Solar PV growth has been spearheaded in recent years by markets such as Germany, Japan, Spain, and the United States. Remaining countries in the European Union are starting to pick up strong momentum as well. Emerging markets in India and China show significant promise in the longer term. Of all the opportunities in PV, Pike Research finds that the most compelling growth potential lies in decentralized electricity generation, whether in small rooftop or large commercial installations.
PV has the advantage of being truly modular, as it can reach cost efficiencies with installations that are just a few kilowatts to 20 MW or even 200 MW. For purposes of our study, distributed PV is considered to be those systems less than 20 MW in size, where electricity does not pass through the traditional transmission and distribution system prior to being used.
The estimated size of the distributed PV market in 2008 was 3.6 GW, and we forecast that it will grow to 9.7 GW by 2013, representing a compound annual growth rate of 22%. This translates into a $30 billion market in 2008, growing to nearly $60 billion by 2013.
This Pike Research report analyzes the market for distributed solar PV in the context of the broader RDEG market, which also includes small wind energy generation and fuel cell technologies. The study covers key business issues and drivers of demand for sub-utility scale solar power, including government-driven legislation and incentives as well as market-based factors.
Technology and cost issues are examined in depth, as are a number of key industry players. Market forecasts include distributed solar energy generation capacity, system revenues, and installed prices through 2013 for installations in all regions of the world, with line-item segmentation for 12 key countries.
Key questions addressed:
* Why is distributed solar energy generation an important part of meeting the world’s growing electricity demands?
* How does sub-utility scale solar PV compare to other RDEG technologies such as small wind and fuel cells?
* How large is this market segment today and how large is it forecast to grow by 2013?
* What are the key applications for RDEG technologies in general and distributed solar in particular?
* What are the key drivers of growth?
* Who are the key industry players?
U.S. Solar Energy Demand Dynamics
The United States has become one of the more aggressive nations in promoting alternative energy technologies, but at the federal level tax credits and depreciation incentives are not currently enough to encourage sustainable demand growth. Instead, some states and municipalities have taken the lead in providing incentives through a variety of mechanisms ranging from upfront rebates and property tax credits to renewable energy credits and even European-style feed-in tariffs. Pike Research’s extensive interviews with both end-users and manufacturers conclude that for sustained growth in the U.S., incentives must be increased at the federal level. Due largely to the credit crisis, funding for solar projects has been tight. In the U.S., this has particularly been the case, because banks are unwilling to lend to projects that have undetermined cash flows.
Our five-year outlook is that the combination of federal and state incentives and falling module prices will work together to dramatically increase demand in the U.S. As more banks become comfortable with funding these projects, and find ways to securitize the cash flows, we believe it will become an attractive revenue stream for solar lending divisions. Utilities, which are just now getting serious about meeting RPS goals, will likely take the lead in developing new solar projects. Until now, they have been unsuccessful in getting support from their ratepayers who would see up to a 10% increase in their utility bills. However, we believe that the emphasis that the Obama administration is placing on climate change will eventually filter into the fabric of American society, propelling the U.S. into a global leadership position in solar PV market share by 2014, according to our most recent forecast.
This Pike Research report examines demand-side dynamics for solar PV projects in depth, analyzing government incentives, financing structures, and internal rates of return on a state-by-state level. Cost components for solar project development are quantified in detail, and the report also includes forecasts for leading solar PV markets around the world in addition to the U.S., providing a clear and actionable view of the size and timing of market opportunities.
Key questions addressed:
* Which states provide the best subsidies to supplement federal tax credits?
* How has the global credit crisis impacted solar demand, and what is the current financing environment?
* What are recent trends in pricing for fully installed solar PV systems?
* Why do lower installed costs have little impact without easing of credit?
* What are the key government subsidy mechanisms for encouraging solar demand?
* How will profitability be distributed within the solar value chain?
Energy Storage Technology Markets
Advanced Battery Technologies, Pumped Hydro, Compressed Air, Flow Batteries, and Frequency Regulation for Utility-Scale Storage Applications
The stationary utility energy storage market is very much in its nascent stages. Most industry participants believe that energy storage technologies have a large role to play in the electricity grid of the future. The demand is being driven by several key trends, including the proliferation of intermittent renewable energy sources such as wind and solar, the onset of the smart grid concept, and a shift to plug-in hybrid and electric vehicles, to name just three. Because energy storage technology providers are selling into the slow-moving regulated utility market, the adoption process will be longer than one might predict, given the apparent growing market need. However, over the coming years, energy storage is likely to enjoy significant adoption by utilities in North America and other global markets.
