About the article: This special Renewable Energy Focus power generation focus previews REMIPEG's latest update, carried out in the first four months of 2011 by Lahmeyer International, and presents an overview for each renewable power sector, based on scenarios up to the end of 2010.
This article is taken from the July/August issue of Renewable Energy Focus (REFocus) magazine. For a free subscription, click here.
Forecasts for PV growth rates early in 2010 were fuelled by the continuous increases that had been witnessed over the previous few years. And the final installed capacity figures at the end of last year didn't disappoint; global cumulative installed capacity at the end of 2010 had reached almost 40 GW - a stunning gain of 72% from the previous year, 2009. Newly-installed capacity at the end of 2010 had increased by 135% on 2009 (16.6 GW).
Europe maintained its leading market position for 2010 with around 85% of global capacity installed in the region (though this meant mainly Germany, Spain and Italy). Around 9% was installed in Asian countries, while North America's cumulative installations amounted to around 8% (the majority in one State, California).
Thirty (30) GW of the world's total solar PV power installed by the end of 2010 was located in only five countries. The estimated total electricity generated by solar PV plants reached 50 TWh (see table).
One major global trend in PV during 2010 was the increase in size and scale of grid-connected ground mounted PV power plants. The largest PV plant connected to the grid at the end of 2010 was the 97 MW Sarnia PV power plant in Canada (whose commercial start up was phased in during 2009 and 2010); followed by the 84 MW Montalto di Castro plant in Italy (also constructed in 2009 and 2010). Third was the 80MW Finsterwalde solar park in Germany, which uses modules.
This tendency towards larger size PV plants seems set to continue, with the development of several projects in the 100 MW range (and higher). One example of this is Masdar's Nour One project in Abu Dhabi, which is expected to be constructed in 2012/2013.
Few markets remained dominant
Germany remained the most important solar PV market in 2010, with 45% of the newly-installed capacity worldwide.
While in earlier years a large proportion of Germany's installed capacity was rooftop based, larger, ground-mounted plants played a more important role in 2010. More than 40% of all German installations were 100 kWp or larger (although among these, there is still a substantial amount of roof-top projects, since these are getting larger as well).
The largest ground-mounted projects installed in 2010 in Germany were:
- Finsterwalde (Q-Cells, 80 MW);
- Solarpark Ernsthof (LDK modules, relatio as developer, 34.5 MW);
- Solarpark FinowTower (Suntech Power modules, Solarhybrid AG as developer, 24.24 MW);
- Solarpark Thüngen (Conergy modules and developer, 18 MW).
These have to be seen beside several other large scale ground mounted projects, installed earlier, like Strasskirchen (54 MW) or Lieberose (53 MW).
Italy's market almost reached 3.5 GW of cumulated installed PV power in 2010. This is a major increase compared to the total installed PV power at the end of 2009 (1.1 GW). During 2010 about 2,300MW was installed, an increase of 190% compared to the 795 MW installed in 2009.
France overachieved in 2010 with a total of 720 MW installed, leading to cumulatively installed PV installations of just over 1 GW. In March 2011 a new FiT was announced, which more or less prohibits facilities of more than 100 kWp when planned independently. To protect the large-scale PV market in France against this strategy, commercial sites will be tendered in accordance with the Government's goals for yearly annexes. FiTs for privately-owned small-scale systems (less than 100 kWp) will be revised on a 3-monthly basis, and adjusted according to the previous ruling.
In 2010 a total of 1.5 GW of new capacity was installed in the Czech Republic. However, the country has cut tariffs in half for facilities above 30 kWp. This makes the forecast for 2011 poor, with an estimated 350 MW of newly-installed capacity. This would be equal to a drop of 70%.
Summary of the global solar PV market, data up until the end of 2010 (source: EPIA - Global Market Outlook for PV until 2015; experts' estimates)
| ||Cumulated installed capacity 2010 (GW) ||Newly installed capacity 2010 (GW) ||Estimated electricity generation 2010 (TWh/year) |
|Europe ||30.2 ||14.7 ||38.9 |
|North America ||2.8 ||1.3 ||5.5 |
|South America ||~0 ||~0 ||<0.1 |
|Asia ||5.1 ||1.5 ||11 |
|Africa ||0.1 ||~0 ||0.1 |
|Oceania ||0.5 ||0.3 ||1.5 |
|World total ||39.5 |
|Largest national market ||Germany 17.2 ||Germany 7.4 || Germany 12.5 |
Following market meltdown in 2009, Spain's PV market regained some momentum - with around 370 MW connected in 2010. This is an increase of almost 2000% compared to the miniscule 17 MW installed in 2009. However, even 370 MW is still only slightly above 10% of what was achieved in Spain's boom years: back in 2008 Spain was one of the most important markets for the PV industry, with more than 3.3 GW installed. The recent recovery is more due to lower component prices and favourable irradiation. But capacity growth of more than 1 GW a year could be a thing of the past.
