According to the latest figures published by EurObserv’ER, the global photovoltaic market has continued to expand despite the economic and financial crisis. Capacity in excess of 29,000 MWp was connected in 2011, which is roughly 12,200 MWp more than in 2010. The European Union is still the main hive of installation activity. It added more than 21,500 additional MWp of capacity to the grid last year, while outside the EU, the surging Chinese, American and Japanese markets vouch for the enormous growth potential offered by solar power worldwide.
“Photovoltaic market growth confounded the naysayers once again as the latest installation estimates in 2011 for grid-connected photovoltaic capacity around the world are at least 29 GWp, compared to the capacity figure of 16.8 GWp the previous year. Combined grid-connected and off-grid solar PV capacity exceeded 69 GWp at the end of 2011,” says the report.
The markets of a select six-country club (Italy, Germany, France, China, United States and Japan) are now in excess of 1 GWp up from just three in 2010 (Germany, Italy and the Czech Republic). Germany and Italy have established a clear lead from the others with almost
The Solar Energy Industries Association (SEIA) of the US says that the American market achieved new record of 1,855 MWp in 2011 a 108% year-on-year rise. The SEIA explains that three factors have combined to drive this thrust: the drop in the price of photovoltaic installations, which fell by 20% on average, an increase in plant installation capacities and the expiry of the US Treasury Department’s subsidy programme on 31 December 2011.
The capacity installed in Japan during 2011 also broke the one- GWp barrier, at 1,296 MWp according to the Japan Photovoltaic Energy Association, (including 86% in the residential segment). Its feed-in tariff for residential suppliers in force since November 2009 is only paid out for surplus electricity that the householders do not use. At the same time the latter can take up installation subsidies. The Japanese government views this scheme as expedient because households seek to maximise the resale of electricity and thus consume less power. Investment aid to the non-residential sector was curtailed in 2011, but the excess electricity resale price has been increased from 16 Yen/ kWh (roughly 15 euro cents) to 40 Yen/kWh (roughly 35 euro cents) for500 kWp) is due to come into effect in July 2012.
New high-potential markets are now opening up as PV system prices plunge. EPIA (the European Photovoltaic Industry Association) suggests that as a result of these falling prices in 2011 Australia added 700 MWp, Canada and India 300 MWp each and the Ukraine 140 MWp.
Plummeting prices
According to Photon International magazine, the average price of monocrystalline modules dropped from €1.44 per watt at the beginning of January 2011 to €0.82 per watt in January 2012 which is a 43.1% fall, while that of polycrystalline modules also dropped from €1.47 to €0.81 per watt for the same dates, which is a 44.9% fall. These are ball-park figures, as non-branded modules were being purchased at €0.70 per watt, while branded modules were selling at about €0.90 per watt.
The cost of photovoltaic systems has thus been free-falling. The German Solar Industry Association (BSW-Solar) price index that takes the cost of
These drops are the result of a price war being waged by the manufacturers, spurred on by the Asian operators and the Chinese in particular, and have been driven by the very swift increase in production capacities (economies of scale), technological innovations and the huge drop in the price of silicon. Note that the prices paid in the rest of the EU outside Germany are generally higher because their markets are not so mature.
Plummeting PV prices now doubt explain by, according to the French Observation and Statistics Office (SOeS), France connected an impressive 1,634 MWp to the grid during 2011 (79 291 plants), up from 817 MWp the previous year (106,589 plants), which equates 100% growth. The total capacity of on-grid installations stood at roughly 2,831 MWp at the end of 2011 (140% more than in 2010), for 242,295 plants connected to date.
Challenges in UK and Spain
While France enjoyed record growth, subsidies were halved in the United Kingdom off the back of much higher than expected PV growth, with an additional 937.1 MWp in 2011 as opposed to an additional 50.4 MWp in 2010 according to DECC (Department of Energy and Climate Change). Subsidy reductions were decided on as of June 2011, but only applied to ground-based plants and >250-kWp roof-mounted plants.
As the market boomed, DECC announced on 1 November that it would be slashing feed-in tariffs, by applying the FiT reductions initially scheduled for 1 April 2012 from 12 December 2011 onwards. The tariffs for small roof-mounted systems (
This decision, which is subject to appeal, postponed the effective FiT reduction to 3 March 2012. A further reduction was planned for 1 July and will be pegged to the installation level achieved in March and April, however yesterday (17 May) the UK solar industry welcomed an unofficial confirmation that the Department of Energy and Climate Change’s (DECC) will delay the next round of feed-in tariff cuts, although a new implementation date has not been disclosed.
