Solar photovoltaic electricity empowering the world

2011

Solar generation 6Solar photovoltaic electricityempowering the world 2011

forewordThe European PhotovoltaicIndustry Association andGreenpeace International arepleased to present this 6th editionof the report “Solar Generation:Solar Photovoltaic ElectricityEmpowering the World”.

This report aims to provide a clearand understandable description ofthe current status of developingPhotovoltaic power generationworldwide, and also of itsuntapped potentials and growthprospects in the coming years.

During 2010, the Photovoltaic (PV)market has shown unprecedentedgrowth and wide-spread use of thisenvironmentally friendly anddistributed source of powergeneration. On a global basis, newPV installations of approximately15,000 MW have been addedduring 2010, taking the entire PVcapacity to almost 40,000 MW. Thisresult is even above the optimisticforecast contained in the report, andit also translates into investments ofover 50 bn€ in 2010, again aheadof the report’s forecast.

The most impressive result is howeverthe number of installations andtherefore of individuals, companies,and public entities participating in thisdevelopment: nearly 2 million singlePV installations produce photovoltaicpower already today.

The cumulative electrical energyproduced from global PV installationsin 2010 equals more than half of theelectricity demand in Greece, or theentire electricity demand in tencentral African countries.*

The strong growth in PV installationsis currently driven in particular byEuropean countries, accounting forsome 70% of the global market, andaccompanied by the promising keymarkets of North America, Japan,China and Australia. At the sametime, the PV arena has importantlywidened its number of participatingcountries and also increased theirspecific weight. Major new areas fordevelopment lie also in the Sunbeltregion, with Africa, Middle East andSouth America just starting to create new growth opportunities,almost always dedicated to coveringlocal demand.

* Angola, Benin, Botswana, Cameroon,Congo, Cote d’Ivoire, Eritrea, Ethiopia,Gabon and Ghana.

3

foreword

Installing thin film modules.

The major competitive advantages ofPV technology lie in its versatility, i.e.the wide range of sizes and sites,resulting into proximity to electricitydemand, in the value of its productionprofile concentrated during peak-loadhours, and in its enormous potentialfor further cost reduction.

PV technology has reduced its unitcosts to roughly one third of where itstood 5 years ago, thanks tocontinuous technological progress,production efficiency and to its wideimplementation. The trend ofdecreasing unit cost will continuealso in the future, just like in

comparable industries such assemiconductors and TV screens.Adding the important feature ofintegrated PV solutions in particularin building architecture, the potentialof further growth is simply enormous.

This edition of the Solar Generationreport combines different growthscenarios for global PV developmentand electricity demand until 2050. Itis built on the results of severalreference market studies in order toaccurately forecast PV growth in thecoming decades. In addition, theeconomic and social benefits of PV,such as employment and CO2

emissions reduction, are alsoworked out. With PV becoming acost competitive solution forproducing power, it will open up anincreasing variety of new marketsand contribute more and moresignificantly to cover our futureenergy needs.

PV technology has all the potential tosatisfy a double digit percentage ofthe electricity supply needs in allmajor regions of the world. Goingforward, a share of over 20% of theworld electricity demand in 2050appears feasible, and opens a bright,clean and sunny future to all of us.

epiaIngmar WilhelmPresident European Photovoltaic Industry Association (EPIA)

greenpeaceSven TeskeRenewables Director Greenpeace International

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foreword 2

executive Summary 6Status of solar power now 6Imagining a future with a fair share of sun 6What are the benefits? 7How can we get there? 7Learning from the pioneers 8Reference for the future 8

1 Solar baSicS 91.1. What does photovoltaic mean? 101.2. Benefits of PV technology 10

a. Environmental footprint of PV 10b. Improving grid efficiency 10c. Making cities greener 11d. No limits 11

1.3. Types of PV systems 11a. Grid connected systems 12b. Stand-alone, off-grid and hybrid systems 13

1.4. The Solar potential 141.5. Example: How PV can meet

residential consumption 15

2 Solar technology and induStry 172.1. PV systems 17

a. PV cells and modules 17b. Inverters 18c. Batteries and charge controllers 18

2.2. Photovoltaic technologies 20a. Crystalline silicon technology 20b. Thin Films 22c. Concentrator photovoltaics 24d. Third generation photovoltaics 25e. Historical and future evolution 26

2.3. The PV value chain 27a. Consolidation trends in the solar industry 27

3 Solar coSt and competitiveneSS: towardS grid parity 293.1. Price competitiveness of PV 30

a. PV module price 30b. PV system price 31c. PV Electricity generation cost 32d. Electricity price evolution 33e. Market segments for PV 35

3.2. Factors affecting PV system cost reduction 37a. Technological innovation 37b. Production optimisation 38c. Economies of scale 38d. Increasing the performance ratio of PV systems 38

e. Extending the life of PV systems 39f. Development of standards and specifications 40

g. Next generation technologies 403.3. PV in electricity networks

and energy markets 41a. High penetration of PV in the grids 41

b. From centralised to decentralisedenergy generation 43

contentS

5

4 Solar policieS 454.1. Policy drivers for the development

of solar PV 46a. Feed-in Tariffs: Key driver of solar success 46

b. Other drivers of a successful PVmarket development 50

4.2. Policies in the top ten markets 534.3. Developing a world-wide PV

policy outlook 57a. The European Union: A driver of PV development in Europe and the world 57

b. The desert is a perfect place to develop PV energy 58

c. PV in the Sunbelt region: Ongoing policy developments 59

d. Smart cities 59

5 Solar power market 625.1. History of PV markets 63

a. Europe at the forefront of PV development 63

b. Japan and USA lead outside Europe 63

c. Distribution of the world PV market in 2009 64

d. Root causes of PV market development 64

e. Future PV markets: The Sunbelt region 65

f. A bright future for PV 655.2. The Greenpeace/EPIA

Solar Generation Scenarios 68a. Methodology and assumptions 68b. Scenario assumptions 69

5.3. Key results 72

a. Global scenario 72b. Regional development 74c. Employment and investment 77d. CO2 reduction 78

6 Solar benefitS and SuStainability 796.1. Economic benefits 806.2. Environmental factors 82

a. Climate change mitigation 82b. Energy payback time (EPBT) 84c. Water consumption 85d. Recycling 85

6.3. Social aspects 86a. Employment 86b. Skilled labour and education 86

6.4. Rural electrification 87

liSt of acronymS 91

referenceS 93

liSt of figureS & tableS 94

image creditS 96

contentS

6

executive Summary

Status of solar power today

At the end of 2009 the world was running 23 GWof photovoltaic (PV) electricity, the equivalent of 15coal-fired power plants. At the end of 2010, thisnumber should reach more than 35 GW. We haveknown for decades that just a portion of the energyhitting the Earth’s surface from the Sun every daycould power all our cities several times over.

Solar can and must be a part of the solution tocombat climate change, helping us shift towardsa green economy. It is also a potentiallyprosperous industry sector in its own right. Someindustry indicators show just how far photovoltaicenergy has already come.

• The cost to produce solar power has droppedby around 22% each time world-wideproduction capacity has doubled reaching anaverage generation cost of 15c€/KWh in EU.

• Average efficiencies of solar modules haveimproved a couple percentage points per year.The most efficient crystalline silicon modules,go to 19.5% in 2010 with a target of 23%efficiency by 2020, which will lower pricesfurther. That increase in efficiencies is seen inall PV technologies.

• Solar power booms in countries where theboundary conditions are right.

• Over 1,000 companies are involved in themanufacturing of the established crystallinesilicon technology and already more than 30produce Thin Film technologies.

• The energy pay time back the electricity it tookto create them in one to three years. The mostcutting-edge technologies have reduced this tosix months depending on the geographies andsolar irradiation, while the average life ofmodules is more than 25 years.

Imagining a future with a fair share of Sun

The European Photovoltaic Industry Association(EPIA) and Greenpeace commissioned updatedmodelling into how much solar power the worldcould reasonably see in the world by 2030. Themodel shows that with a Paradigm Shift scenariotowards solar power, where real technical andcommercial capacity is backed-up by strongpolitical will, photovoltaics could provide:

• 688 GW by 2020 and 1,845 GW by 2030.

• Up to 12% of electricity demand in Europeancountries by 2020 and in many Sunbeltcountries (including China and India) by 2030.Around 9% of the world’s electricity needs in 2030.

Under an Accelerated scenario, which follows theexpansion pattern of the industry to date andincludes moderate political support, photovoltaicscould provide:

• 345 GW by 2020 and 1,081 GW by 2030

• Around 4% of the world’s electricity needs in 2020.

“Solar canand must be a part of thesolution to climatechange,helping us shift away from fossil fueldependence.”

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executiveSummary

What are the benefits?

The benefits of a Paradigm Shift towards solarelectricity as described in this model include:

• Provide clean and sustainable electricity to the world.

• Regional development, by creation of localjobs. New employment levels in the sector – asmany as 1.62 million jobs as early as 2015,rising to 3.62 million in 2020 and 4.64 millionin 2030.

• Clean electricity that contributes to internationaltargets to cut emissions and mitigate climate change.

• Avoiding up to 4,047 million tonnes of CO2

equivalent every year by 2050. The cumulativetotal of avoided CO2 emissions from 2020 to2050 would be 65 billion tonnes.

How can we get there?

A Paradigm Shift for solar is possible. While the PVsector is committed to improve efficiency ofproducts and reduce costs, these aspects are notthe major issues either. In fact, solar power is due toreach grid parity in a number of countries, some asearly as 2015. Lessons from real examples showthere are some key approaches to getting it right insolar power support schemes. These include:

Using Feed-in Tariffs (FiT) that guaranteeinvestment for 15 to 20 years. FiT schemeshave been proven to be the most efficient supportmechanisms with a long, proven ability to developthe market world-wide.

Assessing PV investment profitability on aregular basis and adapting FiT levelsaccordingly. A fair level of FiT can help the markettake-off and avoid over heated markets.

Assessing profitability through IRRcalculations. All aspects of a support schemeincluding FiT, tax rebates and investment subsidiesmust be considered when calculating the internalrate of return (IRR) of a PV investment.

Controlling the market with the upgraded“corridor” concept. The corridor is a marketcontrol mechanism that allows to adjust FiT levelsto accelerate or slow the PV market in a country.The FiT level can be increased or decreasedregularly in relation to how much PV is in themarket against predefined thresholds at regularintervals (for example, annually).

Refining FiT policies for additional benefits.The way a scheme is designed can encouragespecific aspects of PV power. For example,systems that are integrated into buildings andsubstitute building components.

Drawing a national roadmap to grid parity.Financial incentives can be progressively phased-outas installed PV system costs are decreased andconventional electricity prices are increasing.

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Learning from the pioneers

Some nations have taken a lead with supportschemes that encourage market creation andindustry growth.

Germany: The first country to introduce a FiT, hasshown the rest of the world how countries canachieve environmental and industrial developmentat the same time.

Japan: More than 2.6 GW of solar power wereinstalled in 2009, almost 99% of which were grid-connected thanks to incentives administered bythe Ministry of Economy, Trade and Industry.

Italy: Uses a FiT with higher rates for buildingintegrated systems (guaranteed for 20 years)accompanied with net metering to encourage solar power.

USA: Allows a tax credit of 30% for commercialand residential PV systems that can be used byutilities. Several States offer very attractiveschemes and incentives.

China: The world’s largest PV manufacturer withunlocked its PV market potential. The country isdiscussing FiT to meet a goal of 20 GW of solarpower installed by 2020, 5 GW of this by 2015 which is of course negligible considering itshuge potential.

Reference for the future

This publication is the sixth edition of the referenceglobal solar scenarios that have been establishedby the European Photovoltaic Industry Associationand Greenpeace jointly for almost ten years. Theyprovide well documented scenarios establishingthe PV deployment potential World-wide by 2050.

The first edition of Solar Generation was publishedin 2001. Since then, each year, the actual globalPV market has grown faster that the industry andGreenpeace had predicted (see table 1). “The solar PV

market hasoutpaced‘SolarGeneration’predictionsby nineyears.”

Year

Market Result MW

SG I 2001

SG II 2004

SG III 2006

SG IV 2007

SG V 2008

SG VI 2011

2001

334

331

2002

439

408

2003

594

518

2004

1,052

659

2005

1,320

838

985

2006

1,467

1,060

1,283

1,883

2007

2,392

1,340

1,675

2,540

2,179

2008

6,090

1,700

2,190

3,420

3,129

4,175

2009

7,203

2,150

2,877

4,630

4,339

5,160

2010

2,810

3,634

5,550

5,650

6,950

13,625

TABLE 1ANNUAL PV INSTALLED CAPACITYMW

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Solar baSicS 1

FIGURE 1 THE MEANING OF THEWORD “PHOTOVOLTAIC”

PHOTON = LIGHT VOLT = UNIT OFELECTRICPOTENTIAL

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1 Solar baSicS

1.1. What does photovoltaic mean?

Photovoltaic systems contain cells that convertsunlight into electricity. Inside each cell there arelayers of a semi-conducting material. Light fallingon the cell creates an electric field across thelayers, causing electricity to flow. The intensity ofthe light determines the amount of electrical powereach cell generates.

A photovoltaic system does not need bright sunlightin order to operate. It can also generate electricityon cloudy and rainy days from reflected sunlight.

1.2. Benefits of PV technology

PV technology exploits the most abundant sourceof free power from the Sun and has the potentialto meet almost all of mankind’s energy needs.Unlike other sources of energy, PV has a negligibleenvironmental footprint, can be deployed almostanywhere and utilises existing technologies andmanufacturing processes, making it cheap andefficient to implement.

