PV status report discusses path ahead; perception, regulations and limitations analyzed09. September 2011 | Top News, Markets & Trends, Global PV markets, Industry & Suppliers | By: Nicholas Stone
A major shift away from Europe and the maintenance of worldwide photovoltaic programs are again the two major factors that will dominate photovoltaic market development in the coming years, according to a new report.
The report into "Research, Solar Cell Production and Market Implementation of Photovoltaics" was compiled by the European Commission, Joint Research Centre, and Institute for Energy, and is now in its tenth edition. It maintains that growth will be very strong, as long as familiar issues are kept under control.
The report said that the photovoltaic industry will need to confront perception, regulatory frameworks, and the limitations of the existing electricity transmission and distribution structures to take advantages of the "huge opportunities" in the future.
"A lot of the future market developments, as well as production increases, will depend on the realisation of the currently announced world-wide PV programmes and production capacity increases," the report said.
Business forecasters used in the report envisage increasing investments in photovoltaic technology and anticipate that it will grow from the present €35 billion to €40 billion in 2010, to more than €70 billion in 2015, while the prices are expected to continue on their downward trajectory.
In the short-term, massive capacity increases are beginning or announced and if all of them come into fruition, the worldwide production capacity for solar cells should exceed 80 gigawatts (GW) at the end of 2012.
The news is also good for long-term growth and the report quotes a strong framework as being a driving factor keeping the market outlook encouraging.
The report also cited the International Energy Agency’s Energy Technology Perspectives 2010, and stated that for its current Baseline Scenario, total investments in energy supply and use for the period between 2007 and 2050 totals USD$270 trillion (€208 trillion).
It still remains hard to predict how the market entrance of all the new players over the world will impact upon future developments of the new markets.
Market predictions and expansion
One of the key attributes to the report is its analysis of the emerging markets, which it claims will start to dominate global output.
If all the ambitious plans of the emerging countries can be realized by 2015, China will have about 46.3 percent of the worldwide production capacity of 102 GW, followed by Taiwan with 15.8 percent, and then Europe at 9.5 percent, signifying a major shift.
"The overall world market is gradually changing into a more balanced one," says the report.
Other emerging markets, like Bangladesh, Indonesia, Malaysia, The Philippines and Vietnam have all been receiving favorable government assistance and have set ambitious targets for themselves.
If growth continues, Malaysia is expected to become the sixth largest solar market in the world and the other countries will begin to develop more on-grid installations, with Vietnam in particular developing plans for major plants.
With the help of external organizations like the World Bank and the Asian Development Bank, as well as increased governmental infrastructure, they will all develop into bigger players in the market.
Of the Asian countries that have been developing major solar plans for a little longer, India, Japan, South Korea, China, and Taiwan have all been singled out by the report with positive and expansive growth rates.
All are now deeply entrenched in solar growth projects, with countries like India providing a rapidly increasing number of companies recognized on a global scale, such as Bharat Heavy Electricals and Tata BP Solar.
Amongst the 20 biggest photovoltaic manufacturers in 2010, only four had production facilities in Europe, namely First Solar (U.S., Germany, Malaysia, Vietnam), Q-Cells (Germany and Malaysia), REC (Norway and Singapore) and SolarWorld (Germany and U.S.). However, as been reported in the past weeks, with the exception of First Solar, all of them have either closed plants down, or announced restructuring plans.
The report also provides extensive analysis of all major global markets and has positive outlooks for most of Europe and North America. Again, the key factors include technological development and government assistance.
"The European PV industry is still very well positioned along the whole value chain," said the report, "especially in the equipment manufacturing part, as well as the inverter manufacturing and project businesses."
Issues with FITs
Emerging from the report as the major issue in the push forward will be the governmental treatment of feed-in tariffs (FITs) and other schemes. This was also highlighted yesterday at the 26th EU PVSEC, at the first business forum, which discussed future photovoltaic business models.
For 2011, another $68 billion (€52.3 billion) of governmental 'green stimulus' money is expected to hit the market, but providing a solid base and continued support is critical, according to the report.
"Stable political and socio-economically viable frame conditions do not only convince private and commercial investors to install photovoltaic power plants, but also stimulate the investment in new manufacturing capacities along the whole value chain, from raw materials to system components," it said.
The motivation of individuals to use the technology is also helped greatly by FITs.
"Even with the current economic difficulties, the number of market implementation programmes world-wide is still increasing," the report said. "This as well as the overall rising energy prices and the pressure to stabilise the climate, will continue to keep the demand for solar systems high."
Continued and varied growth
The technology mix moving forward is expected to stay similar to the levels that we have today.
Wafer-based silicon solar cells is still the main technology and held around 85 percent of 2010's market share. However, if expansion plans come into play, thin film production capacity could reach 17 GW, or 21 percent of the total 80 GW in 2012, and 27 GW, or 26 percent, in 2015 of a total of 102 GW.
Concentrating photovoltaics (CPV) is an emerging technology. With market estimates for 2010 in the 10 to 20 megawatt (MW) range, the market share of CPV is still small, but analysts forecast an increase to more than 1,000 MW globally by 2015.
"The existing photovoltaic technology mix is a solid foundation for future growth of the sector as a whole," the report said. "No single technology can satisfy all the different consumer needs, ranging from mobile and consumer applications, with the need for a few watts to multi MW utility-scale power plants."
The report concludes that a number of different pathways have to be pursued at the same time to continue to drive the market.
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