The U.S. nearly doubled the amount of newly-installed capacity, and ended up installing just under 1 GW in 2010. As there is no overall U.S. market for solar PV, markets are more or less State-based, sometimes being driven in a region by individual utility companies.
With expected drops in important markets all over Europe, the hope for the U.S. is substantial growth for solar PV. The U.S. has excellent solar resource in many States, as well as availability of land for PV facilities (though there remain big problems with permitting). Colorado moved into the top five states for installed capacity in 2010, behind Arizona and Nevada. California still constitutes the major market (almost 30% of new installations) and New Jersey remained at number two with about 15%.
Markets to watch remain India and China. India plans to have a total of 22 GW of solar PV installed by 2022, starting from a low base of only a few MWs. This could also help to electrify rural areas within India, where 40% of households still lack basic access to electricity.
China will start investing in solar PV not only to help its burgeoning module supply industry (which has flooded the global market in recent times, leading to oversupply), but also to reduce its dependence on gas, oil and coal. China has a vast potential solar resource.
Pricing of PV projects look set to fall further
Even though PV technology costs have steadily fallen, the PV industry needs to drive down the levelised cost of electricity (LCOE) of the technology even further, especially in light of declining incentives.
In terms of manufacturing costs, module prices declined another 20%–30% in 2010, while the cost of other components stayed more or less the same. Since modules make up about 50%-60% of PV systems' costs, this had a substantial impact on system costs.
As of spring 2011 for example, German companies involved in EPC projects (in the low MW range) were offering prices of around €2,100 per kilowatt peak. And even lower EPC prices for larger size projects could be possible moving forward.
Of course, outside of Germany EPC prices remain higher due to differing market conditions, but take into account the expected downsize in demand due to slowing markets in Europe, and the highly-competitive global PV market for modules, and further declines in system prices globally seem likely. Whether these system cost reductions will compensate for falling FiT revenue is uncertain, but falling system prices - while difficult for short term profitability - are ultimately a good thing for the industry.
As in previous years, crystalline silicon-based modules (mono- and polycrystalline) made up the largest share of solar PV modules manufactured, about 90% (around 10% thin film). In terms of newly-installed production capacity added in 2010, thin film accounted for around 20%, giving it a cumulative share of 10%-20% in the global marketplace (at the end of 2010).
Other technologies (such as Concentrating Photovoltaics - CPV - still have not achieved a noticeable market share). However, a major breakthrough for the CPV market was achieved in early 2011, when Concentrix (now Soitec) was chosen to provide CPV technology for a huge solar plant in Southern California: Tenaska Solar Ventures plans to build a Solar Energy Center (ISEC WEST), which will provide 150 MW of power when it is completed in 2015. The use of Fresnel lenses – which concentrate direct solar irradiation on highly-efficient CPV cells – may kick start the technology from laboratory-scale research to utility-scale applications.
Competition among the module suppliers was the main driver behind the decline in module prices. Asian module suppliers priced aggressively, particularly those coming from China. In Germany for example, the majority of modules sold in 2010 were imported from Asia (China), whereas only around 12% were physically manufactured in Germany.
Thin film modules continued to push onto the global markets, with First Solar continuing its relentless push during 2010. Going forward, CIS and CIGS modules will soon be offered in meaningful quantities by several global players such as Bosch Solar, Q-Cells and Solar Frontier, having improved efficiency rates (above 12%).
However, it will be interesting to see when the inevitable decline in the cost of silicon will take away one of the crucial competitive advantages of thin film, and what effect that has on technology selection. What seems likely is that, as always, each of the technologies will continue to have its own niche markets, whether that be location or application; on grid or off grid, utility scale or rooftop.
Regarding global production capacities:
- PV supply capability (so called nameplate capacity) exceeded demand in 2010. Total global production capacity for modules worldwide was between 33 and 36 GW, far beyond the newly-installed capacity of around 16.6 GW in 2010;
- Global production capacity for silicon was around 350,000 tonnes;
- Global production of wafers was between 30 and 35 GW in 2010, of which more than 55% was located in China; Germany accounted for around 10% of wafer production capacity;
- Crystalline Silicon cell production is now mainly located in Asia. In 2010 it was estimated to be around 27-28 GW, of which 50% was located in China. Module production of c-Si was slightly higher and was probably in the range of 30 to 32 GW; In 2010, global thin film production reached around 3.5 GW.
(Source - EPIA: Global Market Outlook for Photovoltaics until 2015; 2011)
Part five: Solar CSP - strong 2010, but at a crossroads...