“PVtechnologyexploits avirtuallylimitlesssource offree powerfrom thesun.”

FIGURE 2 EXAMPLE OF THEPHOTOVOLTAIC EFFECT

++

–– N-TYPE SILICON

P-TYPE SILICON

‘HOLE’ FLOW

ELECTRON FLOWPHOTONS

CURRENT

LOAD

JUNCTION

source: EPIA.

source: EPIA.

a. Environmental footprint of PV

The energy it takes to make a solar power systemis usually recouped by the energy costs savedover one to three years. Some new generationtechnologies can even recover the cost of theenergy used to produce them within six months,depending on their location. PV systems have atypical life of at least 25 years, ensuring that eachpanel generates many times more energy than itcosts to produce.

b. Improving grid efficiency

PV systems can be placed at the centre of anenergy generation network or used in adecentralised way. Small PV generators can bespread throughout the network, connecting directlyinto the grid. In areas that are too remote orexpensive to connect to the grid, PV systems canbe connected to batteries.

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Solar baSicS1

“There are nosubstantiallimits to thedeploymentof PV.”

Why solar ticks all the boxes:

☑ Free energy direct from the Sun

☑ No noise, harmful emissions or gases are produced

☑ Safety and reliability are proven

☑ Each module lasts around at least 25 years

☑ Systems can be recycled at the end of their life and the materials re-used

☑ PV is easy to install and has very low maintenance requirements

☑ Power can be generated in remote areas that are not connected to the grid

☑ Solar panels can be incorporated into the architecture of a building

☑ The energy used to create a PV system can be recouped quickly (between six monthsand three years) and that timeframe is constantly decreasing as technology improves

☑ Solar power can create thousands of jobs

☑ Solar contribute to the security of energy supply in every country.

c. Making cities greener

With a total ground floor area over 22,000 km2,40% of all building roofs and 15% of all facades inEU 27 are suited for PV applications. This meansthat over 1,500 GWp of PV could technically beinstalled in Europe which would generate annuallyabout 1,400TWh, representing 40% of the totalelectricity demand by 2020. PV can seamlesslyintegrate into the densest urban environments. Citybuildings running lights, air-conditioning andequipment are responsible for large amounts ofgreenhouse gas emissions, if the power supply isnot renewable. Solar power will have to becomean integral and fundamental part of tomorrow’spositive energy buildings.

d. No limits

There are no substantial limits to the massivedeployment of PV. Material and industrial capabilityare plentiful and the industry has demonstrated anability to increase production very quickly to meetgrowing demands. This has been demonstrated incountries such as Germany and Japan which haveimplemented proactive PV policies.

Greenpeace has supported solar power as a cleanway to produce power for 20 years. This is mainlybecause it avoids the harmful impact on theenvironment caused by carbon dioxide. Carbon

dioxide is emitted during the burning of oil, coal andgas to generate electricity. The European PhotovoltaicIndustry Association has been actively working for thepast 25 years to promote a self-sustaining PV industry.

1.3. Types of PV systems

PV systems can provide clean power for small or large applications. They are already installed and generating energy around the world onindividual homes, housing developments, officesand public buildings.

Today, fully functioning solar PV installations operatein both built environments and remote areas whereit is difficult to connect to the grid or where there isno energy infrastructure. PV installations thatoperate in isolated locations are known as stand-alone systems. In built areas, PV systems can bemounted on top of roofs (known as BuildingAdapted PV systems – or BAPV) or can beintegrated into the roof or building facade (knownas Building Integrated PV systems – or BIPV).

Modern PV systems are not restricted to squareand flat panel arrays. They can be curved, flexibleand shaped to the building’s design. Innovativearchitects and engineers are constantly findingnew ways to integrate PV into their designs,creating buildings that are dynamic, beautiful andprovide free, clean energy throughout their life.

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a. Grid connected systems

When a PV system is connected to the localelectricity network, any excess power that isgenerated can be fed back into the electricity grid.Under a FiT regime, the owner of the PV system ispaid according the law for the power generated bythe local electricity provider. This type of PV systemis referred to as being ‘on-grid’.

Residential and commercial systems

Most solar PV systems are installed on homes andbusinesses in developed areas. By connecting tothe local electricity network, owners can sell theirexcess power, feeding clean energy back into thegrid. When solar energy is not available, electricitycan be drawn from the grid.

Solar systems generate direct current (DC) whilemost household appliances utilise alternatingcurrent (AC). An inverter is installed in the systemto convert DC to AC.

Industrial and utility-scale power plants

Large industrial PV systems can produceenormous quantities of electricity at a single pointrespectful of the environment. These types ofelectricity generation plants can produce frommany hundreds of kilowatts (kW) to severalmegawatts (MW).

The solar panels for industrial systems are usuallymounted on frames on the ground. However, theycan also be installed on large industrial buildingssuch as warehouses, airport terminals or railwaystations. The system can make double-use of anurban space and put electricity into the grid whereenergy-intensive consumers are located.

grid-connected BIPV systemon the roof and façade of acommercial building.

Large ground-mountedsystem in Germany.

Type of application

Ground-mounted

Roof-top

Integrated to facade/roof

Commercial10kWp - 100kWp

✓

✓

Residential< 10 kWp*

✓

✓

Market segment

Industrial100kWp - 1MWp

✓

✓

Utility scale>1MWp

✓

TABLE 2TYPICAL TYPE AND SIZE OF APPLICATIONS PER MARKET SEGMENT

* Wp : Watt-peak, a measure of the nominal power of aphotovoltaic solar energy device.

13

Solar baSicS1

b. Stand-alone, off-grid and hybrid systems

Off-grid PV systems have no connection to anelectricity grid. An off-grid system is usuallyequipped with batteries, so power can still be usedat night or after several days of low Irradiation. Aninverter is needed to convert the DC powergenerated into AC power for use in appliances.

Most standalone PV systems fall into one of threemain groups:

• Off-grid industrial applications

• Off-grid systems for the electrification of rural areas

• Consumer goods.

Off-grid industrial applications

Off-grid industrial systems are used in remoteareas to power repeater stations for mobiletelephones (enabling communications), trafficsignals, marine navigational aids, remote lighting,highway signs and water treatment plants amongothers. Both full PV and hybrid systems are used.Hybrid systems are powered by the Sun when it isavailable and by other fuel sources during the nightand extended cloudy periods.

Off-grid industrial systems provide a cost-effectiveway to bring power to areas that are very remotefrom existing grids. The high cost of installing cablingmakes off-grid solar power an economical choice.

Off-grid systems for rural electrification

Typical off-grid installations bring electricity toremote areas or developing countries. They can besmall home systems which cover a household’sbasic electricity needs, or larger solar mini-gridswhich provide enough power for several homes, acommunity or small business use.

Consumer goods

PV cells are now found in many everyday electricalappliances such as watches, calculators, toys,and battery chargers (as for instance embeddedin clothes and bags). Services such as watersprinklers, road signs, lighting and telephoneboxes also often rely on individual PV systems.

“Off-gridsystemsprovide acost-effectiveway to bringpower toremoteareas.”

Off-grid industrialapplication.

Public lights in Berlin.

Rural electrificationsystem in an African village.

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1.4. The Solar potential

There is more than enough solar irradiationavailable to satisfy the world’s energy demands.On average, each square metre of land on Earthis exposed to enough sunlight to generate 1,700kWh of energy every year using currently availabletechnology. The total solar energy that reaches theEarth’s surface could meet existing global energyneeds 10,000 times over.

A large amount of statistical data on solar energyavailability is collected globally. For example, theUS National Solar Radiation database has 30years of solar irradiation and meteorological datafrom 237 sites in the USA. The European JointResearch Centre (JRC) also collects and publishesEuropean solar irradiation data from 566 sites1.

Where there is more Sun, more power can begenerated. The sub-tropical areas of the worldoffer some of the best locations for solar powergeneration. The average energy received in Europeis about 1,200 kWh/m2 per year. This compareswith 1,800 to 2,300 kWh/m2 per year in theMiddle East.

While only a certain part of solar irradiation can beused to generate electricity, this ‘efficiency loss’does not actually waste a finite resource, as it doeswhen burning fossil fuels for power. Efficiency lossesdo, however, impact on the cost of the PV systems.This is explained further in Part 3 of this report.

EPIA has calculated that Europe’s entire electricityconsumption could be met if just 0.34% of theEuropean land mass was covered withphotovoltaic modules (an area equivalent to theNetherlands). International Energy Agency (IEA)calculations show that if 4% of the world’s very drydesert areas were used for PV installations, theworld’s total primary energy demand could be met.

There is already enormous untapped potential.Vast areas such as roofs, building surfaces, fallowland and desert could be used to support solarpower generation. For example, 40% of theEuropean Union’s total electricity demand in 2020could be met if all suitable roofs and facades werecovered with solar panels2.

“The totalsolar energythat reachesthe Earth’ssurface couldmeet existingglobal energyneeds 10,000times over.”

FIGURE 3 SOLAR IRRADIATIONVERSUS ESTABLISHEDGLOBAL ENERGYRESOURCES

ANNUAL SOLARIRRADIATION TO THE EARTH

FIGURE 4 SOLAR IRRADIATIONAROUND THE WORLD

2500

200050

0

-50

1500

1000

-150 -100 -50 0 50 100 150

[kW

h /

(m2)

]

source: Gregor Czisch, ISET, Kassel, Germany.

WIND

SOLAR (CONTINENTS)

BIOMASS

GEOTHERMAL

OCEAN & WAVE

HYDRO

COAL

GAS

OIL

NUCLEAR

PRIMARY ENERGYCONSUMPTION

FOSSIL FUELS ARE EXPRESSED WITH REGARD TO THEIR TOTAL RESERVES WHILE RENEWABLE ENERGIES TO THEIR YEARLY POTENTIAL.

source: DLR, IEA WEO, EPIA’s own calculations.

GLOBAL ANNUAL ENERGY CONSUMPTION

15

Solar baSicS1

1.5. Example: How PV can meet residential consumption

Electricity produced by a PV installation on a houseover a year can generally cover the demands of atypical family. The graph in Figure 5 shows the dailyelectricity needs for a household of 2-3 people,compared to the electricity generated from a 20m² PV installation in a sunny region (about 1200kWh/kWp). Electricity demand is largely met andexceeded during spring and summer. In wintermore electricity is used for lighting and heating,and there is a shorter daytime period. In this periodthe house can draw additional power from the grid.

The model assumes that the PV system usesmodules with efficiency of 14%, and that it is installedon a roof at the optimum inclination angle. The SunriseProject toolbox has been used for calculations.

“Electricitydemand islargely metandexceededduring springandsummer.”

European population

Total ground floor area

Building-integrated solarpotential (roofs and facades)

Expected electricity demand

Potential share of electricitydemand covered by building-integrated PV

497,659,814

22,621 km2

12,193 km2 or

1,425 TWh/a

3,525 TWh/a

40%

TABLE 3POTENTIAL FOR SOLAR POWERIN THE EU-27 IN 2020

source: Sunrise project/EPIA.

Daily output in March

16

14

12

10

8

6

4

2

0Daily output in July

Daily output in September

Daily output in December

DAILY PV ELECTRICITY OUTPUT

ELECTRICAL APPLIANCES CONSUMPTION

FIGURE 5COMPARISON OF THE AVERAGE DAILYELECTRICITY NEEDS OF A 2-3 PEOPLEHOUSEHOLD WITH THE ELECTRICITYOUTPUT OF A 20M² PV SYSTEM. kWh/day

source: Sunrise project/EPIA.

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Table 3 shows the electricity demand of typicalhouseholds in nine different countries. The tablealso shows the area that would need to be coveredin PV modules to cater to this demand. Thenumbers are averages, so large deviations arepossible for individual households. These dependon factors such as the energy efficiency of thedwelling, the number of household appliance, andthe level of insulation against heat loss and intrusion.

Depending on solar irradiation levels in each cityand the electricity consumption pattern of a typicalhome, the required area for solar power rangesfrom 14 m² in Rome, to 45 m² in New York. Theamount of roof space available for solar powergeneration varies by country. The average rooftoparea needed per household in Tokyo or Seoul issignificantly lower than that in Munich.

For solar energy to be truly effective, it must beimplemented together with responsible energyconsumption and energy efficiency. Measuressuch as improved insulation and double glazing willsignificantly improve energy consumption. Betterenergy efficiency makes it possible to meetelectricity demand with sustainable solar power,using significantly lower coverage areas than thoseshown in Table 4.

“Solar energymust beimplementedtogether withresponsibleenergyconsumptionand energyefficiency.”

City, Country

Copenhagen, Denmark

Kuala Lumpur, Malaysia

London, UK (2008)

Munich, Germany (2008)

New York, USA

Rome, Italy

Seoul, South-Korea

Sydney, Australia

Tokyo, Japan

Area of PVmodules

needed (m²)

33

15

24

25

45

14

16

30

20

AnnualConsumption

(kWh)

4,400

3,700

3,300

4,000

11,000

2,700

3,600

8,000

3,500

TABLE 4AVERAGE HOUSEHOLDCONSUMPTION AND PV COVERAGEAREA NEEDED TO MEET DEMANDIN NINE COUNTRIES

source: EPIA, IEA PVPS.

