Since the late 1960s, scientists have dreamed of placing solar panels in outer space. By the 1970s, it was already clear that generating solar energy from space was technically feasible. But the real race toward space-based solar power (SBSP) began only recently, driven by the worlds growing need to produce more electricity to meet the accelerating demand for energy.

As electrification expands across industries, artificial intelligence and big data continue to grow, and the deadlines for reducing carbon emissions draw nearer, innovative energy solutions are more urgent than ever. It now seems that space-based solar power is finally ready for its time in the sun.

A New Technology with Limitless Ambition

This emerging technology relies on massive satellites that collect high-density sunlight in space and transmit it to Earth through microwave or laser beams. The energy is then captured by ground-based stations that convert it into electricity for national grids.

A key advantage of this system is its flexibility satellites can beam energy directly to almost any point on the planet thanks to their wide coverage range.

Clean Energy Around the Clock

The greatest benefit of space-based solar power is that its panels operate above Earths atmosphere and weather systems. They are unaffected by day-night cycles or cloud cover, allowing them to capture uninterrupted sunlight 24 hours a day, seven days a week.

This makes them capable of producing vast amounts of clean energy that could transform the global energy landscape.

Europe as the Biggest Potential Beneficiary

According to researchers at Kings College London, space-based solar power could reduce Europes dependence on terrestrial renewable sources by up to 80% and cut the need for battery storage by more than two-thirds.

Economically, the study estimates that this system could lower Europes total energy system costs by as much as 15%, saving around 35.9 billion ($41.7 billion) annually in generation, storage, and grid infrastructure expenses.

Higher Energy Density, Lower Use of Rare Resources

Thanks to the high energy density of space-based systems, these projects require far fewer materials than conventional solar installations.

A report by the World Economic Forum notes that such systems need dramatically less rare metal to deliver the same continuous energy output as large-scale, storage-based ground systems. The report adds that this approach is more sustainable, easing pressure on natural resources a challenge the International Energy Agency (IEA) has warned will be critical in the years ahead.

Saving the Earth from Its Space Problem

Another major advantage is that these systems require far less land area than traditional solar farms.

Since the panels are deployed in orbit, the receiving stations on Earth can be relatively small and semi-transparent, allowing dual use in residential, agricultural, or industrial zones. This could help overcome the land scarcity problem faced by large-scale renewable energy projects.

A Global Race Toward the Sun

Awareness of SBSPs potential has accelerated investment worldwide.

In the United States, the United Kingdom, China, Japan, and across Europe, research institutions are fast-tracking their space-solar programs. The private sector is also joining in: Baiju Bhatt, co-founder of the trading platform Robinhood, launched a startup called Aetherflux last year to develop space-based solar technology.

Funding: The Biggest Hurdle

Despite the growing momentum, SBSP still faces key obstacles before achieving commercial-scale deployment.

The greatest challenge is financing. Private investment typically favors short-term, quick-return startups, while space infrastructure projects require long-term, capital-intensive commitments.

Although the technology promises enormous savings over time, it does not offer investors fast or guaranteed returns.

Betting on Government and Military Support

For that reason, startups in the sector are focusing on securing government contracts as the most realistic way to move space-based solar power from concept to orbit.

Christian Garcia, managing partner at Breakthrough Energy Ventures one of Aetherfluxs main backers told CNBC: We believe the military customer base is large enough and complex enough that if we can serve it successfully, we can build a complete orbital energy system at scale. At that point, well have reduced the cost of the technology enough to expand to other markets.

In short, space-based solar power may finally be on the verge of becoming a viable clean-energy solution one that could reshape how humanity powers its future.