New report evaluates global PV16. November 2012 | Markets & Trends, Global PV markets | By: Max Hall
Weighing in at a hefty 56 pages and 2MB, the World Research Institute’s (WRI) study of the global onshore wind and photovoltaic industries provides a useful introduction to the renewables story so far, but provides little new insight to seasoned observers.
The WRI has compiled a historical study of developments in the wind and photovoltaic industries across five of the world’s main markets since 2000.
The stated aim of the working document is to isolate the national policies which have most successfully developed the twin industries in Germany, Japan, the U.S., India and China and perhaps the main insight offered is a stark difference between the policy frameworks required to support photovoltaics and solar.
The report’s authors find that to support photovoltaics, separate policy frameworks are required for upstream and downstream processes, because positive developments in manufacturing solar are not automatically replicated in domestic take-up. That is down largely to the fact solar components are traded on a truly global scale whereas the complexity of wind turbine components ensures that successful wind industry manufacture in a regional hub is enough to ensure take-up nearby.
The Washington-based WRI worked with partner organizations in each of the countries concerned: the Institute for Global Environmental Strategies in Japan; the Öko Institute in Germany; Renmin University of China; and the Energy and Resources Institute to come up with a comprehensive historical survey of the story so far with the following results:
Germany is still a global Titan in terms of domestic take-up, chiefly because the feed-in tariffs applied under the sophisticated national Renewable Energy Act (EEG) have failed to keep pace with the plummeting cost of household solar units but also because of intelligently applied government policy support. Manufacturing lags behind because of the high cost of German modules and the shortfall is made up by importing cheaper Chinese and Indian modules.
The U.S. is berated for its state-led – and therefore piecemeal – policies and despite being a global player in polysilicon production, module and cell manufacturing is suffering from a lack of political will after policy makers backed the wrong horse with taxpayer billions in the form of higher-cost, high-risk thin film technologies. The price differentials means Chinese crystalline-silicon (c-Si) modules are more popular than domestic offerings, at least until Congress has their way.
Japan’s domestic market has fallen and risen in concert with the fortunes of nuclear, pre and post-Fukushima but manufacturing, despite its expensive module costs is flourishing, partly because of high efficiencies and partly because Japanese-owned manufacturers are doing the leg work in cheaper territories nearby.
China’s pile ’em high, sell ’em cheap strategy – which some claim was bankrolled by cheap government money, saw the country become the dominant global player in manufacturing for the rest of the world long before domestic demand became the focus of the Communist party’s five-year plans. With U.S. and E.U. penalties set to bite, the powers-that-be have belatedly started developing what could be a huge domestic market which trading partners fear could become a closed shop.
But the Chinese still have not mastered cheap polysilicon production, handily ensuring any module trade penalties applied to them also hit poly manufacturers in the U.S. and E.U. in the pocket.
India is the new kid on the block, with a China-style export first then create a domestic market approach which is undone by a lack of cheap investment capital and a backward infrastructure. Contradictions abound with the national and state efforts to protect manufacturers prompting local content requirements on solar systems. These requirements ironically ensure it’s cheaper to import modules and cells than to buy them from domestic manufacturers forced to pay local-content-requirement-related duties on their raw materials.
Delivering on the Clean Energy Economy: The Role of Policy in Developing Successful Domestic Solar and Wind Industries is light on new insights – apart from the insight into how housing and construction companies in Japan have become part of the solar value chain – and crucially ignores the potentially huge market for solar in off-grid locations and across the developing world but it does offer a handy, if lengthy, introduction to the global photovoltaic economy.
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