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Solar technology and induStry 2

18

2 Solar technologyand induStry

2.1. PV systems

The key parts of a solar energy generation system are:

• Photovoltaic modules to collect sunlight

• An inverter to transform direct current (DC) toalternate current (AC)

• A set of batteries for stand-alone PV systems

• Support structures to orient the PV modulestoward the Sun.

The system components, excluding the PVmodules, are referred to as the balance of system(BOS) components.

a. PV cells and modules

The solar cell is the basic unit of a PV system. PV cells are generally made either from:

• crystalline silicon, sliced from ingots or castings,

• from grown ribbons or

• from alternative semiconductor materialsdeposited in thin layers on a low-cost backing(Thin Film).

Cells are connected together to form larger unitscalled modules. Thin sheets of EVA* or PVB** areused to bind cells together and to provide weatherprotection. The modules are normally enclosedbetween a transparent cover (usually glass) and aweatherproof backing sheet (typically made from athin polymer). Modules can be framed for extramechanical strength and durability. Thin Filmmodules are usually encapsulated between twosheets of glass, so a frame is not needed.FIGURE 6

DIFFERENT CONFIGURATIONSOF SOLAR POWER SYSTEMS

POWER GRID

+ – + –

GRID-CONNECTED PV SYSTEM CONFIGURATION OFF-GRID PV SYSTEM CONFIGURATION

PHOTOVOLTAICMODULES

PHOTOVOLTAICMODULES

INVERTER CHARGE CONTROLLER

INVERTER

ELECTRICALAPPLIANCE

ELECTRICALAPPLIANCE

ELECTRICALAPPLIANCE

ELECTRICALAPPLIANCE

ELECTRICITYMETER

BATTERIES

source: EPIA.

* Ethyl Vinyl Acetate.** Polyvinyl Butyral.

19

Solartechnology and induStry

2

Modules can be connected to each other in series(known as an array) to increase the total voltageproduced by the system. The arrays are connectedin parallel to increase the system current.

The power generated by PV modules varies froma few watts (typically 20 to 60 Wp) up to 300 to350 Wp depending on module size and thetechnology used. Low wattage modules aretypically used for stand-alone applications wherepower demand is generally low.

Standard crystalline silicon modules contain about60 to 72 solar cells and have a nominal powerranging from 120 to 300 Wp depending on sizeand efficiency. Standard Thin Film modules havelower nominal power (60 to 120 Wp) and their sizeis generally smaller. Modules can be sizedaccording to the site where they will be placed andinstalled quickly. They are robust, reliable andweatherproof. Module producers usually guaranteea power output of 80% of the Wp, even after 20 to25 years of use. Module lifetime is typicallyconsidered of 25 years, although it can easilyreach over 30 years.

b. Inverters

Inverters convert the DC power generated by a PVmodule to AC power. This makes the systemcompatible with the electricity distribution networkand most common electrical appliances. Aninverter is essential for grid-connected PVsystems. Inverters are offered in a wide range ofpower classes ranging from a few hundred watts(normally for stand-alone systems), to several kW(the most frequently used range) and even up to2,000 kW central inverters for large-scale systems.

c. Batteries and charge controllers

Stand-alone PV systems require a battery to storeenergy for future use. Lead acid batteries aretypically used. New high-quality batteries, designedspecifically for solar applications and with a life ofup to 15 years, are now available. The actuallifetime of a battery depends on how it is managed.

Batteries are connected to the PV array via acharge controller. The charge controller protectsthe battery from overcharging or discharging. It canalso provide information about the state of thesystem or enable metering and payment for theelectricity used.

Antireflection coatingbased on nitride tooptimize light penetrationinto solar cell.

PV modules integratedinto flat roof.

Manufacturing process

The manufacturing process of c-Si modules takesfive steps (see Figure 8).

20

2.2. Photovoltaic technologies

PV technologies are classified as first, second orthird generation. First generation technology is thebasic crystalline silicon (c-Si). Second generationincludes Thin Film technologies, while thirdgeneration includes concentrator photovoltaics,organics, and other technologies that have not yetbeen commercialised at large scale.

a. Crystalline silicon technology

Crystalline silicon cells are made from thin slices(wafers) cut from a single crystal or a block of silicon.

The type of crystalline cell produced depends onhow the wafers are made. The main types ofcrystalline cells are:

• Mono crystalline (mc-Si):

• Polycrystalline or multi crystalline (pc-Si)

• Ribbon and sheet-defined film growth(ribbon/sheet c-Si).

The single crystal method provides higherefficiency, and therefore higher power generation.Crystalline silicon is the most common and maturetechnology representing about 80% of the markettoday. Cells turn between 14 and 22% of thesunlight that reaches them into electricity. For c-Simodules, efficiency ranges between 12 and 19%(see Table 7).

Individual solar cells range from 1 to 15 cm across(0.4 to 6 inches). However, the most common cellsare 12.7 x 12.7 cm (5 x 5 inches) or 15 x 15 cm(6 x 6 inches) and produce 3 to 4.5 W – a verysmall amount of power. A standard c-Si module ismade up of about 60 to 72 solar cells and has anominal power ranging from 120 to 300 Wpdepending on size and efficiency.

The typical module size is 1.4 to 1.7 m² althoughlarger modules are also manufactured (up to 2.5m²). These are typically utilised for BIPV applications.

FIGURE 7CRYSTALLINE SILICON CELLS

Polycrystalline silicon PV cell.

Monocrystalline solar cell.

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Solartechnology and induStry

2

b. Creation of the potential difference (p-n) junction: A potential difference between two points gives rise to an electromotive force that pushes electrons from one point to the other. A solar wafer needs to have a p-n between the surface and the bottom of the cell. This step takes place in a diffusion oven.

c. Deposition of an anti-reflective coating:The coating enables the cell to absorb the maximum amount of light. It also gives cells their typical blue colour.

d. Metallisation: Metal contacts (usually silver) are added to the cell so the electrons can be transported to the external circuit. A thin metal grid, known as a finger, is attached to the front surfaceof the cell. Wider metal strips, known as busbars, are connected to the front and back surfaces of the cell.

The fingers collect the current generated by the cell, while the busbars connect the fingers and provide external connection points to other cells. The entire back surface of the cell is coated with aluminium to create a reflective inner surface.

5. Connect and coat the cells to form a module.

The cells are effectively sandwiched betweenlayers of coating material to protect them fromthe environment and breakage. Transparentglass is used for the front, while a weatherproofbacking (typically a thin polymer) is applied to theback of the module. The cover is attached usingthin sheets of EVA or PVB. Frames can be placedaround the modules to increase their strength.For some specific applications, such asintegration into a building, the back of the moduleis also made of glass to allow light through.

The steps, in detail are:

1. Convert the metallurgical silicon into high puritypolysilicon (known as solar grade silicon).

Silicon is the second most abundant elementin the Earth's crust after oxygen. It is found inquartz or sand. Metallurgical silicon is 98 to99% pure. The polysilicon required for solarcells can be up to 99.999999% pure. The mostcommon process for converting raw silicon intosolar grade silicon is the Siemens process.

2. Form the ingots.

The polysilicon is melted in large quartzcrucibles, and then cooled to form a long solidblock called an ingot. The type of wafer that willbe cut from the ingot depends on the processused to form the ingot. Monocrystalline wafershave a regular, perfectly-ordered crystalstructure, while multicrystalline wafers have anunstructured group of crystals. The level ofstructure affects how electrons move over thesurface of the cell.

3. Slice the ingot or block into wafers.

A wire saw is used to slice the wafer from theingot or block. The saw is about the samethickness as the wafer. This method of slicingproduces significant wastage – up to 40% ofthe silicon (known as kerf loss). Using a lasercutter reduces kerf loss; however, this can onlybe done on ingots formed by string ribbon orsheet/edge-defined film growth.

4. Transform the wafer into a solar cell.

The cell is the unit that produces the electricity.It is created using four main steps:

a. Surface treatment: The wafer’s top layer is removed to make it perfectly flat.

“Silicon is thesecond mostabundantelement inthe earth’scrust afteroxygen.”

FIGURE 8CRYSTALLINE SILICONMANUFACTURING PROCESS

SILICON INGOTS WAFER CELL MODULE

1 2 3 4 5

22

Alternative cell manufacturing technologiesAdvances and alternatives in cell manufacturingmethods are producing cells with higher levels ofefficiency. Some of the most promising emergingtechnologies include:

• Buried contacts:

Instead of placing the fingers and busbars onthe front of the cell, they are buried in a laser-cut groove inside the solar cell. The changemakes the cell surface area larger, enabling itto absorb more sunlight.

• Back contact cells:

The front contact of the cell is moved to theback. The cell’s surface area is increased andshadowing losses are reduced. This technologycurrently provides the highest commercial cell-efficiency available on the market.

• Pluto™:

Developed by Suntech, Pluto™ features aunique texturing process that improves sunlightabsorption, even in low and indirect light.

• HIT™ (Heterojunction with Intrinsic Thin Layer):

Developed by Sanyo Electrics, the HIT™ cellconsists of a thin, single-crystal wafersandwiched between ultra-thin amorphoussilicon (a-Si) layers. Using both amorphous andsingle crystal silicon improves efficiency.

b. Thin Films

Thin Film modules are constructed by depositingextremely thin layers of photosensitive material onto a low-cost backing such as glass, stainless steelor plastic. Once the deposited material is attachedto the backing, it is laser-cut into multiple thin cells.

Thin Film modules are normally enclosed betweentwo layers of glass and are frameless. If thephotosensitive material has been deposited on a thinplastic film, the module is flexible. This createsopportunities to integrate solar power generation intothe fabric of a building or end-consumer applications.

Four types of Thin Film modules are commercially available:

1. Amorphous silicon (a-Si)

The semiconductor layer is only about 1 µmthick. Amorphous silicon can absorb moresunlight than c-Si structures. However, a lowerflow of electrons is generated which leads toefficiencies that are currently in the range of 4to 8%. With this technology the absorptionmaterial can be deposited onto very largesubstrates (up to 5.7 m² on glass), reducingmanufacturing costs. An increasing number ofcompanies are developing light, flexible a-Simodules perfectly suitable for flat and curvedindustrial roofs.

2. Multi-junction thin silicon film (a-Si/µc-Si)

This consists of an a-Si cell with additional layersof a-Si and micro-crystalline silicon (µc-Si)applied onto the substrate. The µc-Si layerabsorbs more light from the red and near-infrared part of the light spectrum. This increasesefficiency by up to 10%. The thickness of the µc-Si layer is in the order of 3 µm, making the cellsthicker but also more stable. The currentmaximum substrate size for this technology is1.4 m² which avoids instability.

Technology

Mono (back contact)

HIT™

Mono (Pluto™)

Nanoparticle ink

Mono

Commercialisedcell efficiency

record

22%

19.8%

19%

18.9%

18.5%

TABLE 5COMMERCIALISED CELLEFFICIENCY RECORDS

source: Greentech Media, July 2010.

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Solartechnology and induStry

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3. Cadmium telluride (CdTe)

CdTe Thin Films cost less to manufacture andhave a module efficiency of up to 11%. Thismakes it the most economical Thin Filmtechnology currently available.

The two main raw materials are cadmium andtellurium. Cadmium is a by-product of zincmining. Tellurium is a by-product of copperprocessing. It is produced in far lower quantitiesthan cadmium. Availability in the long-term maydepend on whether the copper industry canoptimise extraction, refining and recycling yields.

4. Copper, indium, gallium, (di)selenide/(di)sulphide (CIGS) and copper, indium,(di)selenide/(di)sulphide (CIS)

CIGS and CIS offer the highest efficiencies ofall Thin Film technologies. Efficiencies of 20%have been achieved in the laboratory, close tothe levels achieved with c-Si cells. Themanufacturing process is more complex andless standardised than for other types of cells.This tends to increase manufacturing costs.Current module efficiencies are in the range of 7 to 12%.

There are no long-term availability issues forselenium and gallium, Indium is available inlimited quantities but they are no signs of anincoming shortage. While there is a lot of indiumin tin and tungsten ores, extracting it could drivethe prices higher. A number of industriescompete for the indium resources: the liquidcrystal display (LCD) industry currently accountsfor 85% of demand. It is highly likely that indiumprices will remain high in the coming years.

Typical module power ranges from 60 to 350 Wdepending on the substrate size and efficiency.There is no common industry agreement onoptimal module size for Thin-Film technologies. Asa result they vary from 0.6 to 1.0 m² for CIGS andCdTe, to 1.4 to 5.7 m² for silicon-based Thin Films.Very large modules are of great interest to thebuilding sector as they offer efficiencies in terms ofhandling and price.

FIGURE 9THIN FILM MODULE

Thin Film CdTe Module.

Thin Filmtechnology

a-Si

a-Si/µ-Si

CdTe

CIGS/CIS

Record Labefficiency

10.4%

13.2%

16.5%

20.3%

Recordcommercial

module efficiency

7.1%

10%

11.2%

12.1%

TABLE 6SUMMARY OF RECORDEFFICIENCIES OF THINFILM TECHNOLOGIES

source: A. Green et al., 20103, Lux Research Inc4,EPIA research

24

Thin Film manufacturing processes

Thin Films are manufactured in five common steps:

1. A large sheet of substrate is produced. Typicallythis is made of glass although other materialssuch as flexible steel, plastic or aluminium arealso utilised.

2. The substrate is coated with a transparentconducting layer (TCO).

3. Semiconductor material (absorber) is depositedonto the substrate or superstrate. This layer canbe deposited using many different techniques.Chemical and physical vapour depositions arethe most common. For some technologies(usually CIGS, CIS and CdTe), a cadmiumsulphide (CdS) layer is also applied to thesubstrate to increase light absorption.

