By Jorn Brembach
Photovoltaics (PV) had not been considered significant in the future of alternative energy supply until only a few years ago. Japan and Germany led the way in heavy promotion of its potential, stimulating significant market growth. In many countries there was little political support because the cost of harnessing solar energy was initially very high. A huge growth in demand, particularly in Germany, however, boosted the mass production of solar modules to such an extent that costs dropped more steeply than expected. As yet, there is no foreseeable end in sight to this trend.
Global Market Trends
In Germany and southern Europe, it is already possible to produce solar electricity that costs no more than main electricity (grid parity). This has failed to make an impact, however, as the markets have been heavily subsidized. Up until now, the solar market has focused investment on Feed-in Tariffs (FiTs).
With grid parity, the sales approach for PV systems is on the brink of change. The industry cannot sell a return in a subsidised business any longer─what the sector sells is now clearly going to be nothing but a power product. PV companies are having to currently go through a learning curve in order to understand how to sell clean power solutions without subsidies. With this fundamental shift from a subsidy-based industry to a truly competitive one, PV prices are rapidly falling. PV electricity will thus soon be competitive with residential and commercial electricity prices worldwide.
Consequently, support for photovoltaics has been growing throughout Europe, North America, and Asia. Years of vigorous growth in the world-wide PV market has continued, despite the financial and economic crises experienced in 2011. The volume of new grid-connected PV capacity world-wide rose from 16.6 GW in 2010 to 27.7 GW in 2011. Faster than expected growth in China and the United Kingdom helped to raise the latest 2011 global PV market figures by as much as 22%. Chinese market development comes at an opportune time for domestic manufacturers, as European markets will no longer outpace home production. Further new markets will have to be opened up to drive PV development in the coming decade just as Europe accounted for the bulk of growth during the last decade. Solar companies are now going to face the challenge of re-building margins during a period of increased diversity in the end solar market mix. In light of the current debate on the business models adapted by the industry, with focus on vertical integration and technological diversification, PV manufacturers will need to tread carefully to find the right path.
Germany’s Module Industry
Europe accounted for 75% of all new capacity in 2011, making it the dominant player in the global PV market. Italy and Germany, Europe’s two biggest markets for photovoltaics, accounted for nearly 60% of global market growth in 2011.
Germany in particular has gained a reputation as one of the cradles of the global solar industry. Over the last ten years, more than 100 companies have become active in Germany along all stages of the value-added chain for solar products. Although stronger global orientation of the industry in the past few years combined with fiercer competition has resulted in a reshuffling of the market, Germany’s solar market remained stable in 2011 as compared with 2010.
As customers try to take advantage of guaranteed incentives while they remain relatively high, the main reason for high demand continued to be low prices for solar modules, fuelled by falling subsidies and the fear of further incentive cuts. According to preliminary estimates, new installations are expected to remain stable as compared to 2010, where solar installations reached a record 7.4 Gigawatts (GW). In the last quarter of 2011, PV installations reached approximately 4 GW even after German network regulator Bundesnetzagentur stated that new installations in the January-September period stood at 3.4 GW.
In order to force the industry to lower its prices and become more competitive, the German government has been looking for ways to scrap support for the sector and administer large cuts to feed-in tariffs. From July 1, 2012, so-called feed-in tariffs (subsidies that were initially used to boost the sector’s competitiveness vis-a-vis energy derived from fossil fuels) will be drastically reduced by another 15%.
Germany’s Economy Ministry also released a paper in November 2011, detailing a proposal to reduce the growth of new photovoltaic installations to 1,000 Megawatts (MW) a year, a move that would dethrone the country as the world’s largest market for solar panels. A similar move caused Spain to shrink from the world’s biggest market in 2008 to an expected No.8 position in 2011.
In light of these developments, the majority of industry representatives predict that the next few years will be decisive for the German PV manufacturing industry. If the political framework continues to be in favour of PV growth, the country will be able to further strengthen its role as a key location for production. With its high density of research centres, production plants and certification providers, Germany has huge potential in the solar energy sector.
Quality Is Still Key to the Photovoltaic Market
Solar installations are considered a lucrative long-term investment. The fact that PV installations have an operational life of 20 years and that investment costs are 1,600 to 2,000 Euros per kilowatt of solar power serves to enhance the attractiveness of a long-term investment promising systemic stability as well as huge potential for increased demand. Moreover, since the only hurdle for residential and commercial use now lies in the initial investment costs, PV certification is vital to prove the product quality as well as the expected lifespan.
Differentiation through Certification
The recent rapid growth of testing laboratories testifies to the importance of quality, safety and proven performance in the manufacture of PV modules. Certified PV modules reach the market with both a proven lifespan and the guarantee of a lack of defects that could potentially have detrimental effect on performance.
Not known for its sunny weather, currently Germany is perhaps surprisingly the second largest in terms of solar energy generation worldwide, after Spain, a country sporting a large number of manufacturers. The SGS Solar Testhouse in Dresden, Germany, is a particularly fine example of expertise in PV module testing services. SGS also has PV testing laboratories in key locations and markets worldwide; all are ISO 17025 accredited and offer a full range of PV testing and certification services.
Power inverters covered by IEC 62109-1 are also offered safety testing services by SGS-CEBEC, as well as large PV systems. SGS offers certification for ‘connection/disconnection from grid’, ensuring voltage fluctuations remain within required limits when connection is made to networks of medium voltage. Through its SSC (Systems and Services Certification) division, SGS also verifies electrical installations that have adopted or added photovoltaic systems or have undergone other such major adaptations.
