In 2008, the Photovoltaic industry production almost doubled and reached a world-wide production volume of 7.3 GWp of Photovoltaic modules. Yearly growth rates over the last decade were in average more than 40%, which makes Photovoltaics one of the fastest growing industries at present. Business analysts predict the market volume to increase to € 40 billion in 2010 and expect lower prices
for consumers. The trend that thin-film Photovoltaics grew faster than the overall PV market continued in 2008.
The Eighth Edition of the “PV Status Report” tries to give an overview about the current activities regarding Research, Manufacturing and Market Implementation. I am aware that not every country and development is treated with the same attention, but this would go beyond the scope of this report.
Nevertheless, I hope that this report will provide a useful overview about the situation world-wide. Any additional information is highly welcome and will be used for the update of the report.
The opinion given in this report is based on the current information available to the author, and does not reflect the opinion of the European Commission.
Production data for the global cell production1 in 2008 vary between 6.9 GW and 8 GW. The significant uncertainty in the data for 2008 is due to an overheated market, as well as the fact that some companies report shipment figures, whereas others report production figures. In addition, the difficult economic conditions led to a decreased willingness to report confidential company data. Nevertheless, the figures show a significant growth of the production and an easing of the tight silicon supply situation. However, the delay of a number of silicon expansion projects might lead to a tight supply situation again, if markets recover faster than the silicon expansion takes place. Our own data, collected from various companies and colleagues was then compared to various data sources thus led to an estimate of 7.35 GW , representing a production growth of about 80% compared to 2007.
Again, both Chinese and Taiwanese production increased over-proportionally, keeping the PRC in the top rank with about 2.4 GW followed by Europe with 1.9 GW, Japan with 1.2 GW and Taiwan with 0.8 GW. In terms of production, Q-cells (DE) was N° 1 (570 MW), followed by Suntech (PRC) with 550 MW, First Solar (US/DE/Malaysia) 503 MW and Sharp (JP) 470 MW. However, in terms of shipments, the order was slightly revised, N° 1 Q-cells (DE) 570 MW, followed by Suntech (PRC) with 497 MW, Sharp (JP) 458 MW and First Solar (US/DE/Malaysia) with 435 MW.
This rapid increase of the production also led to a massive increase of inventory stocks. This can be observed if one looks at the development of the figures reported for shipments to first point of sale (5.5 GW) and the global PV Market estimates which range between 5.5 GW and 6 GW.
Since 2003, total PV production increased almost 10 fold with annual growth rates between 40% and 80%, whereas the thin film segment – starting from a very low level – grew in average by over 90%. In 2008 shipments to point of first sale increased to 750 MW or 14%. The high growth rate of thin film production and the increase of the total production share indicate that the thin film technology is gaining more and more acceptance in the markets. Equally competitive technologies are amorphous/micromorph Silicon, CdTe and Cu(In,Ga)(S,Se)2 thin films. In addition, more and more PV manufacturers are diversifying their production portfolio and add thin film production to the wafer based one. It should be noted that the current thin film market leader First Solar will reach an annual production capacity of more than 1 GW by the end of 2009. Sharp (Japan), Showa Shell Sekiyu (Japan) and Best Solar (PRC) had announced they would increase their thin film production to at least 1 GW capacity to be operational in 2010 and 2011 respectively, but in the meantime their expansion speed has slowed down. Despite this development, a thin film market share of 20 to 25% in 2010 seems not to be unrealistic as a number of other thin film manufacturers are aiming at 500 MW production capacities in that time frame. power
Public traded companies manufacturing solar products, or offering related services, have attracted a growing number of private and institutional investors. In 2008 worldwide new investments into the renewable energy and energy efficiency sectors increased to a record US $ 155 billion (€2 110 billion), up 5% from 2007, but the second half of the year saw a significant slowdown due to the unfolding of the financial crisis (Quarter to quarter difference: -10% Q3, -23% Q4). This trend continued in the first quarter of 2009 (-47% compared to Q4 2008), but then started to reverse in the 2nd quarter (+83% compared to Q1 2009).
New investments in solar power grew again surpassing bioenergy and second only to wind power with US $ 33.5 billion (€ 23.9 billion) or 21.6% of new capital in 2008.
