Solar will dominate energy by 2035, but AI data centers will keep the primary fuel in business.

Solar will become the largest source of electricity in the next decade, surpassing coal, oil and natural gas, according to a new BloombergNEF report. A tectonic shift will occur along with the rapid rise of AI-driven energy use and electrification of all industries.

“Solar is winning the race,” said Matthias Kimmel, chief financial officer of the company BloombergNEFhe told TechCrunch.

BloombergNEF expects the change to happen for economic reasons alone – solar is too cheap to ignore. For example, Pakistan has added 25 gigawatts of solar power in the past two years as natural gas prices rose after Russia’s invasion of Ukraine. This change should be much faster if countries take strong action to reduce carbon emissions.

The energy offering comes as investors see energy as one of the biggest opportunities in recent years. The data center has been at the center of the trend, and BloombergNEF’s data supports the growth of that opportunity. The utility expects the data center to drive an additional 1 terawatt of solar, 400 gigawatts of solar, 370 gigawatts of natural gas, and 110 gigawatts of coal.

But thanks to the power of gas and coal to work 24/7, BloombergNEF expects that the remaining oil will provide 51% of the additional growth of the data centers by the year 2050. In short, the technology companies and data producers will have a huge influence that the sources of energy remain viable by the middle ages.

The predictions were not ironclad, however. Other technologies have been vying for a share of the data center market, including long-term energy storage, geothermal, and nuclear. The main batteries received power from Google, which includes $1 billion of 100-hour batteries from Form Energy in the latest data center project. And both geothermal and nuclear power promise blockbuster IPOs for both Opinions of the company Fervo Energy and X-force this month.

Competition from photovoltaics will be strong, though. Solar power has become widespread in recent years, fueled by falling prices that show no sign of stopping. By 2035, prices are expected to drop other 30%coal and natural gas. By 2050, solar panels are expected to produce twice as much electricity as natural gas.

The decline in solar prices can be attributed to two reasons: One is the policies of Chinese companies, which have favored the technology, subsidizing manufacturers and flooding the market. China is manufacturing more and more products, which has helped to make the cost of solar energy incredibly high.

In general, “prices go down with every doubling of installed capacity,” Kimmel said. In the case of solar, it has gone faster than that.

Solar power is starting to push grid batteries in the same direction. In Spain and Italy, independent solar farms are no longer profitable because the increase in solar power has reduced daytime electricity prices, Kimmel said. In response, builders have begun to develop so-called hybrid renewable power systems, which combine solar panels and batteries to take advantage of evening electricity rates.

The current state of the battery market is similar to where solar was in 2020, BloombergNEF said. Last year, 112 gigawatts grid-scale batteries have been installed around the world. By 2035, the company expects this number to increase by almost three times. Companies from Redwood Tools for Ford has set up energy saving businesses to capitalize on the trend.

The missing piece in the report was the Iran War, which began when BloombergNEF was far from ready for major changes. The group tested the effects of two scenarios on the dependence of different countries on energy dependence.

Under economic reform, in which emissions are regulated more by dollars and cents rather than regulations, each country can reduce its dependence on foreign energy, including Saudi Arabia’s oil power. Under the net-zero scenario, which sees regulations driving more decarbonization, any country can end its dependence on foreign energy sources.

“Reform, which in many ways is expensive, is good for independence,” Kimmel said.