4. The metallic contact strips on the back areapplied using laser scribing or traditionalscreen-printing techniques. The back contactstrips enable the modules to be connected.

5. The entire module is enclosed in a glass-polymer casing.

For flexible substrates, the manufacturing process usesthe roll-to-roll (R2R) technique. R2R enablesmanufacturers to create solar cells on a roll of flexibleplastic or metal foil. Using R2R has the potential toreduce production time, and both manufacturing andtransport costs. R2R can be used at much lowertemperatures in smaller, non-sterile production facilities.

c. Concentrator photovoltaics

Concentrator photovoltaics (CPV) utilise lenses tofocus sunlight on to solar cells. The cells are madefrom very small amounts of highly efficient, butexpensive, semi-conducting PV material. The aim

is to collect as much sunlight as possible. CPVcells can be based on silicon or III-V compounds(generally gallium arsenide or GaA).

CPV systems use only direct irradiation.* They aremost efficient in very sunny areas which have highamounts of direct irradiation.

The concentrating intensity ranges from a factor of 2to 100 suns (low concentration) up to 1000 suns(high concentration). Commercial module efficienciesof 20 to 25% have been obtained for silicon basedcells. Efficiencies of 25 to 30% have been achievedwith GaAs, although cell efficiencies well above 40%have been achieved in the laboratory.

The modules have precise and accurate sets oflenses which need to be permanently orientedtowards the Sun. This is achieved through the useof a double-axis tracking system. Low concentrationPV can be also used with one single-axis trackingsystem and a less complex set of lenses.

FIGURE 10 STEPS IN MAKING THINFILM SOLAR CELLS

FRONT COVER 1

TCO

2ABSORBER

3BACKCONTACT 4

BACK COVER 5

SUPERSTRATE TYPE e.g. a-Si /𝜇-Si /CdTe

SUBSTRATE TYPE e.g. CiS

FIGURE 11 CONCENTRATOR PVMODULES

Concentrator Photovoltaicsinstalled on trackers to follow the sun.

* Sunlight consists of both direct and diffuse irradiation. Diffuseirradiation occurs because of the reflection and refraction ofsunlight when it comes into contact with the Earth’s atmosphere,clouds and the ground.

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Solartechnology and induStry

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d. Third generation photovoltaics

After more than 20 years of research anddevelopment, third generation solar devices arebeginning to emerge in the marketplace.

Many of the new technologies are very promising.One exciting development is organic PV cells.These include both fully organic PV (OPV) solar cellsand the hybrid dye-sensitised solar cells (DSSC).

Suppliers of OPV produced 5 MW of solar cells in2009. They are moving towards fullcommercialisation and have announced plans toincrease production to more than 1 GW by 2012.Current cell efficiencies are about 6% for very smallareas and below 4% for larger areas.

Manufacturers of DSSC produced about 30 MW ofsolar cells in 2009. By 2012, 200 MW are expectedto be produced. In 2009, some low-powerapplications were already commercially available.Efficiencies achieved at the lab across a very smallarea are in the range of 8 to 12%. Commercialapplications still have efficiency below 4%.

For both technologies, manufacturing costs isconstantly decreasing and is expected to reach0.50€/W by 2020. This is enabled by the use ofthe R2R manufacturing process and standardprinting technologies. The major challenges for thissector are the low device efficiency and theirinstability in the long-term.

Third generation technologies that are beginning toreach the market are called “emerging” and can beclassified as:

• Advanced inorganic Thin Films such as sphericalCIS and Thin-Film polycrystalline silicon solar cells.

• Organic solar cells which include both fullyorganic and hybrid dye-sensitised solar cells.

• Thermo-photovoltaic (TPV) low band-gap cellswhich can be used in combined heat andpower (CHP) systems.

Third generation PV products have a significantcompetitive advantage in consumer applicationsbecause of the substrate flexibility and ability toperform in dim or variable lighting conditions. Possibleapplication areas include low-power consumerelectronics (such as mobile phone rechargers,lighting applications and self-powered displays),outdoor recreational applications, and BIPV.

In addition to the emerging third generation PV technologies mentioned, a number of noveltechnologies are also under development:

• Active layers can be created by introducingquantum dots or nanotechnology particles. This technology is likely to be used inconcentrator devices.

• Tailoring the solar spectrum to wavelengths withmaximum collection efficiency or increasing theabsorption level of the solar cell. Theseadjustments can be applied to all existing solarcell technologies.

Table 7 shows the efficiency ranges of currentlyavailable commercial technologies. The area that needs to be covered to generate 1 kWp isalso shown.

“Thirdgenerationsolar devicesare beginningto emerge inthe market-place.”

Technology

Cell efficiency

Module efficiency

Area needed per

KW (for modules)

(a-Si)

4-8%

~15m2

(CdTe)

10-11%

~10m2

CI(G)S

7-12%

~10m2

a-Si/µc-Si

7-9%

~12m2

Dye s.cells

2-4%

Mono

16-22%

13-19%

~7m2

Multi

14-18%

11-15%

~8m2

III-V Multi-junction

30-38%

~25%

Thin Film CPVCrystalline Silicon

Commercial Module Efficiency

TABLE 7OVERVIEW OF COMMERCIALPV TECHNOLOGIES

source: EPIA 2010. Photon international, March 2010, EPIA analysis. Efficiency based on Standard Test conditions.

26

e. Historical and future evolution

Crystalline silicon technologies have dominated themarket for the last 30 years. Amorphous silicon (a-Si) has been the technology most used forconsumer applications (e.g. calculators, solarwatches) due to its lower manufacturing cost whilec-Si technologies have been used mainly in bothstand-alone and on-grid systems.

Within the c-Si technologies, mono- and multi-crystalline cells are produced in fairly equalproportion. However, multi-crystalline cells aregaining market share. Ribbon c-Si represents lessthan 5% of the market.

While a-Si has been the preferred clear Thin-Filmtechnology used over the past three decades, itsmarket share has decreased significantlycompared to more advanced and competitivetechnologies. For example, CdTe has grown froma 2% market share in 2005 to 13% in 2010.

Technologies such as Concentrator PV (CPV),organics and dye-sensitised solar cells arebeginning to enter the market. They are expectedto achieve significant market share in the next fewyears, capturing around 5% of the market by 2020.

EPIA expects that by 2020 silicon wafer-basedtechnologies will account for about 61% of sales,while Thin Films will account for around 33%. CPVand emerging technologies will account for theremaining 6%.

1980

100

90

80

70

60

50

40

30

20

10

0

1985

1990

1995

2000

2005

2010

2015

2020

EMERGING & CPV

CIGS

CdTe

a-Si

c-Si

FIGURE 12HISTORICAL EVOLUTION OFTECHNOLOGY MARKET SHARE AND FUTURE TRENDS%

source: Historical data (until 2009) basedon Navigant Consulting. Estimations basedon EPIA analysis.

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Solartechnology and induStry

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2.3. The PV value chain

The PV value chain is typically divided into anumber of upstream and downstream activities.

a. The upstream part of the value chain

Upstream activities include all steps from themanufacturing of equipment and materials to theproduction of modules, inverters and other balanceof system (BOS) elements. Supply of certainmaterials and equipment is concentrated in thehands of a few very large players. For example:

• About 75 companies are active in polysiliconproduction. However, in 2009, more than 90%of the total supply was manufactured by sevenmajor players from Europe, the USA andJapan. Nowadays many Chinese companiesare ramping-up capacity and are expected toaccount for a larger share of the polysiliconmarket over the next few years5.

• The market is more segmented andcompetitive in the area of wafer and cellmanufacturing. More than 200 companies areactive in this sector. Around 1,000 companiesproduced c-Si modules in 2010.

• Also with respect to inverter production, the top tencompanies produce more than 80% of theinverters sold on the market, even though there aremore than 300 companies active in this segment.

• In the case of Thin Film module manufacturing,about 160 companies are active. About 130 ofthese companies produce silicon-based ThinFilms. Around 30 produce CIGS/CIS Thin Films,while a handful of companies are active in CdTe.

• There are currently more than 50 companiesthat offer turnkey c-Si production lines. Lessthan 30 manufacturers provide the PV industrywith Thin Film production lines6.

TABLE 9NUMBER OF COMPANIES WORLD-WIDE IN THE CRYSTALLINESILICON VALUE CHAIN2009

SILICON INGOTS WAFERS CELLS MODULES

2009

Number ofcompanies:

Productioncapacity:

Effectiveproduction:

75

130,000 TONNES

90,000 TONNES

208

15,000 MW

10,000 MW

239

18,000 MW

9,000 MW

988

19,000 MW

7,000 MW

Number ofcompanies (as of 2009)

Production in 2009

CI(G)S

30

< 200

MW

a-Si/µ-Si

< 400

MW

a-Si

< 300

MW

CdTe

4

1,100

MW

131

TABLE 8NUMBER OF COMPANIESWORLD-WIDE IN THE THINFILM VALUE CHAIN

source: Energy Focus, Photon, JRC and EPIA.

source: ENergy Focus, Photon, JRC and EPIA.

28

b. The downstream part of the value chain

The downstream part of the value chain includes:

• Wholesalers who function as intermediariesbetween the manufacturers and the installer orend customer.

• System developers who offer their services inbuilding turnkey PV installations.

• Owners of PV installations that sell their powerto the grid.

Many small to medium enterprises (SMEs) areinvolved in these activities and most are locallyorganised. As such, this part of the value chain isvery fragmented and difficult to track.

The engineering, procurement and construction(EPC) companies involved in the development ofPV systems are experienced in obtaining finance,selecting the correct components and advising ona suitable location and system design. Most arefamiliar with local legal, administrative and gridconnection requirements. They can guide the PVsystem owner through the different types of supportmechanisms. EPC companies also physically installthe PV system using either internal personnel orqualified subcontractors. As a result of the latesttechnological developments in BIPV and CPV,some developers have developed specificexpertise and are now specialising in these areas.

PV systems have a typical lifespan of at least 25years. At the end of its life, the system isdecommissioned and the modules are recycled. InEurope, the PV CYCLE association established avoluntary take back scheme with established alreadya large number of collection points in different EUcountries where PV modules are collected are sentto specialised PV recycling facilities for recycling. Therecycled materials (such as glass, aluminium,semiconductor materials, ...) can then be re-usedfor the production of PV or other products. For moreinformation about PV CYCLE, see Solar benefits andsustainability in part 67.

c. Consolidation trends in the solar industry

For many years, most companies have grown byspecialising in a single activity within the value chain(especially in the case of c-Si technologies). These

companies are known as “pure players”. However,there has been an increasing tendency to integrateadditional production steps into the samecompany. Known as “integrated players”, thesecompanies cover a number of activities rangingfrom silicon to module production. Companies thatcover all steps in the process are known as “fullyintegrated players”. Both approaches presentbenefits and drawbacks. On the one hand, the“pure players” may be more competitive in theircore activity, but they can be highly dependent onstandardisation efforts and their suppliers. The“integrated players” on the other hand have moresecurity over their supply chain and are generallymore flexible financially. However, their researchand development expenditure cannot be affectedto one specific part of the value chain.

While some of the top polysilicon producers arestill pure players, many are also moving into thewafer production business. Most cellmanufacturers secure sales through theproduction of modules. Today, many large c-Si PVcompanies are integrated players and some have,or intend to, become fully integrated. The Thin Filmmanufacturing sector is not segmented to thesame extent as the entire manufacturing processis normally carried out at a single facility.

Integration does not only occur in the upstream partof the value chain. About 30% of modulemanufacturers are currently active in thedevelopment of complete PV systems.* Moreover,some system developers are also starting to ownsystems and sell electricity to grid operators. This isknown as the utility concept and the business modelis gaining support. This is especially true in the US,where an increasing number of module producersare entering the electricity generation market.

In recent years there have been a number ofmergers and acquisitions amongst PV companies.A total of 61 such transactions were reported inthe solar industry between July 2008 and March20098. This consolidation is likely to end thecurrent fragmentation of the solar PV market andfacilitate the emergence of larger industry players.Companies having large production capacities attheir disposal will benefit from the consequenteconomies of scale. This will result into a furtherdecrease of the manufacturing costs.

“Theconsolidationof the PVsector is likely to endthe currentfragmentationand facilitatethe emergenceof largerindustryplayers.”

* This calculation is based on the membership of EPIA, which canbe considered is a representative sample of all the players in thePV industry.

29

Solar coSt and competitiveneSS: towardS grid parity 3

30

3. Solar coSt andcompetitiveneSS:towardS grid parity

The cost of PV systems has been constantlydecreasing over time. Grid parity (traditionallydefined as the point in time where the generationcost of solar PV electricity equals the cost ofconventional electricity sources) is alreadyachieved for some specific applications in someparts of the world. Competitiveness is just aroundthe corner.

This section outlines the factors that will affect thePV industry’s ability to achieve competitivenesswith conventional electricity producers and retailelectricity prices.

3.1. Price competitiveness of PV

a. PV module price

Over the past 30 years the PV industry hasachieved impressive price decreases. The price ofPV modules has reduced by 22% each time thecumulative installed capacity (in MW) has doubled(see Figure 13).

The decrease in manufacturing costs and retailprices of PV modules and systems (includingelectronics and safety devices, cabling, mountingstructures, and installation) have come as theindustry has gained from economies of scale andexperience. This has been brought about byextensive innovation, research, development andongoing political support for the development ofthe PV market.