Solar power continued to be the fastest growing sector for new investments: acquisition transactions US $ 11 billion (€ 7.86 billion), venture capital (VC) and private equity (PE) US $ 5.5 billion (€ 3.93 billion), public market investments US $ 6.4 billion (€ 4.57 billion).
The number of consulting companies and financial institutions offering market studies and investment opportunities has considerably increased in the last few years and business analysts are very confident that despite raising interest rates, the Photovoltaics sector is in a healthy long term condition. Following the stock market decline, as a result of the financial turmoil, the PPVX3 (Photon Pholtovoltaic stock index) declined to 2,095 points at the end of 2008. Between January and 7 August 2009 the index has increased by
12.9% to 2,552 points and the market capitalisation of the 30-PPVX companies was € 32.6 billion. It is expected that the arrival of the “green stimulus” money from governments aimed to help relieve the effect of the recession will further stimulate the PV markets. Since September 2008, the major economies have announced about US $ 185 billion (€ 132 billion) of recovery funds aimed at renewable energies or energy efficiency measures. However, analysts predict that only about 15% or less will be spent in 2009, whereas two thirds of these funds will be spent in 2010 and 2011.
Market predictions for the 2010 PV market vary between 6.8 GW (Navigant conservative scenario), 7 to 10 GW (EPIA policy driven scenario, EuPD, Bank Sarasin, LBBW) and 17 GW (Photon Consulting). Massive capacity increases are underway or announced and if all of them are realised, the worldwide production capacity for solar cells would exceed 38 GW at the end of in 2010. This indicates that even with the most optimistic market growth expectations, the planned capacity increases are way above the market growth. The
consequence would be a quite low utilisation rate and consequently an accelerated shift from the demand-driven markets of the last years to an oversupplied market which will increase the pressure on the margins. Such a development will accelerate the consolidation of the Photovoltaics industry and spur more mergers and acquisitions.
The current solar cell technologies are well established and provide a reliable product, with sufficient efficiency and energy output for at least 25 years of lifetime. This reliability, the increasing potential of electricity interruption from grid overloads, as well as the rise of electricity prices from conventional energy sources, add to the attractiveness of Photovoltaic systems.
About 85% of the current production uses wafer-based crystalline silicon technology. Up to now the main advantage of this technology was that complete production lines could be bought, installed and be up and producing within a relatively short time-frame. This predictable production start-up scenario constitutes a low-risk placement with calculable return on investments. However, the last shortage in silicon feedstock and the market entry of companies offering turnkey production lines for thin film solar cells led to a massive expansion of investments into thin film capacities. More than 150 companies are involved in the thin film solar cell production process ranging from R&D activities to major manufacturing plants.
The past shortage in silicon feedstock, the relative slow response of the established silicon producers and the accelerated expansion of production capacities led to the market entry of new potential silicon producers.
The following developments can be observed at the moment:
¡ Silicon producers are in the process of increasing their production capacities, which will ease the pressure on the supply side within the next years. However, a number of expansion projects have been delayed due to the financial constraints and current market situation.
¡ New silicon producers are entering the market, and in the process of finalising their business plans or are already constructing new production facilities. However, due to the current restricted financial opportunities a number of projects are on hold or cancelled.
¡ PV companies accelerate the move to thinner silicon wafers and higher efficient solar cells in order to save on the silicon demand per Wp.
¡ Significant expansions of thin film production capacities of existing manufacturers are under way and a large number of new manufacturers try to enter the market to supply the growing demand for PV modules. Despite the scale back of expansion plans by some companies, the number of new entrants and their planned capacities are still increasing the overall announced capacity.
If all announced thin film production capacities are realised, more than 11 GW production capacities could be reached by 2010. This is an increase of about 10% compared to the announcements made in the autumn of last year.
Projected silicon production capacities available for solar in 2010 vary between 99,500 metric tons and 245,000 metric tons. The possible solar cell production will in addition depend on the material use per Wp. Material consumption could decrease from the current 10 g/Wp down to 8 g/Wp, but this might not be achieved by all manufacturers.
