Photovoltaics

Status

Growth of global PV market

by Ruggero Schleicher-Tappeser:

"The global PV market has grown from 280 MW p in 2000 to 16,629 MW p in 2010,2 corresponding to an average annual growth rate of 50%. In the last decade, Germany has been the country pushing the majority of this growth, making up for nearly half of the global market.

The driver behind this development was the creation of stable markets supported by feed-in-tariffs. In the German scheme, which over 40 countries have replicated with various modifications, private solar power producers sell electricity to the grid operators at a price which is fixed and guaranteed for 20 years. Grid operators then pass on the additional costs of this mandatory purchase to electricity customers. This mechanism has allowed hundreds of thousands3 of small solar power producers to enter the electricity market since low risks, low transaction costs, and high transparency make investments easily calculable for investors and banks. The difficulty with feed-in-tariffs has been to regularly adapt the guaranteed tariff to decreasing system prices.4 In addition to providing easy access to small investors, most European support schemes offer higher tariffs for small-scale roof-top installations, rewarding their lower impact on landscapes and lower grid costs. In Germany over 50% of new installations are systems under 100 kW.5

In the United States the picture is rather different. The most effective mechanism for promoting solar power is the set of Renewable Portfolio Standards (RPS), which require utilities to generate a growing share of their electricity from renewable sources. Therefore, utilities are the main actors, and since they tend to stick to their logic, they mainly build large power plants.

Until recently, the global PV market depended on the policies of a few pioneering countries. With the visible success of photovoltaics this is changing. In 2012, Italy may become the largest market worldwide, and the share of non-European countries is increasing. Many countries have started new, although prudent, support schemes. This means that despite all present difficulties in PV markets, the global supporting environment is getting more stable. Big new markets are emerging in the US, India,7 China,8 Japan, and Turkey. They are not all newcomers, however. Under President Carter, the US had a leading role in PV development,9 and later it was Japan that took the global lead. Both reduced their efforts after some years because of political changes.

The volume and the accelerated growth of the global PV market in the last years—the average annual growth rate between 2006 and 2010 was 80%—has attracted new players and highlighted the unique characteristics of PV. Growing markets and increasing competition have led to an unprecedented price decline. Between December 2010 and December 2011, PV modules from China/Taiwan have seen a price decline of 48%.10 Over the last three years, prices for medium-sized PV systems in Germany have decreased by an average annual rate of 21%. These changes in cost for PV relative to other energies have occurred much more rapidly than most expected, and the trend continues.

The PV industry, which has been characterised by pioneering and growing start-ups, is presently undergoing a shake-up in the transition to mass production. Asian producers, well experienced in low-cost high-volume electronics manufacturing and backed by strong capital resources, have discovered the market and succeeded in dominating it. Globally-established corporations with long experience in electric and electronic equipment and consumer goods are also starting to invest heavily.

Taken together, these developments mean that photovoltaic cells are no longer a hopeful technology at the mercy of political support; instead, they have acquired a technological and industrial dynamic, and become an economic factor which is starting to transform markets." (http://www.sciencedirect.com/science/article/pii/S0301421512003473)

Discussion

The disruptive character of Photovoltaics

A radically new technology for power generation, by Ruggero Schleicher-Tappeser:

"Photovoltaic (PV) cells are semiconductors that directly transform sunlight into electric power. Compared to all other power generation technologies, they have four fundamental characteristics that set them apart:

1. Durably encapsulated and fixed on a support exposed to the sun, they are extremely reliable—they have no moving parts, need no fuel, and require essentially no maintenance during their lifetime of over 20 years.

2. PV cells can be mass produced. They demonstrate similar economies of scale and learning curves as other components produced by the semiconductor industry—for the past 30-plus years, their price has dropped on average by more than 20% for every doubling of the production volume. There is also no end to this trend in sight, as a long list of planned innovations on several separate technology tracks promises further progress for many years.

3. As the transformation of light into electricity occurs at microscopic levels, photovoltaic technologies are extremely scalable. Whether mounted in small watches, on cars, on roofs, or in large power plants, the efficiency does not change. Cost differences between different scales are only due to different mechanical and electrical integration.

4. Innovation cycles for PV are up to ten times shorter than for conventional power plants. PV plants, large and small, can be installed within weeks, with planning times ranging from days to months, depending on the size of the plant." (http://www.sciencedirect.com/science/article/pii/S0301421512003473)