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Global PV Solar Growth


Solar Growth

As can be seen from the graph at the left, the solar industry has seen remarkable 2010 growth as a rebound from the recent recession. The bars represent the actual annual installed amount of PV solar systems by manufacturers expressed in giga-watts (1 GW = 1 billion watts). The approx-imate growth rate from 2007 to 2011 was 60% per year! For reference purposes, one nuclear reactor produces about 1.3 GW of electricity. The growth rate from 2009 to 2010 was a whopping 143%. We are forecasting 14% for 2011. The reason for the slowdown in 2011 is the reduction of incentives in several European countries. While the growth numbers are very impressive, the 20 giga-watts to be installed in 2011 is just a fraction of one percent of the total amount of electricity that will be generated this year by all sources. The forecast for 2011 and 2012 is a compilation of data from GTM Research, IMS Research, iSupply, and the author. After 2011, the long term growth estimates range from 20% to 30%.

 

There was about 35 GW of PV solar installed in the world at the end of 2010. It’s roughly divided into thirds as to that which comes from residential rooftops, from commercial buildings like hotels or malls, and from utility plants connected to the grid. The utility market has just recently been taking off. It is the market segment that has been the most influential in the growth rate over the last few years. Where solar makes a big difference is during the time of day when electricity is needed most, those hot summer afternoons when air conditioners are running almost constantly. This is when solar can add significant contributions to the grid at less cost than other sources. When you also throw in the pressure to go “green”, you can see why the future for this technology is bright.    Top

PV Solar Installations By Country

 Country 2009 2010 2011 2012
 Germany 3.8 7.3 6.5 5.8
 Italy 0.7 3.9 4.0 2.0
 United States 0.4 0.9 2.0 4.5
 Japan 0.5 1.0 1.4 2.0
 Czech Republic 0.5 1.2 0.5 0.2
 China 0.2 0.7 1.5 3.0
 India 0.0 0.1 0.8 1.2
 ROTW 1.1 2.4 3.3 5.3
 Total Market 7.2 17.5 20.0 24.0

As can be seen from the chart at the left, Germany is by far the leader in solar power. Germany has a goal to discontinue all nuclear power by the year 2020 and replace it with renewable resources. This goal prompted a government policy called feed-in-tariffs (FITs). A feed-in-tariff is a policy designed to encourage the adoption of renewable energy of all kinds to help accelerate the cost of renewables move towards grid parity. FITs typically include three provisions: 1) guaranteed grid access, 2) long-term contracts for the electricity produced, and 3) prices that are based on the cost of renewable energy generation with a downward trend towards grid parity. They include besides PV solar, other technologies such as concentrated solar power (CSP), wind, and geothermal.

 

In almost all of Africa, Pakistan, Hawaii, Italy and large portions of Japan, the price of electricity is already in excess of what the cost of electricity is from solar. Therefore there is a ready market for today’s solar electricity without any subsidies. As the price of solar electricity comes down every year, more and more locations will benefit from making the switch to solar when new capacity is added.

 

Other countries with major PV feed-in-tariff programs are Italy and Japan. These countries will help take up the growth slack from Germany who has achieved their initial goals and will be reducing incentives in the future. As can be seen above, the US is way behind in installations. The US has considered a feed-in-tariff but has yet to form a federal concensus to pass legislation. However, there are 14 US States and the District of Columbia that regulate retail electricity markets in which customers may choose “alternative” power suppliers. In addition, some states such as California and Arizona, have implemented their own aggressive incentive programs to encourage alternative power. The US, especially California and Arizona, have several extremely large installations in progress, which when finished will catapult the US into a major position internationally.   Top

Market Share Forecast By Region

Thin Film Market Share

Germany has over whelmingly dominated the worldwide solar markets the last few years. However, Germany has made the decision to “gradually” reduce their feed-in-tariffs (FITs) over the next few years until the market price equals “grid parity”. See the chart to the left. This is causing a “redistribution”, but not a reduction in the total annual newly installed PV solar market. Spain has already reduced their FIT, but the rest of the EMEA (Europe, Middle East & Africa) is taking up the slack. China, Japan and the US are seeing dramatic growth. The big question is how much will the total market grow? 2011 is expected to grow about 15% due to the re-distribution mentioned above. After 2011, the long term growth estimates range from 20% to 30%.   Top