Similar to other technology areas, new products will enter the market, enabling further cost reduction. Concentrating Photovoltaics (CPV) is an emerging market with approximately 17 MW cumulative installed capacity at the end of 2008.
In addition, Dye-cells are getting ready to enter the market as well. The growth of these technologies is accelerated by the positive development of the PV market as a whole.
It is interesting to note that not only new players are entering into thin film production, but also established silicon-based PV cell manufacturers diversify into thin film PV. It can be concluded that in order to maintain the extremely high growth rate of the Photovoltaic industry, different pathways have to be pursued at the same time:
¡ Drastic increase of solar grade silicon production capacities;
¡ Accelerated reduction of material consumption per silicon solar cell and Wp, e.g. higher efficiencies, thinner wafers, less wafering losses, etc.;
¡ Accelerated introduction of thin film solar cell technologies and CPV into the market as well as capacity growth rates above the normal trend.
Further cost reduction will depend not only on the scale-up benefits, but also on the cost of the encapsulation system, if module efficiency remains limited to below 15%, stimulating strong demand for very low area-proportional costs.
The World Market
The Photovoltaic world market grew in terms of production by more than 80% in 2008 to approximately 7.35 GW. The market for installed systems about doubled and the current estimates are between 5.6 and 6 GW, as reported by various consultancies. One could guess that this represents mostly the grid connected Photovoltaic market. To what extent the off-grid and consumer product markets are included is unclear. The difference of roughly 1.3 to 1.75 GW could therefore be explained as a combination of unaccounted off-grid installations (approx. 100 MW off-grid rural, approx. 100 MW communication/signals, approx. 80 MW off-grid commercial), consumer products (ca. 100 MW) and cells/modules in stock.
The impressive growth in 2008 is mainly due to the exceptional development in the Spanish market, which almost increased five-fold from 560 MW in 2007 to 2.5 – 2.7 GW in 2008 [Epi 2009, Sys 2009]. The second largest and most stable market was Germany with 1.5 GW followed by the US (342 MW), South Korea (282 MW), Italy (258 MW) and Japan (230 MW). The Photovoltaic Energy Barometer reported that Europe had a cumulative installed PV system capacity of 9.5 GW in 2008.
Despite the fact that the European PV production grew again by over 80% and reached 1.9 GW, the exceptional market situation in Spain, the size of the German and the rapidly developing Italian market, the promising developments in Belgium, the Czech Republic (51 MW), France (46 MW) and Portugal (50 MW) did not change the role of Europe as a net importer of solar cells and/or modules. The ongoing capacity expansions and the cap in the Spanish market might change this in the future.
The third largest market was the USA with 342 MW of PV installations, 292 MW grid-connected. California, New Jersey and Colorado account for more than 75% of the US grid-connected PV market. After more than a year of political debate the US Senate finally voted to extend the tax credits for solar and other renewable energies on 23 September 2008. On 3 October 2008, following weeks of contentious negotiations between the House and Senate, Congress approved and the President signed into law the “Energy Improvement and Extension Act of 2008” as part of H.R. 1424, the “Emergency Economic Stabilization Act of 2008”.
On 27 May 2009, President Obama announced to spend over $ 467 million from the American Reinvestment and Recovery Act to expand and accelerate the development, deployment, and use of geothermal and solar energy throughout the United States. The Department of Energy (DOE) will provide $ 117.6 million in Recovery Act funding to accelerate the widespread commercialisation of solar energy technologies across America. $ 51.5 million will go directly for Photovoltaic Technology Development and $ 40.5 million will be spent on Solar Energy Deployment, where projects will focus on non-technical barriers to solar energy deployment.
There is no single market for PV in the United States, but a conglomeration of regional markets and special applications for which PV offers the most cost-effective solution. In 2005 the cumulative installed capacity of grid-connected PV systems surpassed that of off-grid systems. Since 2002 the gridconnected market has been growing much faster, thanks to a wide range of “buy-down” programmes, sponsored either by States or utilities.
