Global energy demand set to soar: Why solar is a solution
The world is on the brink of an energy transformation. Global energy consumption is expected to rise dramatically in the coming decades, driven by rapid industrialisation, urbanisation and technological advancement. This rise in demand poses serious challenges for traditional energy grids, which are already strained in many parts of the world. Solar energy, paired with energy storage, presents a reliable, sustainable solution. Here’s why getting on board with solar now is essential to ensure that your business will be future-fit.
Industrial energy demands are on the rise
Industries around the globe are the engines of growth, but they are also becoming increasingly power-intensive. From manufacturing to mining and agriculture, businesses require more electricity than ever to keep up with innovation and production. The International Energy Agency (IEA) estimates that global electricity demand will increase by 60% by 2040, with industrial activities being a primary driver.
Take the manufacturing sector as an example. With the advent of automation, smart factories, and the Internet of Things (IoT), more machines are being connected to the grid. According to a report from McKinsey, by 2030, the demand for smart manufacturing technology could see electricity consumption in the sector rise by 50% from 2020 levels.
The mining industry, too, is feeling the pressure. As the world seeks to extract more minerals to fuel technological innovation, from electric vehicle batteries to smartphones, energy demands are escalating. The transition to renewable energy will, ironically, depend heavily on increased mining of materials like lithium, cobalt and nickel, further exacerbating electricity needs.
Additionally, the electrification of company vehicle fleets is rapidly gaining traction as more businesses adopt electric vehicles (EVs) to lower emissions and cut fuel costs. However, this shift brings its own energy requirements. Charging large commercial fleets, from delivery vans to logistics trucks, will require significant power infrastructure upgrades. Fleet charging can add tens of thousands of kilowatt-hours to a company’s monthly consumption, according to research by Deloitte. As more companies transition to EVs, their electricity demands will continue to surge, adding further strain to the already pressured grid.
Household electricity usage is evolving
The picture is no different for households. In fact, domestic electricity consumption is expected to rise significantly as more people adopt electric vehicles (EVs), and smart home technologies become the norm. The number of EVs on the road is expected to rise from 26 million today to over 230 million by 2030, according to the IEA. Each of these vehicles will require regular charging, potentially adding significant strain to local electricity grids.
In addition, the rise of heat pumps, air conditioners and other energy-intensive appliances will see home energy consumption rise. A report from Bloomberg predicts that by 2050, global residential energy use could increase by as much as 20%. As populations grow and incomes rise, especially in developing economies, more homes will be equipped with high-consumption devices, from refrigeration to entertainment systems.
The challenge: traditional grids won’t cope
With energy demand increasing across both industrial and domestic sectors, there’s a growing concern that current electricity grids will struggle to cope. Much of the world’s energy infrastructure is ageing and was never designed to handle the levels of demand we are now anticipating. Energy production will need to ramp up significantly to avoid blackouts, supply shortages, and higher costs.
Fossil fuel-based energy, the traditional source of electricity, cannot meet this surge sustainably. Coal, gas and oil reserves are finite, and their environmental impact is no longer a viable option for long-term growth. Even the rise of natural gas, which has been hailed as a cleaner alternative, cannot bridge the gap without severe environmental costs.
Why solar is part of the answer
Solar energy presents a powerful weapon to the growing energy crisis. As a renewable resource, it offers infinite potential for scaling up, with minimal environmental impact. In addition, solar panels can be installed in a multitude of environments, reducing reliance on traditional centralised power plants.
For businesses, investing in solar means securing a stable and predictable energy source. Energy costs are predicted to rise with increasing demand, but solar installations provide companies with long-term savings and energy independence. With battery storage technologies advancing, businesses can harness energy during the day and store it for use at peak times and providing peak shaving and other benefits.
Expert opinion: The future of energy is solar
As Claude Peters, Managing Director of RenEnergy Africa, explains:
"The world is moving towards a future where energy demand will far exceed the current capacity of traditional grids. Solar power, coupled with energy storage, offers an elegant solution – it's clean, scalable and can be deployed almost anywhere. Investing in solar today is an investment in energy security tomorrow."
Damian Baker, Managing Director of RenEnergy UK, adds:
"As businesses face increasing energy demands, the time to act is now. The traditional energy landscape is shifting, and those who embrace solar will undoubtedly be better prepared for the future. Solar power not only addresses rising costs, but also helps secure a greener, more sustainable future."
A sustainable solution for rising energy demand
It’s clear that the world’s energy consumption is on a steep upward trajectory, and the current production models simply cannot keep up. By adopting solar power now, both businesses and households can mitigate rising costs, avoid grid disruptions, and play a role in building a more sustainable energy future.
Sources: International Energy Agency (IEA): Global Electricity Demand Outlook 2020–2040 | McKinsey: The Future of Smart Manufacturing, 2021 | Bloomberg: Residential Energy Consumption Projections, 2022 | Deloitte: Fleet Electrification: Navigating the Transition to Electric Vehicles, 2022.