On October 18, the ACI (The Financial Markets Association) will host a conference on "Solar energy, the new king of electricity production", presented by Mr. Pascal ROCHAT. Founder of Active Niche Funds in 2007, he manages Active Solar, the first investment fund specializing in the global solar energy sector, which was awarded best sustainable theme fund at the Swiss Sustainable Funds Awards 2020 and 2021.
Can you briefly introduce Active Solar?
Active Solar is the only equity fund with daily liquidity that focuses on the global solar industry. As early as 2007, I had the intuition that solar would play a major role in the future of energy, which is why I created Active Niche Funds, a Swiss company regulated by the FINMA. Today, we distribute our solar fund in all European countries. Professor BALLIF, head of photovoltaic research at the Swiss Federal Institute of Technology in Lausanne, winner of the prestigious Becquerel Prize for his contribution to the field of photovoltaics, and member of the Swiss Academy of Technical Sciences, provides us with scientific and technological support. Active Solar manages 250 million euros, and our annual performance in 2022 is excellent: we are close to 0% in a market universe of -20% -30%.
How does solar fit into the energy transition?
This year, new solar installations will amount to 250 gigawatts (GW), bearing in mind that one gigawatt corresponds to the power of a large nuclear reactor. The expansion of solar energy is spectacular: the market has increased 100-fold in 15 years, with China accounting for the largest share by installing almost 100 GW per year, followed by Europe and the United States. As an example, the solar panels installed this year alone in the world are enough to satisfy the energy consumption of a country like France.
Does the Ukrainian conflict boost the installation of photovoltaic panels?
Yes, the European Union will install at least 60 to 70 GW per year. The argument of energy security is becoming more and more important. The solar market is being driven both by decarbonization and by the desire of all countries to become energy independent. The key word is decentralization of electricity production. The global market is expected to double by 2025. China, the USA, India, Japan, almost every country in the world is installing more photovoltaics every year.
What role does solar play in decarbonizing the economy?
The total solar capacity in the world at the end of 2022 will be 1200 GW, which will have produced about 5% of the world's electricity. We are clearly heading towards a scenario of decarbonization of the major economies by 2050, where solar will probably exceed 20% of global production by 2030, with more than 5000 GW of installed capacity.
Decarbonizing the economy requires using electricity directly whenever possible, and otherwise using hydrogen as an alternative energy carrier. Electricity will represent more than 50% of final energy consumption in a decarbonized world (20% today), and half of it will be produced by solar energy, the main decarbonization factor for more than 55% of CO2 emissions.
The amount of solar panels installed in the next 8 years will represent at least 4 times the total panels installed since the beginning of the industry in 2000. We are at an inflection point and accelerating decarbonization.
Can we talk about a revolution in the energy market?
The fundamental difference between fossil fuels and renewable energies is that for the latter, the fuel is free. This effectively changes the whole dynamic of the energy market.
Solar is the leader in terms of new annual installations and accounts for 50% of all new electricity installations worldwide each year, wind for about 35% and gas for about 10%. Solar power has become extremely cheap: in the US, the cost of production has dropped from $360 per megawatt hour to $36 today, or less than 4 cents per kilowatt hour.
There is a consensus not only among electric utilities but also among the big oil companies that solar is the big winner in the energy transition.
Why invest now?
Because the technology, industry and market are mature. Since 2017, solar has been competitive. Many states invested in the energy transition to avoid a recession during the COVID crisis, and investments are accelerating again in 2022 with the energy crisis caused by the Ukraine war.
