The energy industry hasn't been disrupted in a meaningful way since oil replaced coal as the main transportation fuel over a century ago. Today, solar energy is on the cusp of upending everything we know about energy, making it possible for households to produce energy, making unproductive desert land into highly productive generating assets, and upending the utility electricity model that's been in place since the days of Thomas Edison.

Just how big can the solar industry be? The opportunity can literally be measured in trillions of dollars.

The next great investing opportunity

Today, the solar industry is a $120 billion industry, which sounds big but that's a figure that needs a lot of context. The world spends $2 trillion every year on electricity and $2.7 trillion on oil at $80 per barrel. Energy is a huge potential market if solar can disrupt it.

What's incredible is that industry analysts are expecting the solar industry to grow 10x over the next 20 years as solar energy competes with conventional electricity on price. That's probably conservative given the exponential growth we could see if demand for solar energy picks up.

I recently talked to SunPower's (NASDAQ:SPWR) CEO Tom Werner and he put the industry's potential into some context.

This is just a piece of a larger interview, which can be seen here.

Growth could be faster than anyone thinks

While growing 10x sounds impressive, I think that's short changing the solar industry's potential. Remember, enough solar energy hits the earth every hour to power every electrical device, every car, everything that takes energy for an entire year. If companies can cost effectively harness that energy the potential is there for exponential growth.

Consider that the U.S. alone can generate over 1,000 million kilowatts of electricity at summer peak capacity. That would be 1,000 GW of solar capacity in the U.S. alone and that's just peak at power. Solar energy is only 20% to 30% efficient because the sun is only up on average for half of the day, so much more capacity would be needed to power the whole country.  

Since the solar industry in the U.S. is only 6.5 GW  this year to reach 1,000 GW of installed capacity the industry would have to grow 20% per year for 19 years. That's much faster than the 12% it would take to grow 10x in 20 years. And that's just the U.S.

The point is that growth in solar industry growth could easily exceed 20% for the next decade and the companies who can gain market share could become some of the largest energy companies in the world. If you're not participating in the solar energy revolution, now may be the time to start looking into it.

Travis Hoium manages an account that owns shares of SunPower and is personally long SunPower shares and options. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.