About the article: This special Renewable Energy Focus power generation focus previews REMIPEG's latest update, carried out in the first four months of 2012 by Lahmeyer International, and presents an overview for each renewable power sector, based on scenarios up to the end of 2011.
This article is taken from the July/August 2012 issue of Renewable Energy Focus (REFocus) magazine. For a free subscription, click here.
Part one - introduction (click here).
Part two - hydropower falls behind wind and biomass as growth dips
Part three - Wind market still on the up and dominated by China
STOP PRESS - SEE ALSO Year in review 2012: Solar PV, by Paula Mints.
Part four - Solar PV
DESPITE THE economic woes, policy instability and the headline grabbing demise of some big names in the sector, the photovoltaic (PV) industry had a blind-spelling year in 2011. Some 27.5GW of new PV capacity was connected to the grid. That is a mammoth 10.9GW (or 65%) more than in 2010 and took cumulative grid connected capacity close to 67GW by end 2011.
Total PV generation output during the year is estimated to be around 75TWh. This rises slightly when you factor in non-grid connected PV, which at 380W installed globally (mainly in developing countries) is just around 1% the size of the on-grid market.
The trend towards bigger projects in the utility scale ground-mounted market continued:
- The largest project connected to the grid in 2011 was the 100MW Perovo PV power plant in Ukraine, comprising 440,000 polycrystalline modules.
- In Abu Dhabi, feasibility studies and tenders for Masdar's 100MW Nour PV project, have been completed and construction is expected to start this year.
Europe remains the dominant market both in terms of cumulative and newly installed capacity (see table below). Some 20.9GW of new plant was installed in 2011 to bring the region's total grid connected capacity to 50GW.
Italy topped the European league table with 9GW newly installed, followed by Germany (7.5GW) and France (1.5GW).
A key factor in Italy's 2011 lead was the “Salva Acoa” decree. This allowed operators of PV projects installed at the end of 2010 but connected to the grid in 2011 to obtain the more favourable rates of the 2010 feed-in tariff (FIT). Around 3.5GW of projects benefited from the ruling.
For Germany it was a year of two halves. Stunned with severe cuts to the country's FIT, just 600MW was installed in the first six months. It came rallying back in the second half of the year, and notably so in the last quarter – some 2.98GW was connected in December alone, a new record for the country in terms of PV capacity connected in a single month.
France experienced a similar situation to Italy, with more than 90% of the 1.5GW connected to the French grid in 2011 actually corresponding to facilities installed in 2010. This was due to the lengthy grid connection process and a cut in the FIT during 2011. In France, FITs for large PV plants are declining, while smaller projects (up to 100kW) enjoy of a more favorable tariff. The government's aim is to limit the PV market's growth to no more than 500MW of new installed capacity a year.
It was also a year of major growth for the UK, which added 700MW to almost double its total installed PV capacity. Development was spurred on by companies wanting to benefit from favorable FIT rates (in place since April 2010) before they expired – a fast track review of the UK support mechanism took place in January 2011 leading to the FIT for projects bigger than 50kW being severely cut. The FIT rates were then reduced again in the last quarter of the year, prompting another rush to get projects online.
Outside Europe, new PV installations in China, the US and Japan were 2GW, 1.9GW and 1.1GW respectively. Compared to 2010, China's year total was up 500%, while the US total was double the capacity installed that year, with cumulative grid-connected PV capacity in the country reaching 3.95GW from more than 214,000 operating systems by end 2011.
Significantly, in the US, new records for quarterly installations connected to the grid were set twice, firstly with 300MW installed in the third quarter then 776MW connected in the last three months of the year. Moreover, all segments of the US market saw significant growth:
- Residential installations totaled 297MW (up 11% on 2010);
- Non-residential reached 800MW (up 127%);
- Utility installations were up 185% to 758 MW – this segment is due for significant growth with over 9GW of projects, with signed power purchase agreements, due for completion in the next five years.
Japan's market, meanwhile, was driven by the government's introduction of a more attractive FIT for renewables following its post-Fukushima energy review. Elsewhere in Asia, activity in one of the most promising emerging PV markets, India, was significantly up. New PV installations totalled 468MW compared to just 8.1MW in 2009 and 25.1MW in 2010.
Manufacturing market and technology trends
In terms of solar PV cell production, manufacturing output in 2011 totaled 29.5GW, with China and Taiwan accounting for 74% of that. Thin film manufacturer First Solar topped the company league table, but the rest of the top ten were all firms producing crystalline cells.
With manufacturing output higher than supply demands – compounded by the slow down of the market in Europe following FIT reviews – PV module prices dropped significantly in 2011. Market-weighted crystalline silicon factory-gate module prices dropped 28%.
A major problem for crystalline cell producers is that polysilicon is supplied under long-term contracts and thus the price is predetermined regardless of subsequent fluctuations in PV module prices. As a result, production costs did not go down in line with PV module prices during the year. These pricing issues, amongst other factors, led to some companies filing for bankruptcy:
On the upside, there were major developments in terms of cell efficiencies:
Meantime, the solar inverters market faced a slight reduction of 1% in demand compared with 2010. The total capacity shipped in 2011 was 23.4GW, with Germany's SMA Solar Technology accounting for 31% of the market. However, with selling prices in steep decline, the inverter sector also suffered a large drop of 15% on revenues.
The concentrating photovoltaic (CPV) sector took important steps forward in 2011, with larger projects finally being financed. These include the 30 MW Alamosa Solar Generating Project in Colorado being developed by Cogentrix and a 155MW plant, approved in November, being developed for San Diego Gas & Electric by Soitec.
Regarding smaller projects, the 5MW Hatch Solar Center in Nuevo Mexico was commissioned in October 2011.
Summary of the global solar PV power markets, region by region, end of 2011
| ||Cumulated installed capacity 2011 (GW) ||Newly installed capacity 2011 (GW) ||Estimated electricity generation 2011 (TWh/year) |
|Europe ||50.0 ||21.0 ||50.9 |
|North America ||5.0 ||2.2 ||8.9 |
|South America ||<0.1 ||<0.1 ||0.1 |
|Asia ||9.0 ||3.6 ||13.4 |
|Oceania ||1.3 ||0.7 ||2.9 |
|Africa ||0.2 ||<0.1 ||0.4 |
|World total ||65.6 |
|Largest National Market ||Germany 25.0 ||Italy 9.0 || Italy 18.7 |
Part five (out soon): Cost drivers fuel technology switch for concentrated solar.