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EU PV Market: Trends and Developments

For the first time ever, Europe added more PV than wind capacity during the past year. Europe has taken advantage of providing 70% of global operating PV systems which over a half are in Germany. In the past year, Europe has installed 13 GW, while the rest of the world has provided only 3 GW to the total amount.
The exact volume of cumulative quantity is 29,252 MW coming from Europe led by three countries operating in the region: Germany, Spain and Italy. They have cumulative capacity of 24,471 MW. Solar energy has been and remains to be the vanguard of renewable energies. Supporting this seamless technology is way to the 21st century economic development and it has been perceived by the German society. After the Fukushima nuclear accident, Germany has decided to take a change of direction towards 100% renewable strategy advancing to the trend of the market. The governments of other EU nations should note and apply the recipe to avoid falling behind in the near future and begin to have energy independence increasingly necessary given the evidence of fossil fuel depletion.

By Aitor Manero

 

 

The solar market has experienced an unstoppable upward growth in recent years and the forecast is to maintain this trend for a sustained period of time, at least a decade. The combination of declining spending on raw materials and manufacturing added to R&D advances is putting the electricity generation costs nearly equal to any other technology. In the coming years, it will be the same to produce electricity with photovoltaic modules as with thermal, hydroelectric or nuclear systems... we will have achieved grid parity. Despite the global crisis, pressure from the lobbies and absurd bureaucratic constraints of some governments, the cumulative power installed globally by 2010 is over 40 GW.

Sustainability, competitiveness and security of supply are the key elements that guide the EU’s energy policy since its inception. The next logical step in the Common Energy Policy has been implementing efficiency plans, some of which are based on integrating renewable energy production in the energy mix as a main line to the generation of CO2-free electricity. But the psychological blow of the nuclear accident in Japan has relocated the strategy of some governments, such as Germany, advancing to the logic of the market and using the purest common sense has decided to make a change in its energy strategy, implementing all its capabilities to eradicate the deadly nuclear power plants in Germany and investing in renewable energy with specific dates. Everyday more people have no doubt about the wealth and prosperity of the future economies based on them. Hopefully, the spillover effect will spread to other countries, although in countries like France, whose bid for decades is based on radioactivity, will start late.

 

PV in Europe

 

An estimated 17 GW of PV capacity was added worldwide in 2010 against just under 7.3 GW in 2009, bringing the global total to around 40 GW, more than seven times the capacity in operation five years earlier. For the first time ever, Europe added more PV than wind capacity during the past year. Europe has taken advantage of providing 70% of global operating PV systems which over a half are in Germany. In the past year, Europe has installed 13 GW, while the rest of the world has provided only 3 GW to the total amount. The exact volume of cumulative quantity is 29,252 MW coming from Europe led by three countries operating in the region: Germany, Spain and Italy. They have cumulative capacity of 24,471 MW. The demand for PV installations increased in Germany and Italy while declined drastically in Spain due to a restrictive change in laws and the spectacular decrease of feed-in tariffs approved by the government in 2009.

Germany is the biggest and strongest PV market across the globe with 17 GW of cumulative installed capacity. It is expected that the country will continue to grow in terms of growth in the PV sector in the near future. In 2010, Germany represented more than half of the entire European capacity with a share of 57%.

Italy is regarded as the market with the highest potential in the region with an annual installed capacity of 2.3 GW of capacity, bringing the official total to nearly 3.5 GW at the end of 2011. The country receives high level of solar radiation and the new guideline set by Conto Energia in 2010 is likely to sustain the momentum.

Spain registered growth in the PV sector since 2008. The growth achieved in 2008 can be reiterated from the fact that the annual installed capacity increased from 542 MW in 2007 to 2,708 MW in 2008. The fixation of maximum ceiling along with the global financial crisis had a negative effect on the economy, thereby registering a massive fall in the number of annual installations in 2009. In the succeeding year, the country experienced political turmoil which held the PV market in the country.

 

PV Technology Advancements and Price Trends

 

The costs of production, installation and distribution have plummeted, creating a perfect setting for global expansion. Under the impulse of R&D for automation and efficiency of production processes, the significant drop in the price of silicon and enabling positive regulatory frameworks (except for some countries like Spain or France), it is expected that the next decade will see current costs fall between 35 and 50%. It is the result of early maturation of a very young industry that is having a strong positive impact on all levels and is becoming an essential energy source in Europe. Their contribution is critical to achieving 20% of electricity consumption coming from renewable production in 2020, and if the European countries do a special effort, the increasingly widespread claim to reach 100% clean energy sources for 2050 is perfectly possible.