“Over thepast 30 yearsthe PVindustry hasachievedimpressivepricedecreases.”

1 10 100 1,000 10,000 100,000

100

10

1

c-Si LOW

FIGURE 13PV MODULE PRICE EXPERIENCE CURVE US$/Wp & MW

c-Si HIGH

c-Si TREND

TF

TF TREND

source: Navigant Consulting, EPIA.

MW

(US$/Wp) 2010

price-experiencefactor of 22%

Large ground-mountedPV system in Spain.

Large ground-mountedPV system in Spain.

31

Solar coSt andcompetitiveneSS:towardS gridparity

3

b. PV system price

As explained above, the price of PV modules hasdecreased substantially over the past 30 years.The price of inverters has followed a similar pricelearning curve to that of PV modules. Prices forsome balance of systems (BOS) elements havenot decreased with the same pace. The price ofthe raw materials used in these elements (typicallycopper, steel and stainless steel) has been morevolatile. Installation costs have decreased atdifferent rates depending on the maturity of themarket and type of application. For example, somemounting structures designed for specific types ofinstallations (such as BIPV) can be installed in halfthe time it takes to install a more complex version.This of course lowers the total installation costs.

Reductions in prices for materials (such asmounting structures), cables, land use andinstallation account for much of the decrease inBOS costs. Another contributor to the decrease ofBOS and installation-related costs is the increasein efficiency at module level. More efficientmodules imply lower costs for balance of systemequipment, installation-related costs and land use.

Figure 14 shows as an example the price structureof PV systems for small rooftop (3 kWp)installations in mature markets. In only 5 years time,the share of the PV modules in the total systemprice has fallen from about 60-75% to as low as40-60%, depending on the technology. Theinverter accounts for roughly 10% of the totalsystem price. The cost of engineering andprocurement makes up about 7% of the totalsystem price. The remaining costs represent theother balance of system components and the costof installation.

The forecasts for prices of large PV systems aresummarised in Figure 15. In 2010, the rangerepresents prices for large systems in Germany.The rate at which PV system prices will decreasedepends on the installed PV capacity. By 2030prices could drop to between €0.70/Wp to€0.93/Wp. By 2050, the price could be even aslow as €0.56/Wp.

“By 2030prices coulddrop tobetween€0.70/Wp to€0.93/Wp.”

FIGURE 14COSTS OF PV SYSTEM ELEMENTS %

c-Si ROOFTOP

60%7%

10%

23%

MODULE PRICE

INVERTER PRICE

BOS+INSTALLATION

ENGINEERING & PROCUREMENT

source: EPIA, EuPD,Navigant Consulting, PhotonConsulting, SolarBuzz. note: Values based onmature markets.

TF ROOFTOP

51%7%

10%

32%

2010

2,500

2,800

1,439

1,843

914

1,297

782

1,067

702

935

650

857

609

800

583

763

563

734

3,000

2,500

2,000

1,500

1,000

500

0

2015

2020

2025

2030

2035

2040

2045

2050

ACCELERATED SCENARIO

PARADIGM SHIFT SCENARIO

FIGURE 15EVOLUTION OF PRICES OF LARGE PV SYSTEMS€/KWp

-56%

-63% -77%

-74%

source: Greenpeace/EPIASolar generation VI 2010.

32

c. PV electricity generation cost

The indicator used to compare the cost of PVelectricity with other sources of electricity generationis the cost per kilowatt hour (kWh). The LevelisedCost of Electricity (LCOE) is a measurement tool thatis used to compare different power generationplants. It covers all investment and operational costsover the system lifetime, including the fuelsconsumed and replacement of equipment.

Using LCOE makes it possible to compare a PVinstallation with a power plant utilising a gas ornuclear fuel source. Each system has very differentlifetimes and investment costs which are taken intoaccount for the LCOE calculation. The LCOE takesthis into account. Moreover, for PV systems, theLCOE considers the location of the system and theannual irradiation. For example, Scandinaviatypically receives 1,000 kWh/m² of sunlight. Insouthern Europe the irradiation can go over 1,900kWh/m², while in the Middle East and in sub-Saharan Africa sunlight irradiation can reach up to2,200 kWh/m².

Figure 16 shows current PV electricity generationcosts for large ground-mounted systems. The datais based on the most competitive turnkey systemprice and a typical system performance ratio (theamount of kWh that can be produced per kWpinstalled) of 85%.

For large ground-mounted systems, the generationcosts in 2010 range from around €0.29/kWh inthe north of Europe to €0.15/kWh in the south andas low as €0.12/kWh in the Middle East.

According to EPIA estimations those rates will fallsignificantly over the next decade. Expected generationcosts for large, ground-mounted PV systems in 2020are in the range of €0.07 to €0.17/kWh acrossEurope. In the sunniest Sunbelt countries the rate couldbe as low as €0.04/kWh by 2030.

EPIA forecasts that prices for residential PVsystems and the associated LCOE will alsodecrease strongly over the next 20 years.However, they will remain more expensive thanlarge ground-mounted systems.

“Expectedgenerationcosts forlarge,ground-mounted PVsystems in2020 are inthe range of€0.07 to€0.17/kWhacrossEurope.

source: Greenpeace/EPIA Solar generation VI 2010.

FIGURE 16LEVELISED COST OFELECTRICITY (LCOE)€/KWh

850

1,050

1,250

1,450

1,650

1,850

2,050

0.30

0.25

0.20

0.15

0.10

0.05

0

0.29

0.27

0.13

0.12

0.07

0.050.050.04

0.17

0.120.11

0.08

OPERATING HOURS kWh/kWp

€/kWh 2010

2020

2030

33

Solar coSt andcompetitiveneSS:towardS gridparity

3

d. Electricity price evolution

Costs for the electricity generated in existing gasand coal-fired power plants are constantly rising.This is a real driver for the full competitiveness ofPV. Energy prices are increasing in many regionsof the world due to the nature of the current energymix. The use of finite resources for powergeneration (such as oil, gas, coal and uranium), inaddition togrowing economic and environmentalcosts will lead to increased price for energygenerated from fossil and nuclear fuels.

An unfair advantage

Conventional electricity prices do not reflect actualproduction costs. Many governments stillsubsidise the coal industry and promote the useof locally-produced coal through specificincentives. The European Union invests more innuclear energy research (€540 million yearly inaverage over five years through the EURATOMtreaty) than in research for all renewable energysources, smart grids and energy efficiencymeasures combined (€335 million yearly inaverage over seven years through the Seventhframework program). Actually today in Europe,fossil fuels and nuclear power are still receiving fourtimes the level of subsidies that all types ofrenewable energies do9.*

Given the strong financial and political backing for conventional sources of electricity over several decades, it is reasonable to expectcontinuing financial support for renewable energysources, such as wind and solar, until they are fully competitive.

External costs of conventional electricity generation

The external costs to society incurred from burningfossil fuels or nuclear power generation are notcurrently included in most electricity prices. Thesecosts are both local and, in the case of climatechange, global. As there is uncertainty about themagnitude of these costs, they are difficult toquantify and include in the electricity prices.

The market price of CO2 certificates remains quitelow (around €14/tonne CO2 end of 2010)10 but isexpected to rise in the coming decades.

On the other side, the real cost of CO2

was calculated at €70/tonne CO2 from 2010 to 205011.

Other studies consider even higher CO2 costs, upto US$160/tonne CO212.

Taking a conservative approach, the cost ofcarbon dioxide emissions from fossil fuels couldbe in the range of US$10 to US$20/tonne CO2.PV reduces emissions of CO2 by an average of 0.6kg/kWh. The resulting average cost avoided forevery kWh produced by solar energy will thereforebe in the range of US$0.006 to US$0.012/kWh.

The Stern Review on the Economics of ClimateChange, published by the UK government in2006, concluded that any investment made nowto reduce CO2 emissions will be paid back in thefuture as the external costs of fossil fuelconsumption will be avoided.

“Conventionalelectricityprices do notreflect actualproductioncosts.”

PV power plant inDarro, Spain.

* Globally, the IEA has recently estimated fossil fuel subsidies atUS$312bn, The European Energy Association: EEA Technicalreport 1/2004 (the most recent figures for the EU (EU15)) putfossil fuel subsidies at €21.7bn compared to €5.3bn forrenewable energy.

34

PV generation cost is decreasing,electricity prices are increasing

In many countries with high electricity prices andhigh Sun irradiation, the competitiveness of PVfor residential systems could already be achievedwith low PV system costs and the simplificationof administrative procedures.

Figure 17 shows the historical development andfuture trends of retail electricity prices compared tothe cost of PV electricity. The upper and lower partsof the PV curve represent northern Europe andsouthern of Europe respectively. The utility pricesfor electricity are split into peak power prices(usually during the day) and bulk power. In southernEurope, solar electricity is already or will becomecost-competitive with peak power within the nextfew years. Areas with less irradiation, such ascentral Europe, will reach this point before 2020.The trend is similar for most regions world-wide.For example, in developing countries electricityprices are rising due to higher demand whereas PVelectricity generation cost is already low and PVoften more cost-competitive.

“In manycountries withhigh electricityprices andhigh sunirradiation, thecompetitive-ness of PV forresidentialconsumerscould alreadybe achievedwith low PV systemcosts and thesimplificationofadministrativeprocedures.”

1990 2000 2010 2020 2030 2040

1.0

0.7

0.6

0.4

0.2

0.0

FIGURE 17DEVELOPMENT OF UTILITY PRICES AND PVGENERATION COSTS €/KWh

PV GENERATION COST AT LOWEST PRICE

UTILITY PEAK POWER

UTILITY BULK POWER

*h/a: Hours of sun per annum. 900 h/a correspondsto northern countries of Europe. 1,800 h/acorresponds to southern countries of Europe.

900 h/a*: €0.32 kWh

1,800 h/a*:€0.16 kWh

source: EPIA.

35

Solar coSt andcompetitiveneSS:towardS gridparity

3

e. Market segments for PV

PV consumer applications do not benefit fromany support mechanism and have been on themarket for many years. They have already proventheir competitiveness. Consumer applicationsprovide improved convenience, and often replaceenvironmentally non friendly batteries.

Off-grid applications are already cost-competitive compared to diesel generators, which have high fuel costs, or the extension of the electricity grid, which requires a considerable investment.

Grid-connected applications are not yetcompetitive everywhere. A distinction must bemade between decentralised residentialapplications and the more centralised utility-scaleground-mounted systems.

Large utility-scale PV systems provide electricityat a price that cannot be directly compared withresidential electricity prices but with the cost ofconventional (centralised) sources of electricity. Theelectricity generated in a large PV system is notconsumed directly, but sold on the electricity spotmarket where it competes directly with other sourcesof electricity. The evolution of prices on the spotmarket is linked to supply and demand factors.These prices are also closely related to the energymix currently used for power generation.

The competitiveness of large-scale PV systems willthen be reached when the cumulative benefit ofselling PV electricity on spot markets matches thatof conventional electricity sources over the courseof a full year. In sunny countries, PV can competeduring the midday peak when gas powered plantsor specific peak-generation devices are used.Figure 18 shows three scenarios for thedeployment of PV electricity, the electricity demandand electricity spot price in Spain during thesummer. It clearly shows that PV produceselectricity during moments of peak demand whenthe spot prices are the highest.

Peak power demand

Electricity spot price

1 3 5 7 9 11 13 15 17 19 21 23 t(h)

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

MW

70

60

50

40

30

20

10

0

€/MWh

FIGURE 18PEAK LOAD DEMAND ANDELECTRICITY SPOT PRICEIN SPAIN ON 18 JULY 2007

PV INSTALLED: 20,000 MWp

PV INSTALLED: 10,000 MWp

PV INSTALLED: 3,137 MWp (REAL CAPACITY INSTALLED IN SPAIN IN 2008)

source: OMEL/UCTE. Sunrise project based onmeasured data.

36

For the residential segment, EUROSTATestimates electricity prices in the EU-27 were in therange of €0.09 and €0.27/kWh (including taxes)during the second half of 2010. This is lower thanthe cost of generating PV electricity. However, in2010 the average household electricity price inEurope was 5% higher than in the second half of2007. As a comparison, between 2007 and 2009,the cost of PV electricity dropped by almost 40%to an average of €0.22/kWh.

Care must be taken when comparing the cost ofPV electricity across larger regions as there mightbe huge differences between countries and evenwithin the same country. In some countries,electricity prices are more responsive to demandpeaks. In California, Japan and some EUcountries, electricity prices increase substantiallyduring the day. This is particularly true in thesummer, as demand for electricity is the highestduring this period. In other countries, the electricityprices are the highest during winter periods.

In California however where during the summerdays the electricity price is substantially higher thanduring winter, PV is already competitive duringthese summer peaks. The summer is also theperiod when the electricity output of PV systems isat its highest. PV therefore serves the market atexactly the point when demand is the greatest.Figure 19 shows the significant variation betweenregular and peak prices for household electricity inthe Californian market.

0 6 12 18 24 hours

60

40

20

0

FIGURE 19 RANGE OF HOUSEHOLDELECTRICITY PRICES IN CALIFORNIA$ct/kWh

summer

winter

Glass roof, a-siamorphous silicon thinfilm integrated in glass.

Workers installing PV modules.

LOW CONSUMPTION PERIOD

PEAK CONSUMPTION PERIOD

source: Hyde, BSW-Solar, 2006.

