The latest EurObserv’ER Solar Photovoltaic Barometer shows that despite the downturn Spain's solar industry and looming custs to solar feed-in tariffs across many of Europe’s leading markets, the continent’s solar PV industry fared well in 2010, installing 13 GW during the year in order to bring total capacity installed in EU-27 at the end of 2010 to 29.3 GW. Germany, Italy, the Czech Republic, France and Spain led the way.
According to the barometer, Germany has opted for grand-scale solar power-production development and is championing the sector. According to ZSW (Zentrum für Sonnenenergie- und Wasserstoff-Forschung Baden-Württemberg), Germany connected a massive 7,406 MWp during 2010 raising its accumulated solar capacity to 17320 MWp. The ZSW also claims that the 12 TWh (6.6 TWh in 2009) produced by photovoltaic provided 2% of Germany’s power consumption. On the basis of the capacity installed at the end of 2010 and the new installation forecasts for 2011 (at least 6 GWp), photovoltaic production should easily provide 3% of national electricity demand in 2011.
For its part, Italy is set on reclaiming control of its market The declaration made by Italy’s Electricity Services Operator (Gestore dei Servizi Elettrici), which manages the photovoltaic sector support system (Conto Energia), confounded many analysts who had forecast a lower increase. First estimates put the country’s capacity connection figure at 2321 MWp (84,808 installations) in 2010, which is over three times more than in 2009 (717.3 MWp, for 39371 installations). This claim would put the Italian on-grid photovoltaic base at about 3,465 MWp at the end of 2010.
However during the 12-month period, much more new capacity was installed, as many plants are waiting to be hooked up to the grid. On 8 March GSE put this additional capacity at 3,954 MWp. Furthermore, these plants will be paid at the 2010 rate provided they are on-grid before the end of June 2011 under the terms of the 129/2010 act that establishes a “period of grace”. The upshot could be that even though Italy has set itself a 2020 target of only 8,000 MWp, almost 6,275 MWp of installations could be paid the 2010 FiT rate.
Czech Republic ignites
In 2010, the Czech Republic leapt to number three in the world photovoltaic installation ratings with almost 1500 MWp (1,489.8 MWp to be precise), of new on-grid capacity, raising accumulated on-grid capacity to 1,952.7 MWp, according to its Energy Regulatory Office (ERU). However, EurObserv’ER explains that “yet again, the sharp rise in installed capacity results from an overheated market due to a completely inappropriate incentive system, which was far too lucrative for high- precapacity plants that were paid a similar FiT to low-capacity plants”.
In contrast to the Czech Republic’s overheated market, France does not look set to experience a boom in its solar industry.
Although the photovoltaic market in France built up capacity in 2010 (719 MWp, bringing accumulated on-grid capacity to 1,025 MWp), largely thanks to tumbling installation costs, the French government felt that this high pace of growth was not warranted by its Grenelle Environment Round Table installation target of 1,100 MWp by the end of 2012 and 5,400 MWp by 2020.
The National Renewable Energy Action Plan (NREAP), drawn up for the Renewable Energies Directive, had trimmed the photovoltaic target to 4860 MWp by the 2020 dateline, to leave about 540 MWp available for concentrated solar power (CSP) production. For the time being, the Grenelle policy target remains unchallenged despite the drop in installation costs.
The French government thus lowered its sights and partially suspended the obligation to purchase electricity from non-residential photovoltaic installations for three months, starting on 9 December 2010. It used the time as breathing space to set up new legislation for exercising better and longer-term control over the number of project applications and amount of additional capacity coming on stream. The new support system was announced in March 2011.
Output of over 22 TWh
According to EurObserv’ER’s estimates, 22.5 TWh of photovoltaic electricity were produced in EU-27 in 2010. “The photovoltaic sector is continuing on track, just as the extent of solar energy’s electricity-generating potential is dawning on the public mind,” said the authors of the latest solar barometer.
Europe continued to lead photovoltaic plant installation with over 80% of global installed capacity, ahead of the other major markets which built up capacity in 2010. Japan installed just under one GW in 2010 (483 MWp in 2009). The United States are expected to have added about 800 MWp in 2010 (against 473 MWp in 2009). For China at least 400 MWp new capacity is expected in 2010 (compared to about 160 MWp in 2009).
Bright future… with caveats
Looking forward, it appears that Europe will continue to perform well in the solar sector, with EurObserv’ER’s reporting that “the pace of solar sector development is likely to quicken a few years ahead of the directive deadline and with it the likelihood of greater solar power input into the electricity production system”.
Hence, the report’s authors consider that the 84 376 MWp figure for photovoltaic power (including 51753 MWp in Germany) announced by the 27 EU Member States through their NREAP plans should be viewed as seriously understated.
In EPIA’s Solar Generation 6 publication, which came out in February 2011, three growth scenarios were defined for each of the world’s major regions. The baseline scenario is founded on an analysis of a like-named scenario published by the International Energy Agency in its 2009 World Energy Outlook, with data extrapolated to 2030. Its accumulated capacity forecast for the European members of the OECD is 30 GW in 2020 (rising to 38 GW in 2030). “This figure is totally outdated as it more or less matches the capacity figure achieved by Europe at the end of 2010,” says EurObserv’ER.
The accelerated scenario presumes no changes will be made to the policies established at the beginning of 2010. It puts European accumulated capacity at 140 GWp in 2020 and at 280 GWp in 2030.
Lastly, the paradigm shift scenario, the sector’s ideal scenario calls for strong policy backing to replace the maximum share of fossil fuel by renewable energies and solar power in particular. In this scenario, Europe photovoltaic capacity would rise to 366 GWp in 2020 and 631 GWp in 2030. It means that by 2020, photovoltaic power could meet up to 12% of Europe’s electricity demand.
In principle, the accelerated scenario could be derailed by the recent backtracking by a number of European countries keen to have the upper hand on the expansion of their domestic markets.
These measures could turn out to be temporary if, as the manufacturers claim, the reduction in costs is maintained with grid parity achievable before 2020.
“Most of the national experts polled during our survey were guarded about the likelihood of their national targets being exceeded,” explains EurObserv’ER. “Hence we are watering down our enthusiasm about the sector’s growth possibilities in the European Union and are forecasting 104 GWp in 2020.”
This growth level, says EurObserv’ER, will also depend on the European industry’s capacity for innovation. “The incentive systems set up in Europe (indirectly) finance increased competitiveness in the global industry. Policy-makers may be less inclined to support the solar photovoltaic sector if the European industry collapses and fails to turn the growth of the European and global markets to its advantage”.
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