Solar power photovoltaic on the brink of economic breakthrough

The growing appetite for energy in the entire world, the implications of climate change, the increasing damages to our environment and the scarcity of fossil fuels have created the appropriate conditions for renewable energies development. For decades we have known that just a small percentage of the sun’s energy reaching the earth’s surface on a daily basis could power the entire mankind several times over. The time has come for solar photovoltaic (PV) electricity to be a part of the global solution to fight climate change and to help us shift to a carbon free economy. It is also, in addition, a prosperous industry sector in its own right.

Global investments in solar photovoltaic technology could double from €35-40 billion today to over €70 billion in 2015, according to a study published on 2 February 2011 by the European Photovoltaic Industry Association (EPIA) and Greenpeace International. The estimated investments in the European Union alone would rise from today’s €25-30 billion to over € 35 billion in 2015.

This report on the global market outlook for solarenergy  photovoltaic, named “Solar Generation 6” foresees that PV could account for 12% of the European power demand by 2020, and up to 9% of the global power demand by 2030.

Solar photovoltaic is a key technology for combating climate change; the study shows that it creates 35 to 50 jobs per tonne of CO2 savings and will increase the security of energy supply by reducing dependency on energy imports to Europe.

Furthermore, solar photovoltaic technology has, for many years now, shown increased power efficiencies and cost reductions. Today’s cost predictions, driven also by economies of scale in light of global photovoltaic capacity, totalling almost 40 GW in 2010, show that the technology is on the brink of an economic breakthrough. PV prices have dropped some 40% since 2005 and by 2015 the cost of PV systems is expected to drop by an additional 40% compared to current levels. As a result, PV systems will be able to compete with electricity prices for households in many countries of the European Union within the next five years.

The report estimates that current global solar PV capacity could grow from over 36 GW at the end of 2010 to close to 180 GW by 2015. European PV capacity is expected to increase from over 28 GW in 2010 to nearly 100 GW by 2015, and has the potential to reach up to 350 GW on a global basis by 2020. This would save as much as 1.4 billion tonnes of CO2 emissions globally and 220 million tonnes of CO2 within the EU every year.

In addition to its environmental benefits, the report shows solar energy to be a sustainable way to address concerns about energy security and volatile fossil fuel prices, as well as a substantial factor in economic development. The European PV industry, which already employs over 300,000 people, could provide jobs to over 600.000 by 2015, and has the potential to further increase to 1.6 million in 2020 if general policy support remains effective.

The “Solar Generation 6” report also highlights the enormous PV potential for Europe in the light of the Union’s established 20% renewable energy and the 20% energy efficiency target. Based on this potential for photovoltaic growth, the EU could easily increase its emission reduction target from the current 20% by 2020 to a more aggressive 30% level.

During 2010, the photovoltaic (PV) market has shown unprecedented growth and wide deployment of this environmentally friendly source of power generation. On a global scale, approximately 15,000 MW of new PV installations have been added during 2010, amounting the entire PV capacity to almost 40,000 MW. This number has risen above the optimistic forecast contained in the report, and it also translates into investments of over 50 bn€ in 2010, again ahead of the report’s forecast.

The most impressive result is however the number of installations and consequently, the number of individuals, companies, and public entities participating in this development: nearly 2 million single PV installations produce photovoltaic power already today.

The cumulative electrical energy produced from global PV installations in 2010 equals more than half of the electricity demand in Greece, or the entire electricity demand in ten central African countries (Angola, Benin, Botswana, Cameroon, Congo, Cote d’Ivoire, Eritrea, Ethiopia, Gabon and Ghana).

The strong growth in PV installations is currently driven in particular by European countries, accounting for some 70% of the global market, followed by the promising key markets of North America, Japan, China and Australia. At the same time, the PV arena has importantly widened its number of participating countries and also increased their specific weight. Major new areas for development lie also in the Sunbelt region, in Africa, Middle East and in South America that is just starting to create new growth opportunities dedicated to covering local demand.

The major competitive advantages of PV technology lie in its versatility, i.e. the wide range of sizes and sites, resulting in proximity to electricity demand, in the value of its production profile concentrated during peak-load hours, and in its enormous potential for further cost reduction.

PV technology has reduced its unit costs to roughly one third of what it did 5 years ago, thanks to continuous technological progress, production efficiency and to its wide implementation. The trend of decreasing unit cost will continue in the future, just like in comparable industries such as semiconductors and TV screens. Adding to the important feature of integrated PV solutions in architecture in particular, the potential of further growth is simply enormous.

The 6th edition of the Solar Generation report combines different growth scenarios for global PV development and electricity demand until 2050. It is built on the results of several reference market studies in order to accurately forecast PV growth in the coming decades. In addition, the economic and social benefits of PV, such as employment and CO2 emissions reduction, are also analysed. With PV becoming a cost competitive solution for producing power, it will open up a variety of new markets and contribute more and more significantly to cover our future energy needs.

PV technology has all the potential to satisfy a double digit percentage of the electricity supply needs in all major regions of the world. Going forward, a share of over 20% of the world electricity demand in 2050 appears feasible, and opens a bright, clean and sunny future to all of us.