37

Solar coSt andcompetitiveneSS:towardS gridparity

3

3.2. Factors affecting PV system cost reduction

The solar industry is constantly innovating inorder to improve products efficiency and makematerials use more environmentally friendly.However, the cost of PV systems also needs tobe reduced to make them competitive withconventional sources of electricity. EPIA believesthis can be achieved through:

• Technological innovation

• Production optimisation

• Economies of scale

• Increased performance ratio of PV

• Extended lifetime of PV systems

• Development of standards and specifications.

a. Technological innovation

One of the main ways the industry can reducemanufacturing and electricity generation costs isthrough efficiency. When PV modules are moreefficient, they use less material (such as activelayers, aluminium frames, glass and othersubstrates). This requires less energy formanufacturing and also lowers the balance of

system (BOS) costs. With higher-efficiencymodules, less surface area is needed. Thisreduces the need for mounting structures, cables,and other components. All of these savings affectthe final generation cost.

However, efficiency is not the only factor that needsto be studied. The PV sector has a primary goal tointroduce more environmentally friendly materials toreplace scarce resources such as silver, indiumand tellurium, and materials such as lead andcadmium. Lead-free solar cells are already availablein the market. However, a number of manufacturersclaim that by 2012 the cells are expected to belead-free without performance losses. Alternativesto silver will be on the market by 2013 to 201513.

Another key area of research aims to reducematerial usage and energy requirements. The PVsector is working to reduce costs and energypayback times by using thinner wafers (see Table9), more efficient wafers, and polysilicon substitutes(for example, upgraded metallurgical silicon). In thefield of Thin Film technologies the top priorities areto increase the substrate areas and depositionsspeeds while keeping material uniformity.

“The cost ofPV systemsneeds to bereduced tomake themcompetitivewithconventionalsources ofelectricity.”

source: IEA PVPS.

2008 2020 2030

40

30

20

10

0

FIGURE 20 PHOTOVOLTAICTECHNOLOGY STATUS AND PROSPECTS %

Efficiency rates of industrially

manufactured module/product

III Emerging tech

nologies

and novel con

cepts

I Crystalline silicon technolog

ies: single crystaline,

multi crystaline, ribbon

II Thin Film technologies: cadm

ium-telluride, copper indium

,

diselenide/disulphide and re

lated II-VI compounds, Thin

Film silicon.

Advanced inorganic

Thin-Film technologies

Organic solar cells

Quantum wells

, up-down con

verters, interm

ediate

band gaps, pla

smonics, therm

o-photovoltaics

etcIV Concentrator p

hotovoltaics

38

c. Economies of scale

As with all manufacturing industries, producingmore products lowers the cost per unit.Economies of scale can be achieved at thefollowing supply and production stages:

• Bulk buying of raw materials

• Obtaining more favourable interest rates for financing

• Efficient marketing.

Ten years ago, cell and module production plantscould remain viable by producing enough solarmodules to generate just a few MW of power eachyear. Today’s market leaders have plants withcapacity above 1 GW, several hundred times thana decade ago. Capacity increases, combined withtechnological innovation and manufacturingoptimisation, have radically reduced the cost perunit. The decrease is approximately 22% each timethe production output is doubled (see Figures 13and 22).

d. Increased performance ratio of PV systems

The cost per kWh is linked to PV system qualityand reflected in its performance ratio (the amountof electricity generated by the module comparedto the electricity measured on the AC side of themeter). The lower the losses between the modulesand the point at which the system feeds into thegrid, the higher the performance ratio. Typically,system performance ratios are between 80 and85%. If losses can be reduced further, the cost per

b. Production optimisation

As companies scale-up production, they use moreautomation and larger line capacities. Improvedproduction processes can also reduce waferbreakage and line downtime (periods of time whenthe production line is stopped for maintenance oroptimisation). Production efficiency improvementsenable the industry to reduce the costs of solarpower modules.

“Capacityincreases,combinedwithtechnologicalinnovationandmanufacturingoptimisation,have radicallyreduced the cost per unit.”

Wafer thickness and dimension

A good example of technology evolution is the wafer dimension. The method of producing thewafers needs to be modified so that thinner and larger wafers can be handled. This requireschanges to the cell process and the technology used to build the module. For example, thecontacts will probably need to be moved to the back of the cell. Larger solar cells requiremodifications to other system components such as the inverter.

Wafer thickness is expected to be reduced from 180 to 200 µm today, to less than 100 µm by2020. Reducing wafer thickness and kerf losses also reduces silicon usage. Currently solar cellmanufacturing techniques use about 7 g/W of silicon. This could drop to less than 3 g/W by 2020 (see Figure 21). Larger wafer sizes are expected from about 2015.

1990

400

360

320

280

240

200

160

120

80

40

18

16

14

12

10

8

6

4

2

0

2004

2006

2008

2010

2012

2014

2016

2018

2020

FIGURE 21 c-Si SOLAR CELLDEVELOPMENTwafer thickness in µm &silicon usage in g/Wp

source: EU PV Technology Platform StrategicResearch Agenda, C-Si Roadmap ITPV, EPIAroadmap 2004.

wafer thickness (µm) silico

n usage (g

/Wp)

39

Solar coSt andcompetitiveneSS:towardS gridparity

3

kWh can be lowered. Monitoring of systemsenables manufacturers and installers to quicklydetect faults and unexpected system behaviour (forexample, due to unexpected shadows). This helpsto maintain high performance ratios of PV systems.

e. Extended life of PV systems

Extending the lifetime of a PV system increasesoverall electrical output and improves the cost perkWh. Most producers give module performancewarranties for 25 years, and this is now consideredthe minimum lifetime for a PV module.

The component that affects product lifetime themost is the encapsulating material. Intenseresearch is being carried out in this field. However,the industry is cautious about introducingsubstitute materials because they need to betested over the long-term. Today, PV modules arebeing produced with lifetimes of at least 25 years.The target is to reach lifetimes of 40 years by 2020(see Table 10).

“When widelyaccepted bythe industrystandards,theycontribute toreduce costsin design,productionanddeployment.”

10 100 1,000 10,000

3.5

3

2.5

2

1.5

1

0.5

0

FIGURE 22COST POTENTIAL FOR THINFILM TECHNOLOGIES BASEDON PRODUCTION VOLUMEAND MODULE EFFICIENCY €/Wp

source: EU PV Technology Platform.

manufacturing capacity [MW/annum]logarithmic scale

scaling volume

further scalingstandardizationinnovations

direct manufacturing cost [€/Wp]

Turnkey price large systems (€/Wp)*

PV electricity generation cost in Southern EU (€/kWh)**

Typical PV module efficiency range (%)

Inverter lifetime (years)

Module lifetime (years)

Energy payback time (years)

Cost of PV + small-scale storage (€/kWh) in Southern EU (grid-connected)***

Crystalline siliconThin FilmsConcentrators

2010

2.5-3.5

0.14-0.20

15-19%

6-12%

20-25%

15

25-30

1-2

0.35

2007

5

0.30-0.60

13-18%

5-11%

20%

10

20-25

2-3

-

Solar Europe Industry Initiative: PV technologyroadmap for commercial technologies 2015

2

0.10-0.17

16-21%

8-14%

25-30%

20

30-35

1

0.22

2020

1.5

0.07-0.12

18-23%

10-16%

30-35%

>25

35-40

0.5

<0.15

TABLE 10PV TECHNOLOGY – 10-YEAR OBJECTIVES

note: Numbers and ranges are indicative because of the spread in technologies, system types and policy frameworks.* The price of the system does not only depend on the technology improvement but also on the maturity of the market (which implies industry infrastructure as well as administrative costs).** LCOE varies with financing cost and location. Southern EU locations consideredhere range from 1,500 (e.g. Toulouse) to 2,000 kWh/m² per year (e.g. Siracusa).*** Estimated figures based on EUROBAT roadmaps.

source: Solar Europe Industry Initiative Implementation Plan 2010-2012, Strategic Research Agenda.

40

f. Development of standards and specifications

The development of standards and consistenttechnical specifications helps manufacturers towork towards common goals. When widelyaccepted by the industry standards, theycontribute to reduce costs in design, productionand deployment. Standards also foster fair andtransparent competition as all actors in the marketmust play by the same rules.

The industry targets for PV technologydevelopment in the period 2010 to 2020 aresummarised in Table 10 and Figure 20.

g. Next generation technologies

Next generation photovoltaics present the greatestpotential in cost reduction. The main researchactivities in this field concentrate on increasingstability over the time and increasing the solar cellarea. The industry targets for PV technologydevelopment of next generation technologies inthe period 2010 to 2020 are summarised in Table11 and Figure 20.

“NextgenerationPhotovoltaicpresent thegreatestpotential incostreduction.”

Commercial module cost for emerging technologies* (€/Wp)

Typical PV module efficiency range (%)

Performance stability (years)

Emerging technologies*

Novel technologies**

2010

N.A.

<7-12%

Lab-scale***

<5%

Pre-Commercial****

N.A

<5

Solar Europe Industry Initiative: PV technologyroadmap for next generation technologies 2015

N.A

10-15%

Lab-scale***

<10%

Pre-Commercial****

N.A.

5-15

2020

0,5-0,8

>10%

Commercial*****

>25%

>15

TABLE 11MAJOR 10-YEAR OBJECTIVES AND MILESTONES FOR EMERGING AND NOVEL TECHNOLOGIES

note: Numbers and ranges are indicative because of the spread in technologies, system types and policy frameworks.* Emerging technologies include organic photovoltaics, dye-sentisised solar cells and advanced inorganic Thin Film technologies.** Novel technologies include quantum technologies and technologies using nanoparticles.*** Lab-scale: Cell Area below 10cm².**** Pre-commercial: Sub-module area (combination of ~10 cells) below 0.1m² for consumer application.***** Commercial: real scale module size >0.5m².

source: Solar Europe Industry Initiative Implementation Plan 2010-2012, Strategic Research Agenda.

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Solar coSt andcompetitiveneSS:towardS gridparity

3

3.3. PV in electricity networks and energy markets

With the development of on-grid systems, theintegration of PV in electricity networks and energymarkets has become a major challenge. Thisintegration brings both benefits and issues for thePV sector.

a. High penetration of PV in the grids

In a typical electricity grid, electricity flows from thegeneration plants to the consumption devices via adistribution network. Electricity can also betransported between different areas to meet demand.

With small amounts of PV connected to the grid,most of the electricity produced is consumed atthe site or in the immediate neighbourhood. Asmore PV electricity is added to the system, thetransport network will also be used.

A recent study14 has evaluated how much PV canbe integrated into distribution networks withoutchanging the network topology. The study foundthat Germany, which by end 2010 had more than16,000 MW of PV electricity integrated into itsnetwork, is still a long way from exceeding gridlimitations. Of course, local bottlenecks exist andthe number will rise with the increasing penetrationbut this is not the general case. The studyrecommends that PV could account for up to 20%of supply without affecting the grid, under sometechnical developments.

Managing variability

Electricity network managers must ensure that thevoltage and frequency of the electricity in the gridstays within predefined boundaries. To achievethis, managers must be able to forecast expectedproduction and consumption each day to enablethem to balance variations. PV electricity is, bynature, variable as it depends on Sun irradiation.For electricity network managers, predicting theavailable solar irradiation is generally quite accurateand easier than predicting wind patterns.

In large regions, the output from PV panels can bepredicted easily and the network manager canplan how to best balance power supply. Localvariability is smoothed out on the regional scale.

On an even larger scale, for example across acountry, integrating large amounts of PV electricityinto the grid requires network managers todispatch balancing power in time to meet demand.Recent studies confirm that including acombination of different renewable energy sourceson a large scale (such as across the EuropeanUnion) can compensate for intermittent input fromsolar and wind sources. This enables managers toprovide both peak load generation and alsomedium and base load. Network managers mustalso be able to dispatch part of the electricity loadthroughout the day (called Demand SideManagement) to cope with the extra electricitycoming from variable renewable sources.

“theintegration ofPV inelectricitynetworks andenergymarkets hasbecome amajorchallenge.”

42

Virtual power plants (VPP)

Millions of small electricity generation devices,such as PV panels, cannot be managed in thesame way as a handful of large power plants.The virtual power plant concept groups togetherlarge numbers of small- and medium-sized plantsin the grid management system. This enablesnetwork operators to easily manage the electricitycoming into the grid15.

source: www.solarserver.de/solarmagazin/anlagejanuar2008_e.html

FIGURE 23 PRINCIPLE OF A 100% RENEWABLE POWER SUPPLY SYSTEM

100

90

80

70

60

50

40

30

20

10

MW 0

Central control unit

Output

Output

Electricity demand

OutputOutput Adjustedoperatingschedules

Wind

Solar

Biogas Reservoir

Output

0000 0400 0800 1200 1600 2000 2400

TIME OF DAY

43

Solar coSt andcompetitiveneSS:towardS gridparity

3

b. From centralised to decentralisedenergy generation

In most developed countries electricity generationhas been mainly centralised. However, manycountries are now moving toward largelydecentralised electricity generation. With windturbines, small and medium biomass plants andsolar power plants, electricity can be produced ina large number of places anywhere on the network.

The decentralised model means that electricity gridoperators (DSO,* TSO**) must re-think how theyguarantee the quality of the electricity delivery. Thissection discusses the main areas that requireimprovement and development.

