OSLO: The tiny solar power industry is booming and could generate 2.5 per cent of world electricity by 2025 in a shift from fossil fuels, a report by a business group and environmental lobby Greenpeace said.

“Solar power...would represent the annual output from 150 coal-fired power plants” by 2025, the European Photovoltaic Industry Association (EPIA) and Greenpeace said.

The report said photovoltaic systems, which turn sunlight into power, now generate 0.05 per cent of world electricity and could rise to 2.5 percent in 2025, the main horizon for the report, and then leap to 16 percent in 2040.

“The solar electricity market is booming,” it said in a report to be issued at a conference in Dresden, Germany, adding that global sales of the photovoltaic systems had been growing at an average annual rate of 35 per cent.

The predicted growth is far more optimistic, for instance, than by the Paris-based International Energy Agency (IEA) which advises developed nations. Solar power has struggled to compete with fossil fuels, even with subsidies and oil at $70 a barrel.

Sven Teske at Greenpeace’s Climate and Energy Unit defended the forecasts as realistic, saying the lobby groups’ previous reports had underestimated growth to 2005.

“We are in a crucial phase in the solar industry. It’s now on a transition from a niche market to the mainstream,” he said. EPIA groups about 70 solar photovoltaic firms including Solar World, Renewable Energy Corp and Q-Cells.

The report estimated the world solar photovoltaic market was worth 8.1 billion euros ($10.41 billion) in 2005 and would rocket to 113.8 billion in 2025.

Many rich nations, from Germany to Japan, are promoting solar power as an alternative to fossil fuels, widely blamed for global warming. Solar radiation reaching the earth’s surface is more than 10,000 times what is needed for human energy needs.

It estimated that global power production from solar energy was 7 terawatt hours (TWh) in 2005 and would rise to 589 TWh in 2025 and 4,890 in 2040. Overall electricity demand would gain to 23,248 TWh in 2025 from 13,423 in 2005.

—Reuters