South Korea became the fourth largest PV market in 2008. At the end of 2006 the cumulative installed capacity of Photovoltaic electricity systems was only in the range of 25 MW. In 2007 about 45 MW were installed and in 2008 the market surpassed the estimated 75 to 80 MW by far, with 282 MW of new installations. The driver for this development is the Government’s goal to increase the share of New and Renewable Energy Sources (NRES) to 5% by 2011. For Photovoltaics, a goal of 1.3 GW cumulative installed Photovoltaic electricity generation capacity by 2012 and 4 GW by 2020 was set. In January 2009, the Korean Government has announced the third National Renewable Energy Plan, under which renewable energy sources will steadily increase their share of the energy mix between now and 2030. The plan covers such areas as investment, infrastructure, technology development and programmes to promote renewable energy. The new plan calls for a Renewable Energies share of 4.3% in 2015, 6.1% in 2020 and 11% in 2030. To reach this target, South Korea had introduced an attractive feed-in tariff for 15 years along with investment grants up to 60%. From October 2008 to 2011 the following feed-in tariffs are valid. From 2012 on it is planned to substitute the tariffs by a Renewable Portfolio Standard. In the new tariff scheme it is possible to choose between 15 years guarantee and a higher kWh price and a 20 years guarantee and a somewhat lower kWh price. The previous 100 MW cap was increased to 500 MW and if it is not reached in 2009 the fixed prices applicable for new systems in 2010 will be announced later. However, the cumulative installed capacity at the end of 2007 was 78 MW. In January 2008, 46 MW of installed capacity was under the cap scheme and more than 560 MW were already under planning or construction. The Korean Government aims to equip 100,000 houses and 70,000 public/commercial buildings with PV systems by 2012. An interesting aspect is that some of the larger projects will qualify for Clean Development Mechanism (CDM) credits, allowing for trading of Certified Emission Reductions (CER) under the Kyoto Protocol.
After two years of decline, the Japanese market rebounded slightly and reached 230 MW of new installations, 9% higher than in 2007, but still 21% lower than in 2006 and 2007. To change this situation, the Japanese Ministry for Economy, Trade and Industry (METI) proposed a new investment incentive scheme which was introduced by the Japanese Government, starting in January 2009. The allocated budget for the last months of FY2008 (January – March 2009) and FY2009 would allow the installation of more than 100,000 systems or 400 MW.
METI started to review the Renewable Portfolio Standard (RPS) Law in order to prepare the introduction of a new PV power purchase programme, which should allow the purchase of “excess” electricity from PV systems at a higher rate and it is planned to introduce this measure for FY2010. The “Japanese Recovery Plan” with its three pillars 1) Lowcarbon revolution, 2) Healthy long life and 3) Exert Attractiveness includes the specific project “Plan to become the world’s leading PV & energy-saving nation” and calls for a drastic acceleration of the introduction of PV power generation. The goal is an approximately twenty-fold increase of the cumulative installed PV capacity by 2020.
In addition to the National Government, Local Government and Utilities have announced plans as well. The Tokyo Metropolitan Government implemented a plan to install 1 GW within the next 10 years and gives an investment support for the installation of residential PV systems in FY 2009 and FY2010. Other prefectures and cities have also announced implementation plans and are offering additional investment incentives as well.
At the end of 2008, total cumulative installed capacity in 2008 stands at 2.15 GW, less than half of the original 4.8 GW goal for 2010. Despite a production increase of 31% in 2008 compared to 2007, the world market share of Photovoltaic devices manufactured in Japan further decreased from 23% to 17%. The number of Japanese companies amongst the Top Ten was three, equal to those from PR China.
The rapid expansion of solar cell manufacturing capacities and production volume in the People’s Republic of China and Taiwan is not yet reflected in a significant size of the respective home markets. Despite the fact that the Chinese PV market more than doubled in 2008 to 45 MW, the home market is still less then 2% of total Photovoltaic production. This situation might change because China’s RMB 4 trillion stimulus package, which was announced in early March 2009, includes RMB 210 billion (€ 22 billion6) for green energy programmes.
On 23 March 2009 the Chinese Ministry of Finance and Ministry of Housing and Urban-Rural Development announced a solar subsidy programme which immediately went into effect. For 2009 the subsidy will be 20 RMB/Wp (2.10 €/Wp) installed. The document neither mentions a cap on individual installations nor a cap for the total market.