Peak load shaving

The daily electricity consumption curve has onepeak at midday (in sunny countries) andsometimes (mainly in northern countries) a secondpeak in the evening. The pattern depends onclimate conditions but the trend is clear. Figures24 and 25 show how PV can play a key role effecton the midday peak. Known as peak shaving, thetechnique reduces the high power demand on thenetwork at midday. Using storage systems, it isalso possible to move some of the electricityproduced during the day so the evening peak canalso be shaved.

From smart grids to e-mobility

New renewable energy sources, decentralisation,and new ways of consuming electricity whichmodify load patterns require us to re-think gridmanagement. The use of heat-pumps for heating(and cooling) and the future needs of electricvehicles (EVs) and petrol-hybrid electric vehicles(PHEVs) will require operators to improve their grids.

“Manycountries arenow movingtoward largelydecentralisedelectricitygeneration.”

00:00

06:00

12:00

18:00

24:00

FIGURE 25 PEAK SHAVING NORTHERNEUROPE WITH STORAGE

PV output

power dem

and

source: IEA-PVPS, Task 10.

ELECTRICITY DEMAND

ELECTRICITY TO BE SUPPLIED BY OTHER SOURCES THAN PV

PV electricity consumption

00:00

06:00

12:00

18:00

24:00

FIGURE 24 PEAK SHAVING NORTHERN EUROPE

source: IEA-PVPS, Task 10.

PV output

Peak power supply

ELECTRICITY DEMAND

ELECTRICITY TO BE SUPPLIED BY OTHER SOURCES THAN PV

power dem

and

time of day

time of day

* Distribution System Operator: the operator of the low and mediumvoltage electricity grid.

** Transport System Operator: the operator of the medium and highvoltage electricity grid.

44

Super grid

The intermittent nature of renewable energysources can be smoothed and balanced over largeregions. This requires the enhancement ofinterconnections between countries and globalmanagement of the grid. In this way, wind electricityfrom windy countries can be mixed and balancedwith solar electricity from sunny countries.

Smart grids

Smart grids are electricity grids that are moreresilient and better able to cope with large sharesof decentralised and intermittent energy sources.A better understanding of the demand and supplyof electricity, coupled with the ability to interveneat the consumer level, enables supply to bebalanced across a smart grid.

Decentralised storage

Decentralisation of electricity production alsorequires the decentralisation of energy storage.Today the major storage systems are hydro-pumpfacilities. In the future, small batteries andinnovative concepts such as fly-wheels orhydrogen fuel-cells will be used as decentralisedstorage systems.

As electric-based transport develops, the manysmall batteries in electric vehicles can act asdecentralised storage facilities while they chargeovernight. The concept is known as vehicle to grid(V2G) and requires intelligent charge anddischarge management.

Demand-side management (DSM)

Load shaving is already used by network managersto reduce demand from large electricity consumers.Instead of looking for new production capacity,which is only used during peak periods, the conceptof demand-side management (DSM) applies loadshaving to almost every electricity consumer.

The time that many domestic electrical appliancesare used could be delayed (for example, heat-pumps for washing machines, delaying EVrecharge). This would be hardly noticeable toconsumers. However, the concept could be usedto help balance intermittent sources and better useenergy when it is available.

“Theenhancementof inter-connectionscan smooththe intermittentnature ofrenewableenergysources.”

PV system integrated on a roof.

PV module, Morocco.

45

Solar policieS 4

46

4. Solar policieS

4.1. Policy drivers for the development of solar PV

Clear meaures are essential to create a successfulrenewable energy policy which provides long-termstability and security of supply16. The four mainelements of a successful renewable energysupport scheme are:

1. A clear, guaranteed pricing system to lower therisks for investors and suppliers and to lowercosts for the industry

2. Clear, simple administrative and planningpermission procedures

3. Priority access to the grid with clearidentification of who is responsible for theconnection, and what the incentives are

4. Public acceptance and support.

a. Public awareness Feed-in Tariffs: Key driver of solar success

It is surprising that Germany, not a particularlysunny country, has developed a dynamic solarelectricity market and a flourishing PV industry. Thereason is that the government has introduced aFeed-in Tariff (FiT) scheme that guarantees a pricefor all renewable electricity that is fed into the grid.Wind-powered electricity in Germany is currentlyup to 40% cheaper than in the United Kingdom17

because of the FiT.

FiT have been introduced around the world andhelped to develop new markets for PV. They havebeen supported in key reports by the EuropeanCommission (2005 and 2010 industry surveys18)and the Stern Review on the Economics of ClimateChange. Globally, more than 40 countries haveadopted some type of FiT system, with mostadjusting the system to meet their specific needs.

Extending FiT mechanisms is a cornerstone topromote the production of solar electricity inEurope. The concept requires that producers ofsolar electricity:

• Have the right to feed solar electricity into thepublic grid

• Receive a premium tariff per generated kWhthat reflects the benefits of solar electricitycompared to electricity generated from fossilfuels or nuclear power

• Receive the premium tariff over a fixed periodof time.

All three points are relatively simple, but significantefforts were required to be achieved.

The key attributes to a successful FiT scheme are:

• They are a temporary measure. FiT schemes areonly required for the pre-competitive period untilsolar PV reaches grid parity.

• Costs are paid by utility companies anddistributed to all consumers. This ensures thenon dependence of the government budgets.

• FiTs drive cost reductions. The tariff should beadapted each year, for the newly installed PVsystems.

• FiT encourage high-quality systems. Tariffsreward people who generate solar electricity,but not those who just install a system. It thenmakes sense for owners to keep their outputhigh over the lifetime of the system.

• FiT encourage PV financing. Guaranteeingincome over the life of the system enablespeople to get loans to install PV. It also makesthis kind of loan structure more common andsimpler for banks and PV system owners.

“FiT havebeenintroducedaround theworld andhelped todevelop newmarkets for PV.”

Large Thin Film power plant.

47

Solar policieS4

FIGURE 26 FIT – HOW DOES IT WORK IN PRACTICE? AN EXAMPLE OF THE MECHANISM OF A FEED-IN TARIFFFOR SUSTAINED COMPETITIVE GROWTH

Supply [generation] Demand [consumption]

2. Renewable energy generator operator [RE]key responsibilities:• follows technical standards for grid connection and operation (-> LG)

• reports every technical failure directly to LG• operates the RE power plant

6. Consumer [CON]key responsibilities:• pays electricity bill (including the extra charge for Feed-in Tariffs)

• gets renewable and conventional electricity

5. Distributor [DIS]key responsibilities:• collects money from consumer(based on forecast of TM) and transfers it to TM

• organizes billing for consumer• distributes RE electricity

4. Transmission grid operator [TM]key responsibilities:• calculates the total estimated RE electricity generation based on forecasts from LG

• calculates the total generated RE electricity based on information from LG

• calculates needed total Feed-in Tariffs based on estimated RE electricity production

• breaks down the additional costs per kWh for distributor• collects the money from Distributors (DIS)• distributes money to LG to pay Feed-in Tariffs to RE operators

3. Local grid operator [LG]key responsibilities:• guarantees grid connection• reports quantity of estimated REelectricity (forecast) to TM

• reports quantity of produced REelectricity to TM

• pays Feed-in Tariff to RE power plant

Dis

trib

uti

on C

omp

an

y

1. Government [GOV]key responsibilities:• setup legal framework for grid connection and distribution of electricity

• sets (decreasing) tariffs for all RE sources• NO involvement in money flow

source: Greenpeace International.

€ €

48

“It isnecessary to foreseechanges in marketconditionsand adaptFiT to ensurea sustainablegrowth path.”

Key Recommendations for sustainable support for PV

EPIA has developed the following key recommendations for policy-makers so they can implementadequate support schemes for PV:

1. Use Feed-in Tariffs or similar mechanisms

Feed-in Tariff laws introduce the obligation for utilities to conclude purchase agreements for thesolar electricity generated by PV systems. The cost of solar electricity purchased is passed onthrough the electricity bill and therefore does not negatively affect government finances. In markets,where FiTs were introduced as reliable and predictable market mechanisms, they have proven theirability to develop a sustainable PV industry that has progressively reduced costs towards grid parity.In order to be sustainable, it is critical that FiTs are guaranteed for a significant period of time (atleast 20 years), without any possibility of retroactively reducing them.

Feed-in Premium (FiP) is a new mechanism that may prove to be a viable alternative to FiTs. Underthe FiP, utilities pay a premium on top of the price of electricity while the invoice of the consumeris reduced by the amount of PV electricity produced. If PV electricity exceeds consumption, thedifference should be eligible for a feed-in tariff. However, the FiP concept is new and unproven butshould be considered and worked out in more detail before it is tested in the market.

With the growing penetration of PV in many countries, support policies can be fine-tuned to drivethe development of a specific market segment where this is useful.

Direct consumption premiums, additional incentives for Building Integrated PV (BIPV), compensationfor regional irradiation variations, orientation premiums (East or West-oriented PV systems andstorage premiums are all examples of possible additional provisions.

2. Ensuring transparent electricity costs for consumers

As the cost of renewable energy sources such as PV is very transparent to the consumer throughthe FiT component on the electricity bill, it will be important going forward to create the sametransparency for the cost of generating electricity from other, conventional, sources. These typicallybenefit from significant government support schemes that are not always reflected in the electricityprice but are financed through other public means; in particular taxes paid by those sameconsumers but not accounted for on the electricity bill. On average, estimates suggest thatconventional sources of electricity generation benefit from seven times as much support asrenewable energy sources. In addition to this direct financial support comes the indirect supportof non-renewable energy through the lack of including transparent carbon costs.

The increased mix of energy from renewable sources such as PV has created a greater awarenessamong consumers about the need to increase the efficiency with which they consume electricity. Sowhile the FiT has a visible impact on the electricity bill, it is at least partially compensated by thedecrease of electricity demand. In addition, marginal cost of electricity produced from PV systemsafter the expiration of the FiT period is close to zero which will benefit electricity prices in the long term.

Most importantly and in view of continued reduction of FiTs over time, the PV industry is committedto significantly reducing the cost of PV systems to make it an affordable, mainstream source of power.

3. Encourage the development of a sustainable market by assessing profitability on a regular basisand adapting support levels accordingly

Sustainable market growth allows industry to develop and creates added value for the society andthe economy as a whole. A critical aspect of sustainable development is ensuring adequate levelsof profitability that ensure the availability of capital for investments while avoiding speculativemarkets. Overall, investments in PV projects need to be at par with other investments withequivalent risk levels. The figure to the right illustrates market developments under different support

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Solar policieS4

strategies. The green line represents a sustainable market growth. The red line shows a rapid anduncontrolled market peak, followed by a collapse due to sudden policy adjustment, while the blueline illustrates a stagnating market due to an incentive deemed insufficient.

Assessing the profitability through IRR calculations. All available support scheme components(including FiT, tax rebates and investment subsidies) must be taken into account when calculatingthe Internal Rate of Return (IRR) of a PV investment. Its sustainability must be assessed consideringall local factors that impact the relative profitability of a PV investment. The table 1 presents anestimate of average sustainable IRR levels in a standard European country. Those percentagesneed to be adapted depending on local market conditions.

4. Gradual market development with the corridor concept

An uncontrolled market evolution tends to create “stop-and-go” policies that risk underminingstakeholders’ confidence in and investor appetite for PV. In that respect, there is a need for a flexiblemarket mechanism that is able to take into account more rapid cost digressions in the market and toadapt support schemes in order to ensure a sustainable growth path. The market corridor – asintroduced in Germany for example - regulates the FiT based on market development over the previousperiod, thus allowing FiTs to be adapted so as to maintain growth within predefined boundaries. TheFiT level is decreased on a regular basis in relation to the cumulated market level over a period passingbelow or above a set of predefined thresholds (quarterly or semi-annual revisions). The review periodsshould typically be set at once a year to keep the administrative burden manageable for governmentsand to remain compatible with the visibility needed for investment cycles.

5. Developing a national roadmap to PV competitiveness

With the ongoing decrease in installed PV system costs and the increase in conventional electricityprices, the use of financial incentives will progressively be phased out, as competitiveness isreached. A realistic roadmap to grid parity should be defined for every country along with conceptsfor market mechanisms that treat all electricity sources equally.

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

UNSUSTAINABLE

SUSTAINABLE

INSUFFICIENT

FIGURE 27PV MARKET DEVELOPMENT UNDER DIFFERENT SUPPORT STRATEGIES

source: EPIA.

PV Market Size

Support reductionannouncement

Privateinvestor

Businessinvestor

UnsustainableSupport

> 8%

> 12%

SustainableSupport

< 6-8%

< 8-12%

InsufficientSupport

< 6%

< 8%

TABLE 12ILLUSTRATIVE INTERNAL RATEOF RETURN LEVELS

50

b. Other drivers of a successful PV market development

Streamlining administration procedures

To help keep project costs down and avoidunnecessarily high levels of FiT, EPIA has madethree recommendations for the management of FiT schemes:

1. Assess the administrative process.Policymakers should aim for a process that istransparent, linear in approvals, simple, cost-effective and proportional in effort for the owner. Long administrative delays orrequirements that applicants contact multipleagencies or government bodies increases thelead time and cost of new projects. Allauthorisations, certifications and licensingapplications should be assessed and deliveredthrough a one stop-shop. In addition a reliablemonitoring system must be ensured.

2. Reduce administrative lead times to areasonable period. Short lead times must be apriority, especially for small-scale systems. Anydelay in the authorisation process means lessprofitability for the investor. This reduces returnand makes the project less attractive. Supportschemes should provide automatic approval forsmall systems if no action is taken by the bodyresponsible within a reasonable time limit.

