The outlines of a global market for solar-generated electricity are beginning to emerge.

An industry that has long been little more than a dream for governments, environmental activists and other strategists hoping to find ways to curb global warming blossomed into worldwide reality last year. Nations from all regions reported to the International Energy Agency for the first time that their markets for what is known as photovoltaic energy were growing.

According to a “snapshot” of this spurt of activity released by the Paris-based agency, nations in Africa, the Middle East, Latin America, and South and Southeast Asia reported the world market for “PV,” as it’s commonly called, is setting a variety of records. It grew by 25 percent in 2015 as the price for solar panels, the basic unit needed to make electricity, continues a stunning eight-year drop.

PV energy is a stream of moving electrons captured when sunlight excites certain materials. The main one being produced is polysilicon, which is primarily composed of silicon crystals. The phenomenon was first observed and experimented with by scientists in Bell Laboratories in the United States in 1953, and its development was pioneered in U.S. military and space programs to provide power for space satellites during the 1960s.

As the nation reached for the moon, it also began to develop domestic uses for PV, but for over 50 years, solar energy remained too expensive for widespread use. It made only a tiny dent in the United States, where conventional electricity was relatively cheap.

Since 2008, the price of solar panels has dropped almost 80 percent, and the main reason for that, according to the IEA, is China. For three years, it has led the world in manufacturing and exporting ever-cheaper solar panels. At the same time, its domestic market shot up from the minor leagues of solar buyers to pass Germany as the world’s leading market for installed solar capacity in 2015.

The swiftly plummeting prices, which some experts have dubbed the “solar coaster,” were not a good thing for companies that were not prepared for it. Some large U.S. panel manufacturers have been pushed into bankruptcy, and others appear to be heading in that direction, judging from the dramatic plunge in their stock prices. According to U.S. Department of Energy experts and reports, the remaining two large American panel makers are now outsold by at least six Chinese competitors. China produces 40 percent of the world’s panels versus 20 percent by U.S. companies, and it is continuing to expand its lead. Meanwhile, the world’s solar market is generally regarded to have grown into a $100-billion-a-year business.

“The ultimate point of all of this is that PV is quickly positioning itself to be a really big player in the world,” predicts Gregory Wilson, co-director of DOE’s National Center for Photovoltaics. “For anyone who cares about climate change and carbon emissions, but who also cares about quality of life and not upending the economy, it [PV] is going to be a very desirable thing. Wind power right now has also been pretty amazing, but wind will top out. PV won’t.”

According to Wilson, the United States will have to set policies to push innovation to stay in the rough-and-tumble PV market.

“We argue so much about the silly politics of climate change and fail to recognize the gargantuan economic opportunity that this presents. The energy system is going to get re-engineered, and someone is going to do it,” he said. “The Chinese seem to have recognized the significance of this opportunity.”

PVs, Wilson asserts, will usher in an era of cheaper, cleaner energy that will be used for powering and even heating our homes; powering electric cars; and splitting hydrogen out of water that serves as a feedstock for making synthetic fuels for cars, trucks and airplanes.

“We see a lot of opportunities in front of us, but we seem slow or even paralyzed when it comes to acting on them. We have not always been this way,” he said.

‘ON THE FRONT END OF A REVOLUTION’

The mathematics have long shown that solar power is the Earth’s most abundant energy resource. What is new is that the economics of making it into electricity have improved to the point where it is beginning to attract bigger buyers as the price for silicon panels falls.

In the United States, for example, electric utilities are now the nation’s largest customers for solar panels, constituting 60 percent of the market that was, until recently, dominated by homeowners and commercial buyers of rooftop solar installations.

Because utility-scale systems can be installed at lower costs when compared with commercial or residential systems, the price of solar-generated electricity by utilities is now close to competitive with conventional sources in some locations.

David Mooney, director of strategic energy analysis for DOE’s National Renewable Energy Laboratory, said a swan dive from $20 a watt for an installed solar panel to under $2 has made it happen.

“We’re at least on the front end of a revolution of the power businesses,” he said. When he began his research into PV back in 1987, Mooney recalled, “I used to joke that this is a time we all dreamed about. I never thought it would happen, but it is actually happening.”

The Electric Power Research Institute, which works for the nation’s utilities, has tracked the emerging solar technology for over 40 years, but recently its work has expended to helping utilities understand the best ways to buy and get a better grasp on how to operate utility-scale solar power plants, according to Michael Bolen, a senior technical leader at EPRI.

