Photovoltaic news and pv jobs

Feed-in tariffs and the future of our business

12. June 2011 By:  Simon Rolland

Although there are some newbies around, most of the people at Intersolar this year are regulars, even though not many can claim they’re from the pre-Munich era, when the fair was still based in Frieburg.

Back then, Intersolar was a small get together of a niche market, but now PV is a proud mainstream industry with its own niches, such as off-grid street lighting, water pumping or desalination.

It’s not every day that a sector witnesses such rapid growth and as you talk to both recent recruits and long-time PV believers, it’s interesting to hear their opinion on the reasons behind this development and what the future holds for the sector and the fair.

One of the most widely accepted success factors is of course the European feed-in tariffs (FITs), which not only fueled the expansion of local industry, but also led to the emergence of new players around the world. When discussing how the business will look like in the future, feed-in tariffs are again mentioned, but this time vis a vis the consequences of their expected extinction.

As expected, the general decrease of FITs in many countries is generating a lot of debate this year: will the European sector survive or will it be eaten away by the Eastern giants? A few years ago, one of the most widely read trade publications dared speak up against the high-level of these support schemes and the un-natural growth of some companies. As expected, the industry went into uproar.

FITs have indeed brought many benefits, including massive employment and the price decrease that follows economies of scales and technological improvements, but they also led to a sector spoiled by artificial favorable conditions. As hard as it might be to accept right now, the phase-out of FITs might lead the way to a mature industry which, after some growing pains, will emerge ready to face head-on the opportunities of a free market.

The answer to a smooth transition might even already be at Intersolar. As the giant fair becomes increasingly less European and more international (a special nod to the rising number of exhibitors and visitors from Asia and Africa), so will companies look beyond Europe as a way to compensate for any income losses there.

As the Alliance for Rural Electrification has been defending for years (and as the evolution of Intersolar proves), the new Eldorado is now in developing and emerging economies. It’s there that attractive markets will develop, motivated by vast local needs and resources and a cost-competitive industry long used to overcome the toughest challenges.