Solar sources will surpass coal and gas by the middle of the decade, but artificial intelligence will not allow a complete shift away from fossil resources

Short summary

In the next ten years solar energy will surpass coal, oil and natural gas as the main source of electricity for humanity. This will coincide with a sharp rise in energy demand driven by artificial intelligence development and industrial electrification. BloombergNEF notes that “solar power is too cheap to ignore.”

1. Solar energy as the winner
- Who says it: Matthias Kimmel – head of Energy Economics at BloombergNEF.

- What he forecasts: In the coming years data centers will require:

- 1.4 TW from solar plants,

- 370 GW from gas,

- 110 GW from coal.

By 2050 fossil sources will still provide about 51 % of additional generation for data centers because they can operate around the clock. This means that tech companies and center operators will directly influence the choice of energy solutions.

2. Decline in solar panel costs
- Current trend: Continuous price drops and efficiency gains.

- Forecasts:

- By 2035 prices will fall another 30 % – solar panels will become cheaper than burning coal and gas.

- By 2050 they will generate more than twice the electricity of gas power plants.

Kimmel notes that “the cost of producing energy falls faster with each doubling of installed capacity,” especially for solar. However, falling day rates have reduced the profitability of standalone solar parks, so hybrid solutions – panels combined with batteries to capture higher evening prices – are now actively developed.

3. Batteries as support
- Example: Google is investing $1 million in Form Energy batteries for one of its data centers; they provide up to 100 hours of autonomy.

- Battery market:

- Last year, 112 GW of systems were installed worldwide.

- Forecasts say this figure will almost triple by 2035.

The situation with industrial batteries is now similar to solar power in 2020 – a rapidly growing segment but not yet fully commercialized.

4. Market share competition
- Other players: Geothermal and nuclear energy are also gaining momentum.

- Recent events: IPOs of Fervo Energy and X‑Energy have attracted investor attention, confirming the potential of alternative sources.

Conclusion
Solar power is becoming a key player in the global electricity supply chain. Falling panel costs, rising efficiency and the development of hybrid battery systems make it attractive to data centers and tech giants. Fossil fuels still play an important role until 2050, and competition from geothermal and nuclear energy intensifies industry dynamics.