It was suggested that 70% of the incentives budget would be transferred to the Provincial Finance Ministries. Analysts believe that these measures will accelerate the Chinese domestic market. For 2009 a doubling, or even tripling of the market seems possible as a starting point for the development of a GW size market from 2012 on. China is now aiming for 2 GW solar capacity in 2011 and in July 2009 under the new energy stimulus plan China revised its 2020 targets for installed solar capacity to 20 GW. In addition, the National Energy Administration (NEA) has set a subsidised price for solar power at 1.09 RMB/kWh (0.115 €/kWh).
To promote the solar energy industry the Taiwanese Government decided to subsidise manufacturers engaging in R&D and will offer incentives to consumers that use solar energy. About a dozen manufacturers expressed the intention to invest in fabricating thin films for solar cells and eight of them will set up their own plants to process the products. Moreover, the Industrial Technology Research Institute (ITRI), a Government-backed research organisation, is going to import advanced foreign technology for local manufacturers.
On 12 June 2009, the Legislative Yuan passed the “Renewable Energy Development Statute”, which aims to increase the total renewable electricity capacity by 6.5 GW over the next 20 years. It is expected that 1.2 GW of these new renewable capacities would come from PV.
On 1 July 2008, Prime Minister Manmohan Singh unveiled India’s first National Action Plan on Climate Change. To cope with the challenges of Climate Change India identified eight National Missions aimed to develop and use new technologies. The use of solar energy with Photovoltaics and Concentrating Solar Power (CSP) is described in the National Solar Mission (NSM). The actions for Photovoltaics in the National Solar Mission call for R&D collaboration, technology transfer and capacity building. In April 2009, the Union Government finalised the draft for the National Solar Mission. It aims to make India a global leader in solar energy and envisages
an installed solar generation capacity of 20 GW by 2020, 100 GW by 2030 and 200 GW by 2050.
In April 2009, SEMI’s PV group published a White Paper where they identified the need for focused, collaborative and goal-driven R&D for Photovoltaics in India as one of the key challenges for the growth and development of PV in industry. This is a clear signal that the current support activities for the increase of production capacities and deployment are seen as insufficient to utilise the solar potential of the country. The materials and semiconductor research base in India is excellent and with proper public and private funded R&D Programmes in place, India’s academia and industry could accelerate the development and growth of the industry substantially.
At the end of 2008, most of Photovoltaic applications in India were off-grid, mainly solar lanterns, solar home systems, solar street lights and water pumping systems. Gridconnected were 33 solar Photovoltaic systems with a total capacity of approximately 2 MWp. For its eleventh Five Year Plan (2008 – 2012) India has set a target to install 50 MW grid-connected Photovoltaic systems supported by the Ministry of New and Renewable Energy with an investment subsidy and power purchase programme. Contrary to these moderate installation plans, Indian PV companies expect the PV market in India to grow to 1 – 2 GW by 2010.
Another noteworthy development is the fact that the market share of the ten largest PV manufacturers together further decreased from 80% in 2004 to 50% in 2008. This development is explained by the fact that an increasing number of solar cell manufacturers are entering the market. The most rapid expansion of production capacities can be observed at the moment in China and Taiwan, but other countries like India, Malaysia and South Korea are following the example to attract investment in the solar sector.
The announced increases of production capacities – based on a survey of more than 200 companies worldwide – again accelerated in 2008 and the first half of 2009. Only published announcements of the respective companies and no third source info were used. The cut-off date of the info used was July 2009.
This method has of course the setback that
a) not all companies announce their capacity increases in advance, and
b) that in times of financial tightening, the announcements of expansion plan scale-back are often delayed in order not to upset financial markets.
Therefore, the capacity figures just give a trend, but do not represent final numbers. It is worthwhile to mention that despite the fact that a significant number of players have announced a slow down of their expansion, or cancelled their expansion plans for the time being, the number of new entrants into the field, notably large semiconductor or energy related companies, are overcompensating this and, at least on paper, are increasing the expected production capacities. In addition, the assessment of all the capacity increases is rather difficult, as it is affected by the following uncertainties.
