Electrification
The Exponential View of Solar Energy
The Exponential View of Solar Energy
The human brain is terrible at comprehending exponential growth.
Much like the power of compound interest is a magical force for investors, it is also possible for innovations and technological breakthroughs to build off each other in the physical world, creating a similar compounding effect.
In this chart, we look at how solar technology has surpassed all expectations from an economics perspective, including those initially set by the International Energy Agency (IEA). Then later, we’ll also look at a new set of predictions for solar energy economics over the next 30 years.
Solar Energy: The Technological Overachiever
Back in 2010, the cost of utility-scale solar power ranged between $0.25-$0.37 per kWh. This meant it was at least three times as expensive as fossil fuels, and that solar was highly cost-inefficient at the time.
Going forward, most organizations projected a linear path for whittling down the cost of solar.
The IEA, for example, forecast that the global cost of solar would drop to roughly $0.22 per kWh by 2020. In reality, however, the price dropped to about one-fifth of that at $0.04 per kWh.
Year | Actual (BNEF Global) - $ per kWh | 2010 Forecast (IEA) - $ per kWh |
---|---|---|
2010 | $0.28 | $0.36 |
2020 | $0.04 | $0.22 |
Change | -85.7% | -38.9% |
Almost all industry forecasters, including the IEA itself, missed the exponential factors at play.
Wright’s Law
Ramez Naam, the co-chair for energy and the environment at Singularity University, points out in his blog that the exponential decrease in solar costs stem from Wright’s Law:
For most technologies, every doubling of cumulative scale of production will lead to a fixed percentage decline in cost of the technology.
-Wright’s Law
Professor Naam says this occurs through “learning-by-doing”, and more specifically:
- Innovation that improves the technology itself
- Innovation that reduces the amount of labor, time, energy, and materials needed to produce the tech
Put another way, the more solar panels we make and the more we install—the better we get at the whole process over time. And once we’re making thousands or millions of panels, the costs come down exponentially, much like with lithium-ion batteries.
The Future of Solar Costs
Over the years, Naam has taken his own stab at forecasting the cost of solar energy into the future, leveraging the idea of Wright’s Law.
Here’s what he sees coming, based on using a 30% learning rate* for solar:
*The learning rate is the fixed percentage decline that occurs with every doubling of the scale of production.
Based on these projections, even the costliest of solar installations will be more economical than the cheapest of utility-scale fossil fuel plants. This means solar can basically go anywhere, and make sense from a cost perspective.
Underestimate Solar No More?
For fun, here’s a final look at how IEA projections have constantly underestimated solar installations, which are one of the key factors dictating the “learning rate” under Wright’s Law:
With solar energy costs plummeting to record lows and global installations continuing to ramp, it’s possible that solar forecasters may no longer forget about the exponential nature of solar production.
Electrification
Charted: Battery Capacity by Country (2024-2030)
This graphic compares battery capacity by cathode type across major countries.

Charted: Battery Capacity by Country (2024-2030)
As the global energy transition accelerates, battery demand continues to soar—along with competition between battery chemistries.
According to the International Energy Agency, in 2024, electric vehicle sales rose by 25% to 17 million, pushing annual battery demand past 1 terawatt-hour (TWh)—a historic milestone.
This graphic, using exclusive data from Benchmark Mineral Intelligence (as of February 2025), compares battery capacity by cathode type across major countries. It focuses on the two dominant chemistries: Nickel Cobalt Manganese (NCM) and Lithium Iron Phosphate (LFP).
Understanding Cathode Chemistries
Batteries store and release energy through the movement of lithium ions. The cathode—a key electrode—determines a battery’s cost, range, and thermal performance.
NCM
- Offers higher energy density and better performance in cold climates, but is more expensive and has a shorter lifespan.
LFP
- Known for its lower cost and improved thermal stability, though it delivers a shorter driving range and adds weight.
As of now, LFP cathodes make up 40% of the EV market in terms of gigawatt-hours (GWh).
Beyond passenger vehicles, LFP batteries are widely used in systems that undergo frequent charging and discharging—like residential and grid-scale energy storage—where added weight isn’t a major concern. They’re also ideal for daily-use applications such as buses and delivery fleets.
Regional Market Trends
In China, LFP is already dominant, accounting for 64% of the market in 2024. By 2030, that figure is projected to grow to 76%, driven by a focus on affordability in the world’s largest EV market. Notably, over 70% of all EV batteries ever manufactured have been produced in China, contributing to deep manufacturing expertise.