Market Share By Technology

Thin Film Market Share

The leader by far in thin film technology is First Solar whose cadmium telluride panel manufacturing costs are roughly one half those of crystalline cells. Crystalline wafers are about 200 microns (a micron = one millionth of a meter) thick. In contrast, thin-film panels are made by vacuum depositing several layers of semi-conductor materials only a few microns thick. Silicon in its pure form (99.9999% pure for solar applications) is very expensive and makes up about 50% of the cost of crystalline panels vs. the semiconductor cost of about 2% in thin film panels. However, thin film panels are not as efficient as crystalline panels and therefore more thin film panels are required to generate the same amount of electricity. A thin film installation can take up to 40 percent more space (and land) to achieve the same total power output as a premium crystalline installation. Thin film is strongest in the utility scale market because the cost of panels outweighs the cost of land in this market. Sharp and a few others are trying to make thin film silicon a success in the utility market.  On the other hand, Chinese suppliers using crystalline silicon are coming on strong. They operate on thinner margins and depend on huge volumes to get their costs down. In 2010 Suntech and JA Solar topped First Solar in cell shipments. Of the five top cell producers in 2010, four were Chinese using crystalline silicon.   Top

US PV Market Growth

Thin Film Market Share

Shown at the left are the recent annual solar installations in the US. Note that at the end of 2010 installations totaled 878 MW, a 102% increase over 435 in 2009. The previous annual growth rate from 2005 to 2009 was 38%. The US is forecast to grow 120% to about 2.0 GW in 2011 as utilities across the country come on strong. Up until now, utility installations have been weak due to lack of strong solar support from the Federal Government compared to Germany or Italy. In recent years state governments have taken up the slack and the results have begun to show during 2010.

 

The dark blue on the bottom of the bars represents the first quarter,, the medium blue is the 2nd quarter, the purple is the 3rd quarter, and the turquoise is the 4th quarter. In addition, preliminary data show that US installed prices have declined about 10% during 2010.

 

 

US PV Forecast By Market Segment

US Solar Installations Q3-2010

By the chart at the left, you can see that the utility sector demand is just starting to take off in the US. In the future, the utility sector will be the key sector of US solar growth.  One of the major barriers to utility growth has been financing. A 100 MW to 250 MW installation can cost from $1 billion to $2 billion dollars. Only the very largest banks and the US Government can afford that kind of money. The recent recession saw many banks reduce their lending policies and very few utility scale deals were done.

 

The Obama administration has agreed to guarantee up to 75% of the cost of some of the proposed large new installations. This has helped several large deals get off the ground. However, in order to satisfy the requirements that the loan will in fact be paid off, government due diligence has delayed quite a few projects. In addition, the 30% cash Treasury Grant Program (TPG) for renewable equipment was due to expire at the end of 2010. This has now been renewed until the end of 2011.At the end of 2010, 1179 solar projects had been helped by this program with funding of $1.3 billion. While this not a long term funding program (ala Germany), it will definitely help keep solar growing during 2011.   Top

US CSP Market Growth

US CSP Forecast

Shown on the left is the forecast for CSP (Concentrated Solar Power). In 2010 the demand for CSP was insignificant. However, there are several very large projects underway, especially in California and one in Arizona, that are very significant systems. CSP is almost exclusively a utility sector technology as it requires a conventional steam turbine to convert heat stored in liquid salt into electrical energy. See the Parabolic Trough Solar Systems section. The exception is Stirling type engines that do their own conversion. See Dish Stirling Systems section.

While trough systems do use some water (not excessive), they have two major advantages. First, they can be part of a hybrid system that shares the steam turbine system with an auxiliary gas fired front end turbine that can be used on cloudy days and at night. Secondly, they can store sunlight energy in the form of molten salt for up to an additional 6 hours which covers the peak demand period during the summer when people get home from work and turn on their air conditioners. Depending on a utility’s portfolio of electricity generators, these advantages can be very important. California has one 1,500 MW system and two 2,000 MW systems coming on stream in 2013, 2014 and 2015.

 

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