The announcements of the increase in production capacity in Europe, the US or China, often lack the information about completion date compared to Japan. Because of the Japanese mentality, where it is felt that a public announcement reflects a commitment, the moral pressure to meet a given time target is higher in Japan than elsewhere, where delays are more acceptable. Not all companies announce their capacity increases in advance.
In addition, it is of high importance to note that production capacities are often announced, taking into account different operation models, such as number of shifts, operating hours per year, etc. Announcements of the increase in production capacity do not always specify when the capacity will be fully ramped up and operational and frequently refer to the installation of the equipment only. It does not mean that the production line is really fully operational. This means, especially with new technologies, that there can be some time delay between installation of the production line and real sales of solar cells. In addition, the production capacities are not equal to sales and therefore, there is always a noticeable difference between the two figures, which cannot be avoided.
If all these ambitious plans can be realised by 2012, China will have about 32% of the worldwide production capacity of 54 GW, followed by Europe (20%), Taiwan (15%) and Japan (12%). However, it is expected that the capacity utilisation rate will further decrease from 56% in 2007 and 54% in 2008 to less than 50% in 2012.
In 2005 production of Thin-Film solar modules reached for the first time more than 100 MW per annum. Since then the Compound Annual Growth Rate (CAGR) of thin-film solar module production was even beyond that of the overall industry increasing the market share of thin-film products from 6% in 2005 to 10% in 2007 and 12 – 14 % in 2008. Thin-film shipments in 2008 increased by 129% compared to 2007 and the utilisation rate of thin-film capacities is 60% and somewhat higher than the overall utilisation rate of the photovoltaic industry, with 54%.
More than 150 companies are involved in the thin-tilm solar cell production process, ranging from R&D activities to major manufacturing plants. The first 100 MW thin-film factories became operational in 2007 and the announcements of new production capacities accelerated again in 2008. If all expansion plans are realised in time, thin-film production capacity could be 11.9 GW (vs 4.5 GW reported 2007 at the 22nd EUPVSEC in Milan) or 30% of the total 39 GW in 2010 and 20.4 GW in 2012 of a total of 54.3 GW. The first thin-film factories with GW production capacity are already under construction for various thin-fFilm technologies.
However, one should bear in mind that out of the ca. 150 companies, which have announced their intention to increase their production capacity or start up production in the field of thin films, only one fourth have actually already produced thin film modules on a commercial scale.
For 2010 about 12 GW of thin film production capacities are announced, which is almost a doubling of the 2009 figures. Considering that the 2009 end-of-year capacity could eventually be ready for production, First Solar and Sharp together could contribute with about 2 GW, whereas the other existing producers would add about the same capacity. For that reason, 4 GW production in 2010 are considered as possible, if market conditions allow. For the remaining 2 GW there is a high uncertainty as to whether or not it can be realised in the time-frame given.
Despite the fact that only limited comparisons between the different world regions are possible, the planned cell production capacities portray some very interesting developments.
First, the technology, as well as the company distribution, varies significantly from region to region. 48 companies are located in Europe, 41 in China, 25 in the US, 17 in Taiwan, 9 in Japan and 16 elsewhere. The majority of 117 companies is silicon based. The reason is probably that in the meantime there is a number of companies offering complete production lines for amorphous and/or micromorph silicon. 30 companies will use Cu(In,Ga)(Se,S)2 as absorber material for their thin-film solar modules, whereas 11 companies will use CdTe and 8 companies go for dye and other materials.
Concentrating Photovoltaics (CPV) is an emerging market with approximately 17 MW cumulative installed capacity at the end of 2008. There are two main tracks – either high concentration > 300 suns (HCPV) or low to medium concentration with a concentration factor of 2 to approx. 300. In order to maximise the benefits of CPV, the technology requires high Direct Normal Irradiation (DNI) and these areas have a limited geographical range – the “Sun Belt” of the Earth.
