, be that because of UX or tech debt that has accumulated in your apps over the years. If that’s your case, it’s worth remembering that there are different levels of modernization, and launching a software revamp endeavor doesn’t necessarily mean you have to stop the company’s growth for the project’s duration. In fact, system revitalization projects can enable companies to modernize and grow at the same time - just like was the case with our collaboration with a company from the energy sector.
So, we know the software and the tech sector can provide relief for companies struggling with the current challenges of the solar industry. Here are a few tips for digitally-oriented companies on how to squeeze the most out of tech solutions aimed at the solar sector.
Automate and minimize manual processes to boost effectiveness and stay competitive
Automation of processes is the backbone of modern industries, software included. That’s because an investment in automation is likely to pay off in optimized operations, and who wouldn’t want a return on their investment? If you have an existing digital product that is about to undergo scaling up and, therefore, needs new add-ons or tech setup modifications, make sure you’ve considered the benefits of automation.
When processes are automated, the effectiveness of new features’ deployment significantly rises. Also, software tools for automation free up internal developer teams, so that they can focus on other tasks at hand. To introduce automation, you can use Continuous Integration/ Continuous Delivery (CI/CD) pipelines, Machine Learning algorithms, cloud computing, DevOps engineering, automated Quality Assurance processes. To give one example, when Etsy introduced a fully automated deployment pipeline, they switched from four-hour full-site deployments twice a week to more than 50 deployments a day. If you don’t have internal teams to cover automation efforts, an experienced, reliable software partner will be able to help.
Not only does automation increase efficiency. Removing manual processes by means of software solutions provides tangible effects, too. Here’s what our client had to say about the software we created:
The software increases my efficiency (because it has all the information in the same place and I don’t have to manually pull it down and then compare it all) at least by a factor of four times faster than the earlier process.
The impact of software on process efficiency. Source: Biocore LLC
Keep user focus from day one
Extrospection aimed at satisfying users' needs is key when developing software for solar or any other industry. When it comes to solar energy sector businesses, different users may call for different solutions.
Selected types of software users in the solar energy industry:
- Sales representatives of solar PV panels,
- End clients using solar energy price comparison tools,
- Solar energy plant decision-makers utilizing advanced analytics and dataviz,
- Household users buying smart home software,
- Solar energy technicians setting up smart home appliances,
- Analysts and data scientists using utility-scale solar energy reporting applications.
One way to stay focused on user needs is by engaging in user research during discovery workshops when designers map users’ challenges, expectations, and the software platform’s business goals. As it happens, we used exploratory product workshops in our collaboration with Selfmade Energy which proved invaluable in terms of determining the most needed features.
Prioritize new features deployment
Importantly, your internal IT team or software provider should remember to prioritize user experiences and feature deployment, for example, in terms of primary and secondary users. Considering both the short- and long-term consequences of providing new add-ons is also indispensable. After all, you wouldn’t want to create a Frankenstein app by giving all features, all users, and all problems equal importance during development. If you’re interested in learning more about this topic, check out how to add new app features and not hurt the usability of your mobile product.
One of the prioritization strategies that’s often used in the context of new features is called MoSCoW. Assigning must-have, should-have, could-have, and won’t-have categories within this framework gives your teams a clear overview of the most essential features per development phase.
MoSCoW prioritization technique exemplified
Go for software experts with broad experience, incl. the solar energy market
Lastly, embarking on a journey of rapid solar industry company growth, ensure you have experienced, reliable software experts capable of comprehensively handling the software services scope. What’s also important is the ability of your tech partner to increase the level of ownership whenever the need arises.
When faced with the challenge of choosing software teams to develop your solar energy software, you might be faced with the dilemma: hire in-house or outsource? Here’s our take on team augmentation vs. in-house hiring. Whatever option you choose, however, make sure the people you bring in have the capabilities you need. Based on our experience in the solar energy industry, we cherrypicked some of the key expertise required to deliver software solutions for this economy sector to make it easier.
Selected software capabilities typically needed to develop solar energy sector apps:
- Designing and developing responsive and highly interactive web & mobile applications,
- Creating solar energy data analytics and visualization dashboards,
- Executing complex mathematical setups as the basis for energy sector digital products,
- Developing solar energy assets-related calculators (e.g. solar rooftop calculators),
- Creating solar energy sales software for calculations, proposals, and precise simulations,
- Setting up scalable and performant infrastructures for sensor data management,
- Developing web tools for monitoring solar energy consumption,
- Integrating solar energy industry software with 3rd party tools and devices.
- Modernizing existing legacy software to accommodate intense company growth.
Needless to say, it’s best if your software provider has experience specifically in the solar energy industry. That way, you know they can use tried-and tested tools and methods that have been instrumental in delivering similar solar energy digital products for other clients.
Overall, the solar energy market and its powerful PV segment are destined for growth. To stay on top of their game, solar photovoltaic sector companies need to be able to compete by means of top products. Given the current challenges for the solar energy market for the year 2023, we strongly believe that software is one of the most effective ways to stay competitive and generate more sales.
If you want to build, scale up, or modernize your solar software, check out how we digitalize solar energy companies, and let’s talk business.