Last year, some 240 gigawatts of new solar power capacity was installed worldwide; that’s more than 40% beyond what was installed in 2021. According to SolarPower Europe’s statistics, at the end of August 2023, the world had a total of around 1,400 gigawatts of solar power capacity generating about 7% of global electricity consumption. This growth will continue in the future, with solar power expected to account for 16-20% by 2030.
But solar power is not a form of energy production exclusive to southern countries. Despite the dark and cold winter months, Finland surprisingly has a lot of potential as a location for solar power. Since solar energy production is based on the amount of light rather than heat, Finland can produce even more solar energy in summer than Central Europe can. In southern Finland, which also has the advantage of a robust electricity grid, the annual production of solar energy is as high as in northern Germany, for example. From November-January, there is hardly any light in Finland, but the sun shines brightly already in late winter/early spring. Cold temperatures and reflection from the snow further boost production.
In fact, in addition to small rooftop systems, Finland has started building larger ground-mounted solar power systems. Projects involving several gigawatts have already been announced and tens of gigawatts have been reserved for connection to the grid. The solar power industry’s umbrella organisation SolarPower Europe estimates that at least one gigawatt of solar power will be installed in Finland every year from 2025 onward.
We at Fortum are also aiming to develop solar power in Finland and elsewhere in the Nordics. Planning of the first projects is already underway in Finland and Sweden.
The advantage of affordability and technological progress
The biggest factor behind the growth of solar power has been its rapidly falling production costs. In the 2010s, the price of solar panels fell by a whopping 90%. In 2021-2022, the price of panels rose temporarily due to increased logistics and raw material costs caused by the pandemic and the energy crisis, but the downward trend has returned. Historically, the price of panels has fallen by an average of 25% every time global production capacity has doubled. By 2030, the global market price of panels is expected to further drop by 50% from the current price of about 20 cents per watt.
In the future, the main factor in reducing costs will be the increasing efficiency of the panels: new cell technologies will allow an increasing proportion of the sun’s radiation to be converted into electricity. The manufacturing processes of panels are also becoming more efficient, using less raw materials and less energy. Improved efficiency also reduces the surface area, building materials, cables and installation work required for the whole system.
A partner for other clean forms of production
Affordability, technological advances and a relatively fast construction time make solar power a promising form of electricity generation alongside other clean energy sources. The green transition will require a lot of new clean power generation, as industry electrifies and the hydrogen economy evolves. Solar is a great addition to the Nordic electricity generation palette. One of the solutions that is becoming more common is the combination of wind and solar power in hybrid parks. On average, there is more wind in winter than in summer, and there is more solar power production in summer. In the future, a hybrid solution could combine, for example, wind and solar power, a battery solution and a hydrogen production plant.
Local cooperation is the key to successful project development
In line with our new strategy, Fortum’s aim is to grow in wind and solar power. Already since 2012, we have been involved in large-scale solar projects in India, where we have learned a lot about building and operating large-scale solar parks. We can now apply this expertise in our home market in the Nordic countries, where we have a long track record of developing wind power projects in close cooperation with municipalities, local communities and land owners.
As for the acceptability aspect of the green transition, it is important to ensure that projects not only benefit society but also the local population, and that they add value to the regional economy. Our principle at Fortum is to have a local presence and to consider the whole life cycle of the project, from land lease to permitting and construction to operation and, ultimately, to the sale of electricity and site restoration. The future of solar power in Finland and other Nordic countries looks very bright when it is developed with the wellbeing of people and communities in mind.
