EU’s solar leadership, future hinge on investments

March 3, 2009 – Europe’s “early and enthusiastic embrace of solar energy” now translates into a comfortable market lead over Japan and the US, and slightly ahead of China. And if the US expects to climb the ladder, iSuppli says there’s one key to success.

European firms supplied 27.4% of global PV cells (in Watts) in 2008, slightly ahead of China (25.8%), and “handily surpassing” Japan (16.2%) and the US (13.7%), noted Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli, in a statement. Q-Cells was the largest producer, and Norway’s REC is also among top suppliers across the PV landscape from raw polysilicon to cell/module manufacturing to system installation services. Germany’s SolarWorld and UK’s BP Solar also have shown success in cell/module production.

Beyond production, Europe is also “by far” the largest solar installation market as well. More than 80% of new worldwide PV capacity in 2008 was installed in Europe, heavily concentrated in Germany and Spain.

Global PV cell production (in Watts) in 2008, crystalline and thin-film. (Source: iSuppli)

All of this is no accident, notes Wicht. “European governments, research institutions and industry players during the last two decades have worked in close coordination to reach this point,” spurred by a desire to depart from hydrocarbon-based energy sources as well as stimulate job and industry growth, he writes.

Moreover, some EU solar firms are casting lines across the Atlantic to take advantage of “invigorated government incentives” now being seeded in the US, Wicht notes.

If the US wants to push its own PV agenda on the global stage, it should take note of one key aspect that boosted Europe’s efforts: feed-in tariffs that incentivize entities to feed solar energy into the grid in exchange for premium pricing and thus better ROI for PV installations. Such incentives are slowing somewhat in Europe, notably in Spain, but have “successfully served their purpose of driving down prices by building a large-scale, competitive PV supply chain,” Wicht notes.

The EU Commission has new goals to have solar generate 15% of its electricity by 2020 (12% PV, 3% solar thermal), and is supporting public/private partnerships in EC member states to speed deployment toward those goals, through projects such as large solar power plants, urban integration, and “transnational rural electrification,” Wicht notes.

That deployment may “be a bottleneck” to achieving that 12% target for PV solar energy supplies, which would translate to an estimated €300B savings in annual electricity costs. Anton Milner, Q-Cells CEO and spokesperson of the European Photovoltaic Industry Association (EPIA), cited in the iSuppli PR, lists several changes that will be needed:

– Grid management capable of supporting a large supply of solar power during daylight;
– Efficient storage systems;
– Government-supported utilities that can handle a solar energy production ramp-up.

The €300B was calculated based on solar installations being cheaper than nuclear or coal facilities, and the price benefit (i.e., free) of sunlight vs. other fuels.


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