Renewable energy is generally defined as energy that comes from resources which are naturally replenished on a human timescale such as sunlight, wind, rain, tides, waves and geothermal heat. Renewable energy replaces conventional fuels in four distinct areas: electricity generation, hot water/space heating, motor fuels, and rural (off-grid) energy services.
Renewable energy resources exist over wide geographical areas, in contrast to other energy sources, which are concentrated in a limited number of countries. Rapid deployment of renewable energy and energy efficiency is resulting in significant energy security, climate change mitigation, and economic benefits. In international public opinion surveys there is strong support for promoting renewable sources such as solar power and wind power. At the national level, at least 30 nations around the world already have renewable energy contributing more than 20 percent of energy supply.
Higher cost of project financing and lower cost of natural gas, both outgrowths of the current economic setup, have made it tough for the solar industry in recent months. However, the key long term industry variables continue to be strong with countries continuing to implement solar-friendly incentive and feed-in tariff programmes. Continued demand for clean and renewable energy is expected to drive solar energy costs towards grid parity in the next couple of years. Moreover, the drop in prices for solar power equipment could make solar energy more competitive with burning fossil fuels to generate electricity. Currently less than one per cent of the world’s electricity comes from solar power. While investors are very selective due to the low finance availability, they still see PV as a low-risk asset class.