The U.S. Department of Energy estimates that, for every gigawatt of wind capacity added, 17 megawatts of spinning reserves must also be built to account for the system’s variability. Also, utilities are building capacity to meet so-called needle peaks in electricity usage that only occur for a small number of hours each year. It is expensive and inefficient to size capacity to these peaks, and energy storage can play a large role in supplanting peaking generation. However, unlike solar and wind, energy storage technologies have historically received very little support in the form of government subsidies and incentives. This tide is starting to turn, and new commitments from the U.S. government, combined with greater interest from forward-looking utilities, are pointing the way to a strong market opportunity for energy storage.
This Pike Research report analyzes the global energy storage market opportunity from several key perspectives. It includes a detailed examination of the strengths, weaknesses, technological capabilities, and economics of various energy storage technologies, including an assessment of the market prospects for each. The report also analyzes the market drivers, barriers, and regulatory/legislative issues associated with energy storage markets. In addition, it includes granular market forecasts, segmented by technology and world region, along with profiles of key market participants.
Key questions addressed:
* What is the current size of the Energy Storage technology market by technology and region of the world?
* What are the key drivers and inhibitors of growth for Energy Storage technologies?
* Which Energy Storage technologies are likely to gain the largest market share in the future and why?
* What are the costs of Energy Storage technologies today, and what are the future pricing trends?
* What are the key applications for Energy Storage technologies?
* Who are the key industry players in the Energy Storage technology market?
Wind Turbine Opportunities and Outlook
Technology Innovations, Regulatory Structures, Key Market Players, and Global Growth Drivers
New wind power generation capacity additions grew from 13% of all electricity additions in 2007 to 40% in 2008, reaching 121 GW by the end of 2008, up from 94 GW the year before (29% growth). The global market for wind turbines will continue to grow through 2015 driven by new generation additions as well as replacements of smaller, older turbines with new, larger, more efficient turbines.
Drivers of growth include rising demand for electricity, pro-wind regulatory environments, advantages over other renewables, and technological innovations driving down lifetime costs of producing wind power. Still, the growth of wind power will be inhibited by persistent economic disadvantages to traditional fuels and transmission line constraints. Taking these factors into account, Pike Research expects wind turbine sales to reach $43 billion by 2015.
This Pike Research report analyzes the opportunities and challenges facing wind power – particularly turbine manufacturers – in the current economic and political climate. The report provides a deep examination of the key market factors in the wind industry, including technology issues, regulatory frameworks, access to capital and financing structures, supply chain issues, and the wind turbine competitive landscape. Key players in the wind energy business are profiled and the report also includes rich quantitative analysis including market sizing, segmentation, market share analysis of top turbine vendors, and global growth forecasts by country through 2015.
Key questions addressed:
* What will be the global installed wind generation capacity by 2015?
* How many turbines will be required to meet wind generation capacity goals, including replacing aging fleets?
* What are the key industry growth drivers and challenges inhibiting growth of wind power?
* What are the economics of turbine manufacturing, installation, operations, and maintenance?
* What technological advances may drive down the lifetime costs of wind power production?
* What market shares do the top turbine manufacturers have of installed wind generate on capacity?
Renewable Distributed Energy Generation
Sub-Utility Scale Photovoltaics, Small Wind Power, and Fuel Cells: Market Analysis and Forecasts
Increasing numbers of countries and regions of the world have committed to reduce greenhouse gas emissions and diversity energy resources to include more renewable sources. Meanwhile, the world’s electricity generation is expected to increase nearly two-fold by 2030 from 2007 levels. The traditional electricity grid’s centralized power generation model is very inefficient and limited. In most industrialized countries, the overall generation efficiency averages 30-35% by the time electricity reaches the customer and the electricity grid is getting more and more congested. Further, it is estimated that 33% of the global population lives without power today.
One of the key solutions to these challenges lies in Renewable Distributed Energy Generation. RDEG technologies are comprised of three principal technologies: photovoltaic, small wind, and fuell cells, and are often used in concert with emerging energy storage technologies. RDEG technologies generate power at the point of consumption, avoiding costly and inefficient transmission and distribution. RDEG technologies generate electricity with few if any emissions.
This Pike Research report provides an overview of the opportunities and challenges associated with deploying RDEG technologies on a global basis to meet the growing electricity needs of the planet. The report provides a comprehensive overview of the technologies as well as key drivers of growth over the next five years and beyond. The report takes an in-depth analysis of the key cost drivers of each RDEG technology. Detailed market forecasts of capacity, price, and installed system revenue potential are provided for each technology covering each significant global market. Key players in each category are also profiled.
Key questions addressed:
* Why is sub-utility scale Renewable Distributed Energy Generation (RDEG) an important part of the solution to the challenges of climate change?
* What are the key sub-utility scale RDEG technologies and how do they compare across a number of dimensions?
* How big is the RDEG category today and how large is the market forecast to grow?
* What are the key applications of RDEG technologies?
* What are the key drivers of growth for RDEG technologies?
* Who are the key industry players in the RDEG technology market?