Certification of solar systems benefits manufacturers, contractors, consumers, and government agencies by establishing credibility and acceptance. Standardized methods for measuring product performance and durability as well as certification standards serve as a rational basis for qualification for tax credit programs and help manufacturers to produce high quality PV modules and increase their market share, not to mention the added benefit of an increase in good reputation. The manufacturer’s initial investment can thus be made both profitable and secure.
Although voluntary, module certification has become a must for PV manufacturers, as buyers wish to ensure their substantial investment is worthwhile and will pay off over time. The importance of certification is reflected not only by the high number of certifications sold in Europe and the U.S. but also by the growth of the module qualification business in Asia. Certification standards are constantly being reviewed in industry working groups in order to improve testing requirements that will eventually lead to more efficient modules.
The most frequently employed method for comparing different types of solar module is performance testing under Standard Test Conditions (STC). Performance testing focuses on efficiency and durability, including measurement of criteria such as power efficiency, UV resistance, resistance to breakage caused by persons, objects or adverse weather conditions such as hail and so on. Standard test conditions are created in the laboratory so that the results output can only ever serve as a guide. Such test results do not necessarily align with the real yield of a roof-mounted or a free-standing module. The most common method for determining module output is the STC lab measurement using a flash solar simulator or a constant light solar simulator─outdoor measurements are taken less frequently.
While laboratory measurements can only provide a momentary assessment of module output, long-term tests in climatic chambers or outdoor tests under real conditions are much better qaulified to provide information about the quality of a PV system in the course of its life span. Tests in climatic chambers simulate the aging of solar modules as if taken with a time lapse camera. Outdoor tests submit modules to real environmental conditions for set time periods. These results reveal the long-term, real operational behavior.
To keep costs at bay, only two or three sample modules per producer are tested. The validity of such samples, however, is clearly limited in comparison with an annual production of several hundred thousand modules, even for mid-sized producers.
When PV modules are to be utilized under severe weather conditions, investors require additional performance certifications and guarantees, including for example, ammonia resistance, heavy snow load or desert resistance. In addition, if the PV module is to be installed in a coastal region, tests against salt mist corrosion resistance are also highly recommended.
Experts recommend looking at the longevity and durability of a PV system as well as the yield in comparison with the system output. While the yield of a solar modular system depends on local factors, system-specific factors, and the module parameters, the life span is strongly influenced by the product design, the material used, and the fastening system.
The most suitable method is the─relatively costly─climate chamber test. However, even this method is not entirely error-free. Frequently, this test only examines one form of exposure, where a combination of different stress factors, such as UV radiation in combination with moisture and heat stress would provide more effective and realistic test conditions.
Climate chamber tests do provide a good idea of the module quality, ideally in combination with a prolonged yield measurement in the field. Such long-term tests are particularly suitable for determining the actual yield volume.
Moreover, aspects of finishing, material testing, and the avoidance of transport damage and design errors have not yet been fully integrated in the common test procedures of the International Electrotechnical Commission (IEC). Today, independent institutes, such as the SGS Solar Testhouse, offer test procedures which go beyond this standard. For commercial customers and planners of large projects in particular, it is certainly worthwhile having the components tested as extensively as possible before the start of construction, followed by performance monitoring. Once again, the most conclusive test is the climate chamber test.
Testing during production itself is another approach, carried out in the factory hall. Although seemingly effective at first glance, its success depends on a multitude of factors. In addition to the very large procurement volume necessary to facilitate tests during production, the supplier also has to agree to these tests being carried out. Running such a complex service program over an extended period also requires considerable persistence on the part of the importer.
Therefore, an audit helps to validate the results of various module tests and estimate the risks of a project. If manufacturers subject their products and components to more stringent testing that exceeds testing specified in the standards, there is a reduced risk of damage at a later date, as certificates from the different test institutes available can vary considerably.
There is no such thing as absolute security; however, reasonable assessments can be made. Standards must, therefore, define the requirements to be met in order to achieve a measurable quality.
The objectives of standardization are to:
-Improve the quality of products and services;
-Define the metrics of quality;
-Meet the requirements of the global market efficiently;
-Support the PV sector in national, regional and global trade;
-Increase the efficiency of industrial manufacturing processes; and
-Simplify design work on component and system level.
Currently, there are various levels and organizations to perform such standards, reflecting the state of the art.
National level: Standards and in some countries technical recommendations (such as the CSTB in France, IEEE in the U.S.A.). These standards can be implemented in a relatively short period. Dozens of such national, regional or project specific standards exist for Photovoltaic components and systems all over the world. Harmonisation of all these standards is urgently required. Introducing standards on an international level from the beginning would have facilitated achieving international harmonization.
European level: CENELEC is elaborating and publishing a few standards (such as PV module labelling).
International level: International Electro technical Commission (IEC). 29 standards on PV are published with another 9 nearing IEC publication, as per May 2003. Many IEC standards are now being accepted as National Standards in various countries around the world.
Specific initiatives: PV GAP, World Bank, GTZ, EEC (programme tests, standards, reliability GENEC-92/96 + universal standard (Madrid-96) have all been launched in the past 15 years to ease and accelerate market introduction of PV products and systems.
The standards of IEC may potentially override all national and regional standards, whenever possible, in order to help ease international trade. The need for international, globally accepted standards is obvious primarily in order to avoid that many differing national and regional standards evolve, serving to hamper free market trade and making retesting against different standards for different markets necessary. It is through internationally accepted standards that PV costs will further decrease and this can only help ease trade in the PV global market. Solar companies will thus have to go through a learning curve in order to understand how to cope with fundamental market changes worldwide.
Jorn Brembach joined the leading testing and certification company, SGS (www.sgs.com/solar) in 2003. As Business Manager in Photovoltaics, he holds the civil engineer degree as well as an Executive MBA.
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