Reported by Jeanny H. Lim

What do you see as the trends and market forces driving PV technology in the second half of 2011?

There are two market forces driving the overall PV market: drive to grid parity and larger power plants. Grid parity means bringing down the cost of solar power to a level where subsidies are no longer needed. As for larger power plants, solar power generation has evolved from rooftop and commercial installations to utility-scale solar power plants. However, as more utility-scale plants are brought online, utilities and ISOs are imposing interconnection requirements for solar plants (much like what happened in the wind industry). Examples of this trend can be seen in the U.S.A., Spain, Australia and Germany.

How are PV prices expected to develop in the second half?

Overall, we expect that the cost of solar will continue to decline. This is due in large part to the competition being seen in the panel market, but also among inverter companies. The good news is that this will make solar even more competitive with conventional fossil fuels and will reduce solar’s reliance on government support mechanisms.

However, while prices will be reduced, we also will see a greater focus on value added components. In other words, if a solution includes inverters, plant monitoring, SCADA and remote communication and grid management, the developer has the chance to optimize and reduce the Balance of System components, thus reducing total installed cost. One other trend is the increase in plant up-time. By increasing the availability and reliability of the solar plant, up-time is increased and thus energy harvest is maximized, which will ultimately bring down the cost of solar power.

Where do you put your focus this year, in terms of business growth and technology development?

For business growth, we are focused on utility-scale plants. Our technology is focused on reducing the cost of energy, grid management and overall plant health, all of which are paramount to drive the solar industry to grid parity.

With uncertainty circling the funding of PV systems in countries around the world, what challenges are market participants facing and what are the potential solutions?

There’s always cost pressure. That’s every market. Europe has been more aggressive with respect to starting out with solar and is therefore ahead of other regions. We see a lot of the other markets catching up to the levels of PV integration that we see in Europe, especially in Germany. I think with the changes what you’re going to find is people are going to look at the return on investment a little bit differently. They are going to look at more long-term cost, the Levalized Cost Of Energy (LCOE). They are going to look at what their plant performance is, how often their plant is tripping offline because if the plant trips offline, the owner is not making a revenue. Overall, utility-plant owners are looking at long-term costs differently because they will need to have a better return on investment.

At AMSC, we’ve been working in grid interconnection in the wind industry for multiple years and we based our SolarTie™ grid Interconnection system on the same technology, which can help get plant owners a better retern on investment. Owners require a robust interconnection system that can ride through grid disturbances, keep the plant online and also help the grid recovers as quick as possible so owners can be maximize generation time. Overall, plant owners should be focused on maximizing power generation, which will lead to a lower cost of energy and help to drive the growth of the solar power industry.

Jeanny H. Lim is Editor-in-Chief of InterPV. Send your comments to swied@infothe.com.