The market share of CPV is still small, but an increasing number of companies are focusing on CPV. In 2008 about 10 MW of CPV were produced and market predictions for 2009 and 2010 are 30 MW and 100 MW respectively. In the case of a continuing silicon feedstock expansion to 120,000 metric tons available for the solar industry and a material consumption decrease to 8 g/Wp, about 20 GW of solar cells could theoretically then be produced annually (15 GW silicon based and 6 GW thin films). This would be twice as much as the current optimistic market predictions forecast. Another important factor is the actual utilisation rate of the production capacities. For 2007 and 2008, the overall capacity utilisation rates of the solar cell industry with respect to shipments were given as 56% and 54% respectively by Navigant Consulting. This is different from the utilisation rate with respect to production, as shipments were given with 3,061 MW and 5,492 MW by Navigant.
Second, more than 15 companies are aiming at total production capacity in the order of 1GW or more within the next five to six years. The number of those aiming at 500 MW or more in the same time-frame is above 20.
This leads to a third observation. If the large increase in production capacity is realised in China, the share on the world market would increase from 11.9% in 2005 to about 32% in 2012. This production capacity would be much more than the 2 GW of cumulative installed solar systems in the People’s Republic of China by 2011, as announced in July 2009.
Despite the positive market development signs in China, the solar cell manufacturers in China will continue with a high export rate (98% in 2007) of their production to the growing markets in Europe, the US and developing countries. In response to the Intergovernmental Panel on Climate Change’s (IPCC) Fourth Assessment Report “Climate Change 2007”, the European Council endorsed during its Council Meeting in Brussels on 8-9 March 2007 a binding target of a 20% share of renewable energies in the overall EU energy consumption by 2020 and a 10% binding minimum target to be achieved by all Member States for the share of Biofuels in overall EU transport petrol and diesel consumption. This target became law, when the Directive 2009/28/EC on the promotion of the use of energy from renewable energy sources was officially published on 5 June 2009.
During the 23rd European Photovoltaic Solar Energy Conference and Exhibition from 1 to 5 September 2008, Anton Milner, Director of EPIA, presented the new vision of the European Photovoltaic Industry Association to produce 6 to 12% of European electricity with Photovoltaic systems in 2020. This would correspond to 210 to 420 TWh of electricity or 175 to 350 GWp installed capacity of Photovoltaic electricity systems.
To realise this new vision, around 165 GW to 340 GW of new capacity have to be installed between 2009 and 2020. Installations Installations of new Photovoltaic systems would have to increase from around 4.5 GW per annum in 2008 to 40 – 90 GW per annum in 2020. This corresponds to a CAGR (Compound Annual Growth Rate) of 26% to 33% over the next 12 years.
This would be a dramatic change from the development of the last years. Since the introduction of the German Feed-in Law in 1999, more than 80% of European PV systems were installed in Germany. The Spanish PV market grew from 14.5 MW in 2005, to about 2.7 GW in 2008. However, the prospects for 2009 are not as bright as the Spanish Government introduced a cap of 500 MW on the yearly installations, which is well below the 2008 installation figure.
Since 1999, European PV production has grown on average by 50% per annum and reached almost 2 GW in 2008. The European market share rose during the same time from 20% to 25%, whereas the Chinese from 0% to more than 30%. On the contrary, the US share decreased due to a weak home market. By 2005 the Japanese market share had increased and stabilised at around 50 ± 3%, but decreased sharply to 37% in 2006, 24% in 2007 and 16% in 2008.
The European PV industry has to continue its high growth over the next years in order to maintain that level and to contribute to the new EPIA vision. This will, however, only be possible if reliable and long-term political frame conditions – not to be changed each year – are in place in Europe to enable a return on investment for the PV industry and the final consumer.
One of the crucial issues is an agreement on an easy and priority access of renewable electricity to the grid all over monetary support mechanisms like feed-in tariffs, tax incentives or direct investment subsidies, should then be designed in a way that they enable the necessary capital investment and take into account the cost and market developments.
Besides this political issue, a continuous improvement of the solar cell and system technology is required. This leads to the search for new developments with respect to material use and consumption, device design, reliability and production technologies, as well as new concepts to increase overall efficiency.
Such developments are of particular interest in view of the strategic importance of solar cell production as a key technology in the 21st century, as well as for the electrification of developing countries and the fulfilment of Kyoto Targets.