In its new ‘PV Status Report 2012, Research, Solar Cell Production and Market Implementation of Photovoltaics’, the JRC states that photovoltaics is the "key" to a decarbonized energy landscape, due to the global abundance of solar resources and its unsuitability for monopolization.
"Regardless for what reasons, and how fast the oil price and energy prices increase in the future, photovoltaics and other renewable energies are the only ones to offer a reduction of prices, rather than an increase in the future," states report author, Arnulf Jäger-Waldau.
Fossil fuel subsidies
While positive, the news will do nothing to sweeten the fact that fossil fuels are still receiving strong political support, in the form of subsidies, across the globe. Indeed, a thorn in many a renewable energy industry players side is the continuation of the generous fossil fuel subsides, which are currently flying in the face of reductions to renewable energy policies and, specifically, photovoltaic remuneration, in such regions as Germany, Italy, Spain, France, Australia, the U.S. and the U.K.
According to the International Energy Agency (IEA), in 2010, US$409 billion was spent, by 37 governments, "on artificially lowering the price of fossil fuels". In the same year, renewable energy subsidies were said to have reached just $66 billion.
Meanwhile, according to a joint report by the IEA, Organization of the Petroleum Exporting Countries (OPEC), Organization for Economic Co-Operation and Development (OECD) and the World Bank, released in 2011, around $1,840 billion (1,415 billion) was spent on direct fossil fuel consumption subsidies and tax breaks between 2007 and 2010.
"With 2007 to 2010 PV system prices, this subsidy would have been sufficient to install about 340 GW of PV systems world-wide. With the current system cost around 3 $/Wp (2.3 %/Wp), the amount would be sufficient to install 610 GW of photovoltaic electricity systems," continues Jäger-Waldau.
Despite the subsidy saga, renewable energy investment was said to have hit a record high of $263 billion (202 billion) in 2011, with 85% of the funds coming from non-governmental, non-research sources, says Jäger-Waldau.
Comprising the lions share was the solar sector, which accrued $128 billion (98.5 billion) of the $263 billion total. Broken down, investments in distributed photovoltaic projects was said to have grown the most, at 25%, to reach $71.5 billion (55 billion); followed by public and private research and development investments at $26 billion (20 billion); asset finance at $141 billion (108 billion); and venture capital and private equity investments at $8.6 billion (6.6 billion).
Referring to the difficult economic situation lingering in the photovoltaics industry, the JRC report said that while issues will remain in the near term, it will continue to demonstrate "significant long-term growth". However, due to the accelerated pace the industry is growing at, and taking into account its GW ambitions, consolidation is a reality, representing both opportunities and risks.
"If the new large solar cell companies use their cost advantages to offer lower-priced products, customers will buy more solar systems and it is expected that the PV market will show an accelerated growth rate. However, this development will influence the competitiveness of small and medium companies as well.
"To survive the price pressure of the very competitive commodity mass market, and to compensate the advantage of the big companies made possible by economies of scale that come with large production volumes, they have to specialise in niche markets with high value added in their products," states Jäger-Waldau, who adds, "The other possibility is to offer technologically more advanced and cheaper solar cell concepts."
Overall, he believes a number of different pathways have to be pursued concurrently, in order to maintain the "extremely high" growth rate of the industry. These are:
- Further reduction of material consumption per silicon solar cell and Wp, e.g. higher efficiencies, thinner wafers, less wafering losses, etc.;
- Accelerated ramp-up and cost reduction of thin-film solar cell manufacturing;
- Accelerated CPV introduction into the market, as well as capacity growth rates above the normal trend;
- Development of new business models for the collection, sale and distribution of photovoltaic electricity, e.g. development of bidding pools at electricity exchanges, virtual power plants with other renewable power producers and storage capacities; and
- Adaptation of the regulatory and legal procedures to ensure a fair and guaranteed access to the electricity grid and market.
A number of emerging markets were further identified. They are: Africa, specifically, Cape Verde, Kenya, Morocco and South Africa; Argentina, Brazil, Chile, the Dominican Republic, Mexico and Peru.
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