Floating Solar May Play Major Role in Green Transition

By the EMIS Insights Editorial Team

Solar photovoltaic is a major pillar of the global green transition and floating solar farms are a recent development that has been gaining popularity. By 2031, the global floating solar (FPV) market is seen exceeding the 6 GW threshold, as photovoltaic developers seek alternatives to traditional technologies in a bid to meet the growing solar demand, Wood Mackenzie predicted.

The consultancy expects 15 countries to have more than 500 MW of cumulative FPV installations by 2031.

The FPV industry is driven by limited land availability and growing land costs for ground-mount solar projects, since floating solar farms are built on bodies of water, such as dams, wastewater treatment ponds, etc. Moreover, floating solar installations do not require tree removal and forest clearing, which is often the case with solar panel installations. 

The cooling effect of the bodies of water has the added benefit of improving the performance of solar panels by between 5% to 10%, according to various studies, which, in the long run, translates into significant savings. This phenomenon works the other way around too, as solar panel installations provide shade to the water basins and in effect reduce evaporation, which is especially beneficial to areas prone to droughts.

Another advantage of FPV is the lower cost of labour, materials and maintenance. FPV installations are quick to build and are expected to play a key role in meeting the global renewable energy targets.

In March 2023, pv magazine published the results of an international survey that calculated the potential for floating solar across the world. The survey showed a generation potential of 9,434 TWh per year across 114,555 global reservoirs, with 30% of their area covered. The US ranked first with 1,911 TWh per year of potential, followed by China with 1,107 TWh per year and Brazil with 865 TWh per year.

“Globally, the highest regional potential tends to be concentrated in parts of the United States, eastern Brazil, Portugal, Spain, northern South Africa, Zimbabwe, India, and eastern China,” the researchers said as cited by pv magazine.

The survey also showed that the FPV potential of 40 countries exceeds their current annual electricity demand. For example, Brazil’s 538 TWh per year of electricity demand can be fully covered by potential FPV generation of 865 TWh per year. Zimbabwe, Laos, Ethiopia, Cameroon, Myanmar, and Sudan also have considerably higher FPV electricity potential than current demand, according to the study.

At present, China, Singapore, and Thailand have the largest operational floating solar installations, ranging from 45 MW to over 300 MW in capacity. 

For Southeast Asia in particular, solar capacity is a cornerstone of the green transition process and FPV is on the cusp of mainstream expansion, posed to play a pivotal role in the region. Countries such as the Philippines, Indonesia and Thailand are expected to be at the forefront of FPV trend.

Land scarcity is a major challenge in Southeast Asia because of the massive use of land for agriculture. As the countries in the region are struggling to find suitable sites for solar installations, FPV has emerged as a viable alternative. 

Rystad Energy data shows that operational FPV projects in Southeast Asia currently amount to a combined 500 MW but 300 MW of FPV capacity is expected to be added across Southeast Asia in early 2024 alone.

FPVs are expected to become a catalyst for the region’s green energy transition by taking advantage of its copious solar potential, while at the same time overcoming land scarcity issues. 

Deploying floating solar panels could potentially meet 50% of the world’s total demand for electricity, according to World Bank data, however, FPV still has a long way to go. While the global installed capacity of ground mounted solar is more than 1,000 GW, it is less than 10 GW for floating solar. Global investment in clean energy will reach USD 2tn in 2024, twice the amount invested in fossil fuels, according to the International Energy Agency. Solar photovoltaic will account for the bulk of this investment, attracting more money than all other electricity generation technologies combined. Thus, FPV are bound to become an attractive investment target in the future.