The above objectives can be carried out in the most cost effective way if we consider certain key aspects. The magnitude of such plans requires strategic investment in advanced technology research. It must be the axis on which all initiatives move around. Some of the elements that put solar PV as a young promise for a strong presence in the global energy market are: PV does not consume fuel to operate; PV produces no waste, no pollution; the maintenance required is minimal; PV is safe and totally silent; the panels resist extreme weather conditions (hail, wind, temperature, humidity); because the sun never ends (OK, it will finish in a few million years) PV has excellent operational availability and is highly reliable; and the cells have a lifespan of more than 40 years. At the socioeconomic level, photovoltaic sources have the unbeatable advantage that it avoids dependence on oil and coal producers.

To secure these plans, a section to be improved is the performance of photovoltaic modules that currently stands at around 15%. There are ongoing investigations with laboratory results that achieve a 20% yield of crystalline silicon cells as the case of the Polytechnic University of Barcelona and up to 35% for Germany’s Fraunhofer Institute, which uses cells with special components as gallium arseniure, indium phosphide and germanium. This way, for those not familiar with the technical aspects of solar energy, it seems that only 15% take advantage of the product. For avoidance of doubt, it should be clear that the module generates 100% of the energy that has the capacity to generate, with a slight decrease over time, but only uses 15% of the light it receives from the sun. The solution is investing in R&D to gain an increase in the percentage of utilization of impacting radiation on the surface of the module. The photovoltaic mellowing is nearest every day and can be competitive leaving direct aid from governments through grants and subsidies. What is necessary is lower costs and better efficiency in the next years. That is, undercut the current prices and produce more electricity with the same surface of installed modules. The key issue is the commitment to invest in R&D from private investors and public administration.

 

Interest in Building-Integrated PV (BIPV) and off-grid systems also increased in 2010 and extended beyond the traditional markets of France and Germany. Now some important voices call for legislative changes to facilitate market penetration of solutions for isolated houses and especially for consumption within cities and towns even if they have good infrastructure to transport electricity. Some important module manufacturing companies see in this section the ability to overcome the current problems. Energy efficiency in buildings combined with the consumption is an untapped market which predicts a very large business niche if governments do not put impediments.

PV system prices have gone down by 50% in the last 5 years and will continue to decrease in the coming decade, and over the last 20 years, price of PV modules decreased by over 20% every time the cumulative sold volume of PV modules has doubled. System prices have had parallel declination achieving 50% reduction price in the last 5 years in Europe and are expected to decrease in the next 10 years by 36-51% depending on the segment. Importantly, there is a huge potential for further generation cost decline: around 50% until 2020. The cost of PV electricity generation in Europe could decrease from a range of 0.16-0.35 €/kWh in 2010 to a range of 0.08-0.18 €/kWh in 2020 depending on system size and irradiance level. This will lead PV’s generation cost to go down while the cost of electricity in general goes up. As a result, most optimists say PV will be able to reach full competitiveness with grid electricity as early as 2013 in the commercial segment in Italy and before 2020 for all market segments in countries with mature markets and efficient support schemes.

 

Towards Energy Independence

 

To reach the grid parity, market development must occur in all countries and all market segments, support schemes (including FiTs) need to be adapted on a regular basis to avoid market disturbance, administrative barriers must be removed and procedures streamlined so that additional costs do not increase total PV system prices, grid connections must be simple and easily authorized, and priority access to the grid for PV electricity should be ensured, political commitment to continuous research and development must be assured. And most importantly, PV should be considered a low-risk investment; therefore, reasonable profits should be taken in line with that risk level.

Solar energy has been and remains to be the vanguard of renewable energies. Supporting this seamless technology is way to the 21st century economic development and it has been perceived by the German society. After the Fukushima nuclear accident, Germany has decided to take a change of direction towards 100% renewable strategy advancing to the trend of the market. It is quite surprising because it’s innovative and because it’s being led by the government of a major European economy and, by extension, the world. The governments of other EU nations should note and apply the recipe to avoid falling behind in the near future and begin to have energy independence increasingly necessary given the evidence of fossil fuel depletion.

 

We are in living the dawn of a new world in which dirty energy producers of CO2 and highly harmful radioactive waste have been clearly obsolete, but do not yield consistent solutions to modern times despite the uncertainty, insecurity and climate change they are driving the people. Against these issues, we have a society becoming increasingly concerned on sustainability, safety and clean technology development guaranteed by the photovoltaic solar energy.

 

Aitor Manero is Marketing & Communication Director at Eurener Group (www.eurener.com). Educated as graphic designer, Manero soon started his career in Spanish broadcasting companies RTVV and Canal Extremadura. After a freelance experience with Feria Valencia, WebTV Productions, e-TV Group and other companies, he entered Eurener Group as full-time Marketing & Communication Director.

 

 

For more information, please send your e-mails to pved@infothe.com.

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