by Bob Haavind, editor-at-large, Photovoltaic World
August 11, 2009 – The robust 40% CAGR for the global photovoltaic (PV) market is likely to slow down in 2009, and may even decline. This is partly due to the worldwide recession that has slowed planned projects and forced down prices, but an even bigger factor is that Spain’s huge boom of 2008 won’t be repeated this year. The 2.5GW of PV installations in Spain last year were close to half of the world’s total of 5.5GW, according to the European PV Industry Association (EPIA), but that surge was somewhat of a fluke.
While Spain did want to spur PV last year, the feed-in tariffs offered were miscalculated by officials, so that new installations could be paid off in as little as a year. This led to explosive growth which won’t be repeated in 2009 because Spain capped installations it will support at 0.5GW. That means that somehow the world market would have to make up that 2GW shortfall to match last year, which is unlikely industry observers believe.
Italy is a wild card in this year’s market, however. GSE, the state-run power agency, wants to jump-start its PV industry, so it is offering feed-in tariffs similar to Spain’s. The agency’s goal is to more than double the number of installations this year, reaching a total of 900MW to 1GW. GSE expects to support some 70,000 new projects, mostly roof-mounted PV panels in northern Italy. GSE is projecting its market to grow to 1500GW in 2010, achieving a CAGR of 135% from 2006 to 2010, according to Johan Trip of Solarplaza. This would move Italy up to #2 in Europe behind only Germany. The German market is somewhat similar to Italy in that 40% of its installed PV is for systems <10kW. That is in sharp contrast to Spain, where 91% of solar power hooked to the grid were >1MW ground-based utility installations.
The surge in Spain enabled the global PV market to reach $37.1B in 2008, more than double the 2007 total of $17.2B, according to EPIA figures. The 5.5GW installed last year brought the cumulative global total of PV capacity to 15GW. Spain led the world with 2.5GW, followed by Germany with 1.5GW. The top five also including the US (324MW), South Korea (247MW), and Italy (260MW), the EPIA reports. By 2013, with appropriate policies and feed-in tariffs, total installed PV capacity could reach 22GW, according to the association’s projections.
A European Renewable Energy Directive requires that 20% of the total energy output in Europe in 2020 comes from renewable sources. Each member state of the Common Market will have to specify how it intends to reach the 20% goal in its own country.
In Italy, with attractive feed-in tariffs along with module costs about half what they were last year, according to Solarplaza, a market boom is developing with more than 600 companies participating. Developers in southern Italy are aiming for more large-scale power plants rather than the smaller rooftop panels sprouting all over northern Italy. One player is Premier Power Renewable Energy, El Dorado Hills, CA, which in May reported it acquired privately held Arco Energy, an Italian solar project developer. Initially the partners say they will concentrate on large-scale green-field solar farms, but later they intend to move into the rooftop and then building-integrated photovoltaic (BIPV) installations all over Italy. By 2011, some believe, grid electricity may become so costly that incentives will not be needed to make solar installations profitable. Premier indicates that it believes that by 2016 Italy may reach 3GW of installed capacity.
But reaching this year’s target of 900MW will be a stretch, believe some in the industry, because of the lack of infrastructure. More likely would be about 500MW, but that still would double last year’s installations.
While the bulk of PV installations use crystalline silicon modules, thin film is about 10% of the market. This could grow to 30% by 2013, according to Andy London, global manager of Heraeus’ photovoltaic business unit in West Conshohocken, PA — but with a caveat. Commercial thin-film installations use cadmium telluride (CdTe) cells, although a bright future is also expected for copper indium gallium selenide (CIGS) cells because of the better match of their response to the solar spectrum. There could be a hitch, however, London pointed out — due to the toxicity of cadmium, it may be banned in the future in the European Community.
While the global PV market may stall this year, analysts expect it to resume its strong growth in 2010 and beyond as prices rise for fossil fuels and growing world economies compete for a limited supply.