Significant challenges were also faced by Spain’s PV industry after the incumbent conservative government used Royal Decree 01/2012 to force an immediate and indefinite moratorium (from 1 January), removing all financial aid awarded to renewable energy-sourced power plants. The moratorium will not affect installations already listed on the pre-allocation register. However, plants on the waiting lists will not receive any incentives, even if they are already constructed. While the introduction of new support mechanisms is awaited, a law passed by the previous government enforced in April 2012 will pay for the surplus electricity fed into the grid after self-consumption by
37 GWp manufactured worldwide
Despite the difficulties faced in some countries, Photon International magazine claims that global cell production rose to 37 GWp, which is an additional 36% increase (graph 1). In 2012, production capacities are set to rise to 69 GWp, which is 11.1 GWp more than in 2011.
“If the 2011 production figures turn out to be as above, that means that a significant proportion of the modules are awaiting connection and that many modules have yet to be sold on the market. Another explanation is that there are statistical differences. The state-published nominal capacity ratings tend to be lower than the peak capacities indicated on the panels,” says the authors of the latest Solar Photovoltaic Barometer.
Cell efficiency rising
“The manufacturers that use the most advanced technologies during the on-going trade war will have a clear advantage over their rivals,” says EurObserv’ER. One such technology is PERC (Passivated Emitter and Rear Cell) or its variant, known as PERL (Passivated Emitter and Rear Locally-Diffused), which have propelled crystalline In standard cells, the electricity flows through an aluminium contact that covers the rear of the wafer. The aluminium provides the electrical contact to the positive terminal, but part of the electrical charge is cancelled out by the direct contact between the metal and the semi-conductor. In PERC technology, the rear of the solar cells has a reflective coating comprising a dielectric passivation layer (that does not conduct electricity) and metal contacts (aluminium strips) that enable the electricity to flow from the rear to the front. This new structure enhances the optical and electrical properties of the solar cells, thereby transforming more of the light into electricity. A number of manufacturers have this Solar and Suntech. It already makes for 20% yields on multicrystalline modules and further optimisation could take this to 21%.
Another step towards increasing cell yield associates this technology with a new silicon crystalline ingot manufacturing technique, Quasi-mono technology. Here the vertical gradient freeze, or VGF process, generally used for manufacturing multicrystalline silicon is combined with the Czochralski method to produce monocrystalline ingots. The Quasi-mono method draws on the advantages of both processes improving the overall yield and optimising costs.
The seed crystal is placed at the bottom of the crucible and partially melted. Quasi-monocrystalline ingot growth is prompted by cooling the silicon using the vertical gradient freeze process. China’s JA Solar and Germany’s Schott Solar are two of the manufacturers working with this technology.
Grid parity around the corner
EurObserv’ER concludes in its latest report that in many European Union countries, grid parity – be it in the residential sector or the wholesale electricity market – “will arrive much sooner than expected… in a few years’ time for the residential sector (around 2016)”.
Understandably, it says, this should lead governments to revise their solar sector’s potential. The current targets set out in the National Renewable Energy Action Plans will inevitably be revised upwards, as Europe has already in 2011 practically reached the planned installed capacity for 2015 (i.e. 54 408 MWp) across the European Union. Germany is already one year ahead of its intended course, the K is 4 years ahead, France is 5 years ahead and the 2020 target has been easily overshot in Italy, Belgium, the Czech Republic and Slovakia.
EurObserv’ER has reassessed its forecasts for 2020 as a result of the mercurial progress made by the market in 2011. In the light of the estimates coming from the national experts interviewed for this survey, the European Union’s installed capacity by 2020 should be around the 120 GWp mark, which is over 40% higher than the current target (84.4 GWp). “This forecast is on the low side and if more ambitious policy goals are set, the figure could rise substantially,” it says.
However the rise is unlikely to be linear, as the drastic reduction in incentives and the setting of upper limits should more than contain the EU market for at least three years. Then, during the second half of the decade, economic rationale should take its course. In the residential sector households will have to be weaned off generous aid as the condition for making their investment decisions. The public authorities could decide to take a leaf out of Japan’s book and only pay for electricity surplus to self-consumption. This system offers the advantage of modifying behaviour by reducing energy consumption in favour of resale.
“The real market upturn should take place a little later in the decade, when the cost of photovoltaic electricity is closer to the wholesale electricity price. There will then be a paradigm shift and the sector’s real limit will be that of the grids’ capacity to absorb it,” EurObserv’ER ends.
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