J.P. Morgan Predicts Reusable Rockets, Lower Orbit Costs to Expand Space Economy, Driving Space-Based Solar Power and Defense Spending

June 28, 2026

J.P. Morgan USA

Overview

A recent J.P. Morgan analysis forecasts that advancements in reusable rocket technology, coupled with decreasing per-kilogram costs to orbit and expanded lift capabilities, are accelerating the commercial realization of Space-Based Solar Power (SBSP). This paradigm shift is poised to dramatically broaden the space industry beyond traditional contractors, integrating new players from solar panel manufacturers to specialized tech providers. Increased global defense spending is also identified as a significant catalyst for this burgeoning space economy.

In Depth

Background

For decades, the space industry operated largely under the purview of governments and a select group of large contractors. The advent of the “New Space” era, propelled by private ventures such as Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin, has dramatically accelerated innovation and fostered intense cost competition. This shift coincides with urgent global challenges like climate change and energy security, which are driving increased interest in transformative solutions such as Space-Based Solar Power (SBSP). Simultaneously, the evolving international security landscape has established space as a critical new defense frontier, stimulating significant investment in related technological advancements. J.P. Morgan’s analysis suggests that these converging factors are poised to drive exponential growth, transforming the space industry into a broader, more dynamic “space economy” that transcends traditional boundaries and integrates diverse technologies and business models.

Key Findings

J.P. Morgan’s analysis highlights several critical trends and predictions poised to reshape the space economy:

Reusable Rocket Technology Drives Feasibility: Innovations such as SpaceX’s Starship are drastically reducing launch costs, enabling frequent and large-volume payload delivery to orbit. This makes large-scale space infrastructure projects, including Space-Based Solar Power (SBSP), economically viable, transitioning them from conceptual designs toward commercial reality.
Exponential Decrease in Cost to Orbit: The cost of transporting material to orbit is rapidly falling from thousands of dollars per kilogram to potentially tens of dollars. This exponential reduction is a key catalyst for the broader commercialization of the space industry, enabling new business models and technological developments previously deemed cost-prohibitive.
Space-Based Solar Power Nears Commercialization: SBSP systems, designed to collect continuous solar energy in Earth orbit and transmit it to Earth via microwave or laser, offer a promising sustainable energy solution. By operating without atmospheric absorption or nighttime interruptions, SBSP can provide 24/7 energy collection, addressing global energy challenges.
Diversification of the Space Industrial Landscape: Enhanced access to space is fundamentally transforming the traditionally vertically integrated space industry. This shift facilitates the entry of highly specialized small and medium-sized enterprises (SMEs) and startups, creating a diversified supply chain. Key areas for innovation include radiation-hardened electronics, ultralight structural materials, high-performance sensors, and space-tolerant battery technologies.
Defense Spending as a Stable Growth Catalyst: Space remains a strategically vital domain for military applications, including communications, reconnaissance, and navigation. Rising geopolitical tensions are driving increased global defense spending, which in turn stimulates the development and deployment of critical assets like reconnaissance satellites, missile early warning systems, and robust space-based communication networks. This sustained demand provides a stable engine for technological innovation and growth within the space industry.

The commercial realization of SBSP alone holds the potential to supply Earth with clean and abundant energy, significantly contributing to achieving a decarbonized society, while consistent demand from the defense sector will continue to fuel innovation across the sector.

Source: https://www.jpmorgan.com/insights/global-research/technology/space-economy

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