Region/Country | Year | % NCM | % LFP | % Other |
---|---|---|---|---|
China | 2024 | 27% | 64% | 8% |
North America | 2024 | 71% | 7% | 22% |
Europe | 2024 | 69% | 8% | 24% |
South Korea | 2024 | 62% | 4% | 35% |
Japan | 2024 | 58% | 0% | 42% |
Outside of China, NCM remains the leading chemistry due to consumer demand for longer range and premium performance.
North America – NCM holds a 71% share in 2024, with a slight decline to 69% forecasted for 2030.
Europe – NCM’s share is expected to grow from 69% in 2024 to 71% by 2030.
South Korea and Japan – Both countries show similar trends, with NCM gaining share as LFP remains limited or absent.
Electrification
Top 20 Countries by Battery Storage Capacity
China holds about two-thirds of global BESS capacity.

Visualizing the Top 20 Countries by Battery Storage Capacity
Over the past three years, the Battery Energy Storage System (BESS) market has been the fastest-growing segment of global battery demand. These systems store electricity using batteries, helping stabilize the grid, store renewable energy, and provide backup power.
In 2024, the market grew by 52%, compared to 25% growth in the EV battery market. Among the top companies in the BESS market are technology giants such as Samsung, LG, BYD, Panasonic, and Tesla.
This graphic highlights the top 20 BESS markets by current and planned grid capacity in gigawatt hour (GWh), based on exclusive data from Rho Motion as of February 2025.
Chinese Dominance
As with the EV market, China currently dominates global BESS deployments, accounting for approximately two-thirds of installed capacity. However, other markets are expected to grow significantly in the coming years, driven by low-cost lithium-ion cells and the expansion of renewable energy capacity.
Currently, China has 215.5 GWh of installed capacity and an ambitious 505.6 GWh project pipeline. The U.S. follows with 82.1 GWh installed and 162.5 GWh planned.
Top BESS Markets | Installed 2024 (GWh) | 2027P |
---|---|---|
🇨🇳 China | 215.5 | 721.2 |
🇺🇸 USA | 82.1 | 244.6 |
🇬🇧 UK | 7.5 | 56.3 |
🇦🇺 Australia | 5.6 | 102.9 |
🇨🇱 Chile | 3.8 | 41.0 |
🇮🇹 Italy | 2.2 | 7.9 |
🇸🇦 Saudi Arabia | 1.3 | 32.4 |
🇿🇦 South Africa | 1.3 | 9.4 |
🇮🇪 Ireland | 1.6 | 2.5 |
🇵🇭 Philippines | 1.0 | 6.1 |
🇯🇵 Japan | 1.0 | 5.0 |
🇩🇪 Germany | 1.0 | 6.2 |
🇰🇷 South Korea | 1.1 | 1.3 |
🇮🇱 Israel | 0.8 | 4.6 |
🇫🇷 France | 0.6 | 1.8 |
🇧🇪 Belgium | 0.7 | 5.3 |
🇺🇿 Uzbekistan | 0.6 | 5.9 |
🇸🇪 Sweden | 0.6 | 1.5 |
🇮🇳 India | 0.5 | 4.3 |
🇨🇦 Canada | 0.3 | 18.3 |
Canada is projected to be the fastest-growing market through 2027, with its cumulative capacity hitting 18.3 GWh—a significant increase from its current 0.3 GWh capacity.
Countries such as Australia (97.3 GWh pipeline), Saudi Arabia (31.1 GWh), and Chile (37.2 GWh) have relatively small current installations but plan substantial expansions. Within Europe, the UK leads with 7.5 GWh of installed capacity and 48.7 GWh in the pipeline, while Italy, Germany, France, and Belgium show steady but more modest growth.
Despite being technological leaders, Japan (4 GWh pipeline) and South Korea (0.3 GWh) have relatively low planned BESS expansions.
According to Rho Motion, China will remain the dominant player in 2027, but its share of the total market is expected to decline to just over 50% based on the current project pipeline.
While the BESS market is expanding, challenges remain, including grid connection bottlenecks and the development of revenue streams in emerging markets.
-
Electrification2 years ago
The Six Major Types of Lithium-ion Batteries: A Visual Comparison
-
Real Assets2 years ago
Which Countries Have the Lowest Inflation?
-
Electrification3 years ago
The World’s Top 10 Lithium Mining Companies
-
Real Assets1 year ago
200 Years of Global Gold Production, by Country
-
Electrification2 years ago
Life Cycle Emissions: EVs vs. Combustion Engine Vehicles
-
Misc2 years ago
Mapped: U.S. Mineral Production Value by State in 2022
-
Energy Shift2 years ago
Mapped: Biggest Sources of Electricity by State and Province
-
Electrification2 years ago
Visualizing Global EV Production in 2022, by Brand