A new report by Clean Edge projects that the value of the market for clean energy sources like solar and wind will grow from $188.1 billion in 2010 to $349.2 billion by 2020. The growth will be driven by markets like China and India, the report said.

More than 15.6 gigawatt of solar were installed worldwide in 2010, according to Clean Energy Trends 2011. That’s more than double the 7.1 gigawatts of solar installed in 2009.

“The level of growth and expansion in solar PV was a direct result of PV prices dropping by more than 30 percent in 2009 followed by an additional 10 percent drop in 2010,” the report said.

Looking forward, the report found that photovoltaics will grow from a $71.2-billion industry in 2010 to $113.6 billion by 2020. The growth in the solar industry will be driven by cost drops, said Clean Edge Senior Research Analyst Trevor Winnie.

“With solar, it’s all about the cost. It’s been out of reach for a lot of folks unless there’s been a specific policy [to make it affordable],” he said.

In the future, policies aren’t going to be necessary to drive the solar markets, Winnie said. The price drops in solar power over the last few years will continue, partly because of companies’ production increases. That trend will continue.

“There are efforts to drive down technology costs further than that,” he said.

Utility-scale solar projects will soon see costs that are competitive with other power technologies, according to Winnie.

“A lot of utility scale projects are going in on prices that are cost competitive in the next five years,” he said. “Rooftops have to be more customized, but for large-scale projects, it’s easier to get the costs down.”

The U.S. market will continue to be smaller than European markets like Germany and Italy for now, though.

“The U.S. hasn’t had really strong performance incentives for solar,” Winnie said. “Without the cost being low enough through policy, I think it will hold the U.S. back in terms of development.”

Image courtesy of NREL.