For years, Bolen noted, U.S. utilities have been forced by some state regulators and federal legislation to buy solar power or to accept it when a homeowner or a solar company begins generating power in its area. Pressured by environmental groups, many states passed renewable energy portfolio standards requiring varying levels of renewable energy. A federal law, the Public Utility Regulatory Policies Act (PURPA), passed in 1978, requires utilities to buy solar power if the resulting electricity was cheaper than what they could generate, giving some producers a toehold in the market, especially in California.

“That was usually done with ‘thou shalt’ language,” according to Bolen, who said many utilities were less than excited about it. What’s new is that utilities are beginning to own and run their own solar sites to make a profit.

“Now it’s more, how can we take solar and put it into the generation mix and into the rate base in some form or fashion?” he said.

Utilities want more information on how to buy solar, how long they can expect solar panels to last and whether they can be recycled at the end of their advertised 30-year life. “It’s a kind of cradle-to-grave approach,” explained Bolen. Best practices and standards in the utility world for operating solar plants are still being formed. “Eighty percent of the utility-scale PV plants have been built in the past five years, so we’re still trying to figure this out. We need more experience.”

Utilities, he is sure, will generate more data for him. “As more people start to get into solar module [panel] manufacturing, it’s going to become another race to the dollar-per-watt bottom.”

AT LONG LAST: A SOLAR RENAISSANCE

J. Charles Smith, an engineer, has been in the middle of this race. Five times a year, he convenes a national group to teach and share more experiences with generating and selling renewable energy. His group started 26 years ago as the Utility Wind Interest Group, but in 2013, as more power producers got interested in solar energy, it changed its name to the Utility Variable-Generation Integration Group and is developing a new focus on producing and selling solar energy.

The group has over 200 members; two-thirds of them are from utilities, mainly the nation’s larger ones. “It’s a quickly changing world out there, and it is a shock to a lot of utilities. They’re traditionally very conservative, very slow-moving organizations, and probably rightfully so. Their job is to run a reliable, economic power system, not to join the latest and greatest of technologies there,” Smith explains.

“But the pace of the development of this technology is so fast, it’s taken the country and the world by storm,” he adds. The lines between companies in the utility industry are blurring. Many smaller utilities are not yet aware of the competitive threat of solar power. But some have become painfully aware of it because some larger utilities are forming unregulated subsidiaries that are free to use the PURPA law to invade other utilities’ territories. There, they can produce solar electricity and force the local utility to take it because it’s cheaper.

“People in some places are a little slow to react,” is the way Smith describes it, “but if they don’t, they’re going to get their lunches eaten.”

After many years of political hype and billions of dollars of government subsidies, the idea of a solar renaissance has earned its share of skeptics. As late as 2008, David Keith, who teaches applied physics at Harvard University, was one of them. He had seen installed capacity of solar panels rise, but the costs of the panels had not dropped appreciably.

He was fairly sure that generous government subsidies would simply freeze the technology where it stood, keep solar-to-electricity efficiency rates low, and prevent future breakthroughs that he was sure would be needed to reach the scale where solar energy had to be to become a factor in slowing the progress of climate change.

In April, Keith produced a paper titled “I Was Wrong About the Limits of Solar. PV is Becoming Dirt Cheap.” In it, he asserts that “facts have changed.” There have been a “host of little innovations” that have helped drive costs down, apart from low-cost manufacturing by the Chinese. By 2020, he says, unsubsidized, utility-scale solar energy “could very easily be below $20 per megawatt-hour,” which would make it “the cheapest electricity on the planet.”

This will not be good news for everybody, he warns. Cheap solar electricity will “shake utilities,” force some big industrial customers of electricity to move to sunnier places, and eventually make wind power and nuclear energy look less interesting. It does not, by itself, “magically decarbonize the world,” he argues, because utility-scale solar power will still be vulnerable to intermittency and require supplementation by natural-gas-produced electricity to meet peak demands in the globe’s most populous places, such as the northeastern United States, northern Europe and coastal China.

Until more efficient long-distance transmission lines are built, Keith thinks, the cheapest solar power will be restricted to the world’s best solar locations, which include Southern California, parts of Mexico, the Middle East and Australia.

Another of the facts that have changed for Keith is that he now teaches his theories in what is called a “MOOC," a massive open online course that is put on the internet from Harvard. The first session reached about 12,000 students around the world.