3. Simplify and adjust support schemes levels.Once the administrative process has beensimplified, the FiT should be adapted (lowered)when it has created cost reductions forsuppliers. If this is not done, PV projectsbecome too profitable, creating anunsustainable market that is likely to crash.

Guaranteeing efficient grid connection

Grid connection agreements are crucial becausethey give confidence to the investor byguaranteeing that the electricity produced will besold and transported. However, grid connection isoften the most severe roadblock on a PV project.It can delay the project and dramatically increaseits overall cost. EPIA recommends:

1. Assess the grid connection process. Theassessment should focus on transparency,providing comprehensive information, anappropriate notification requirement, guaranteedlead times and cost-sharing between the PV operator and the distribution systemoperator DSO.

2. Reduce grid-connection lead time to a fewweeks. Delays in the authorisation processmust be avoided to guarantee short lead timesand investor returns. Electricians should beaccredited to connect small-scale systems tothe grid with only a notification to thedistribution system operator DSO.

3. Ensure priority access to the grid. Once theconnection permit has been granted, thetransport and distribution of the electricityproduced by PV systems should beguaranteed for the lifetime of the installation.

4. Deliver grid connection permits to reliableproject developers. Policy announcements canbe followed by a flood of grid connectionrequests, in such a way that virtually all existingcapacity could be exhausted. To avoid such asituation and counteract speculation, permitsmust only be issued to reliable investors.Validity of permits must be limited in time, andlarge project developers can be asked for bankguarantees to ensure they live up to theircommitment.

6. Ensure the financing of network operators. Thebenefits that PV brings to electricity networks,especially at the distribution level, come at acost, meaning that necessary investmentsmust accompany the development of PV andits smooth integration on electricity networks.Ensuring funding for DSOs or TSOs can benecessary to secure maintenance and upgradeof the electricity grid.

“Gridconnectionagreementsare crucialbecause they giveconfidence to theinvestor byguaranteeingthat theelectricityproduced willbe sold andtransported.”

“Streamliningadministrationprocedureshelp keepproject costsdown andavoidunnecessarilyhigh levels of FiT.”

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“Levels of PVinstallationsgrow when aFiT schemeis establishedthat isattractive toinvestors,well designedandaccompaniedby specificmeasures.”

As shown on Figure 33, many EU Member Stateshave implemented FiT, but not all of them have highlevels of PV installation. Levels of PV installations growwhen a FiT scheme is established that is attractive toinvestors, well designed and accompanied byspecific measures (such as reduced administrative

and grid connection procedures). The PV Legalproject is analysing existing legal and administrativebarriers in 12 EU countries that are preventing the PVmarket from developing to its full potential. Most ofthe countries under study have implemented asupport scheme to deploy PV19.

< 50 50 - 99 100 - 999 1,000 - 5,000 > 5,000

363

272

4659,785

FIGURE 28 SUPPORT SCHEMES IN EUROPE

FEED-IN TARIFF

TRADABLE GREEN CERTIFICATES

OTHER EG. INVESTMENT SUBSIDY, TAX EXEMPTION ETC. PV POWER INSTALLED

BY THE END OF 2009MW

53

8

5

8

34

1

5

3

56

1

18

1,167

24

2

64

100

3,386

source: EPIA.

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Supporting BIPV

Specific regulatory frameworks can be used topromote the inclusion of solar panels in the fabricof buildings (Building Integrated Photovoltaics orBIPV). The policies can be used to improve theenergy performance of buildings and increase theamount of solar electricity in the overall energy mix.

In Europe, several countries have put measures inplace to support BIPV. This is largely in responseto the Energy Performance of Buildings Directive(EPBD)20 from the European Commission.Examples include:

• France. Legislation sets maximum energyconsumption limits* for new and existingbuildings. The limits indirectly promote the useof renewable energy and, in particular, solartechnologies in new buildings and in existingbuildings that are being substantially renovated.

• Italy. BIPV is promoted through a combinationof specific requirements in the legislation toimplement the EPBD Directive and the structureof the FiT.

Both in France and Italy, the requirements obligeowners of all new buildings, public or private, toinstall PV systems. For existing buildings, PV ismandatory if the building envelope is undergoingsubstantial refurbishment or, a building with a totaluseful surface exceeding 1,000 m2 that is to bedemolished and reconstructed.

• Spain. PV is compulsory on new buildings (seeTable 13). According to the country’s TechnicalBuilding Code (Código Técnico de laEdificación), the minimum requirementsdepend on the purpose of the building, theclimate zone, and the dimensions of thebuilding. Unfortunately, the obligations underthis regulation are often not fulfilled. The localauthorities do not always follow-up to ensurethat PV has been installed.

“BIPVpolicies canbe used toimprove theenergyperformanceof buildingsand increasethe amountof solarelectricity inthe overallenergy mix.”

In Ohta, Japan, an interesting experiment has beenconducted. The entire town has been equipped with BIPV systems to test the feasibility of a large-scale implementation.

Building destination

Supermarkets

Shopping and leisure malls

Warehouses

Administrative

Hotels and hostels

Hospitals and clinics

Fairground halls

Limits

Over 5,000 m2 built

Over 3,000 m2 built

Over 10,000 m2 built

Over 5,000 m2 built

Over 100 places

Over 100 beds

Over 10,000 m2 built

TABLE 13PV OBLIGATIONS IN NEW BUILDINGS IN SPAIN

source: Spanish Technical Building Code.

* The limits for new buildings range between 250 and 80kWhprimary/m2/year depending on the zone and the type of heatingand from 130 to 80kWh primary/m2/year depending on the zone.For further information please consult the EPBD Country EnergyReports, available online at the following address:www.buildup.eu/publications/1916

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4.2. Policies in the top ten markets

More than 40 countries in the world haveintroduced FiT for renewable energy systemsincluding PV. The following case studies show the approaches of the top ten countries for PV deployment.

Germany

The German Feed-in Law (EEG) has inspired manyother countries. It has been a strong driver for theGerman PV industry and has also shown the restof the world that political commitment can achieveboth environmental goals and industrialdevelopment at the same time. In June 2007, theGerman parliament decided to amend the EEGand introduced annual tariff decreases. In 2010,the first decrease in FiT occurred in January.Additional adjustments were made in July andOctober. Further decreases will be implemented inJanuary each year. The drop in FiT has led to asharp decline in both tariffs and system prices,putting a lot of pressure on the PV industry.

The bonus for facade-integrated systems has beensuppressed and the tariff for ground-mountedsystems on agricultural land has been abandoned.

Germany’s scheme includes a corridor mechanismthat automatically reduces the tariffs each yearbased on the level of the market during the pastyear. If the growth of the PV market (newinstallations) in a year is stronger or weaker thanthe defined growth corridor, FiT will be adjusted upor down the following year. The amount of theadjustment equals the percentage that thethreshold was exceeded (or not met). In 2010,Germany reinforced the premium for auto-consumption of PV-generated electricity.

Italy

In Italy the FiT is paid by Gestore dei Servizi Elettrici(GSE). The tariffs change according to the plantsize and the level of building integration.

A country that has naturally high levels of sunshine,Italy also offers an attractive support scheme. Itmixes net-metering and a well-segmented FiT. InJanuary 2009, the Italian government extended thenet-metering (Scambio sul posto) to PV systemsup to 200 kW. This ensures the PV system ownersreceive the same price for the electricity theyproduce and the electricity they consume from thegrid. If, over a time period, there is an excess ofelectricity fed into the grid, the PV system ownerreceives a credit (unlimited in time) for the value ofthe electricity. This measure is quite attractive forthe residential, public and commercial sectors. Inaddition to the value of the electricity they add tothe grid, the PV system owners also receive apremium FiT on the total electricity produced bythe PV system.

There are also higher tariffs for BIPV systems thatsupport the development of innovative productsand applications for roof-mounted systems. Theincentives will remain the same until the end of2010 and are granted for 20 years.

After long discussions, the Italian government hasfinally approved the third Energy Bill (ContoEnergia) which will reduce the tariffs in multiplephases. The government hopes it will not put thedevelopment of PV at risk in Italy. The secondEnergy Bill included a cap at 1,200 MW which wasenhanced with a grace period. The new Bill willpush this limit to 3,000 MW under the sameconditions.

“The GermanFeed-in Law(EEG) hasinspiredmany othercountries.”

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Japan

In 2009, Japan restarted its subsidy for residentialPV systems and introduced a new programme topurchase surplus PV power. The changes wereincluded in the Promotion of the Use of Non-FossilEnergy Sources and Effective Use of Fossil EnergySource Materials by Energy Suppliers Act. Almost99% of the PV systems installed in Japan during2009 were grid-connected, distributedapplications, mainly residential PV systems.

The Ministry of Economy, Trade and Industry (METI)allocates budgets for market revitalisation,subsidies for the installation of residential PVsystems, technology development for PV powergeneration, field testing of new technologies, gridtesting with large-scale PV power generationsystems, and the development of an electricenergy storage system.

In July 2009, the METI enacted legislation whichobliges electricity utilities to purchase surplus PVpower. Incentives also take other types of cleanpower generation (such as fuel cells) intoconsideration. Prices are expected to be reviewedannually and all electricity customers will contributetowards the costs.

Looking forward, the New Energy and IndustrialTechnology Development Organization (NEDO) hasreviewed its 2004 PV technology roadmap. NEDOhas brought forward the original timeframe by threeto five years, and renamed it PV 2030+ with anoutlook now to 2050. The government alsoincreased the target for PV installed capacity inJapan from 14 GW to 28 GW by the end of 2020.By the end of 2030 the goal is to reach 53 GW21.

United States

The United States have been a sleeping PV giantuntil recently.

The US economy has been in turmoil since 2008and state legislatures faced severe budget crisesin 2009. To compensate, federal and state leadershave adopted policies to develop cleaner andmore diverse energy sources as tools foreconomic revitalisation.

In 2009, the investment tax credit cap was removedand the 30% federal investment tax credit forcommercial and residential PV systems wasextended to 2016. This credit can now also be usedby electricity utilities. The relative vigour of the PVmarket depends on the approach of individualstates. California, New Jersey, Florida, Colorado andArizona are the top five states for new installations.

Between September 2008 and September 2009,approximately 40 new solar incentive programmeswere created in 19 states. Incentive levels werereduced in ten states. The performance-basedincentives for PV in 2009 included:

• 14 production incentives (other than FiT)

• 11 FiT

• 14 renewable energy credit (REC) purchaseprogrammes.

California established a law, effective from 2011,that enables utilities that purchase electricitythrough the state’s FiT to be eligible for creditsunder the state’s renewable portfolio standards(RPS). By the end of 2009, RPS existed in 30states. Seveteen of these states have specifiedthe amount of solar electricity and/or distributedgeneration that must be provided. New financingoptions have evolved rapidly at the city and county level.

Through Property-Assessed Clean Energy (PACE)programmes, several local governments offeredloans to property owners to help pay for PVsystems. Several such programmes arose fromthe Department of Energy’s Solar America Cities initiative. By the end of 2009, 18 states had authorised PACE programmes andapproximately 30 municipalities had implementeda PACE programme22.

Worker installing PV on roof.

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Czech Republic

The Czech market has skyrocketed under thecombination of a very favourable FiT and lowadministrative barriers in 2009 and 2010. Thereare a large amount of ground-mounted systems inthe country, demonstrating that FiT have thecapacity to develop a strong market, and howimportant a dynamic market control mechanism isfor long-term success.

Expectations for 2011 are quite pessimistic and noreal market is expected there due to measures thatthe government has adopted that don’t favour PVmarket development.

This illustrates the need to balance all marketdevelopment drivers to ensure the continuousgrowth of PV.

Belgium

Belgium could be seen as a strange inclusion in thislist. It’s green certificates support schemes in eachof the country’s three regions which havesucceeded in developing the PV market. Thescheme differs in each of the country’s threeregions (Brussels, Flanders, Wallonia).

There has been a decrease in the level of supportand at the end of 2009, the government bonuswas abandoned in the region of Wallonia in orderto control the rapid growth of the local PV market.

Green certificates are issued for all renewableenergies, with values that depend on the energysource. Utilities must ensure they can produceenough renewable energy, either through their ownproduction, or by acquiring green certificates. Theproportion of renewable energy required in thesystem is increased every year by 1%.

In the region of Flanders, green certificates have afixed price. In Wallonia, their value fluctuates on anexchange market according to the laws of supplyand demand. The fluctuations are limited by alower value which is arbitrarily defined. Themaximum value is equivalent to the penalty thatmust be paid by utilities if they cannot meet theirrenewable energy target at the end of the year.

France

Despite an attractive FiT, administrative and gridconnection burdens have slowed down the growthof PV in France. The French FiT was modified inJanuary 2010, and reviewed again in September2010. Now, BIPV systems are favoured with multipletariffs that are amongst the highest in the world. Agood tariff for ground-mounted systems rewardsnorth located installations with a correction coefficientthat depends on local irradiation levels. Thecomparatively low BAPV tariff was being misused untilthe end of 2009 – some buildings were constructedonly to install PV systems. This was corrected in theJanuary 2010 decree, when more constraints wereplaced on those who can receive the highest BIPVtariff. Due to the high BIPV incentives, the BAPVmarket is now almost non-existent.

Another correction of FiTs should follow at thebeginning of 2011. The side effect of suchfrequent changes in policy is a severe loss ofconfidence by investors.

China

The largest PV producer in the world still has asmall PV market. Some regional initiatives havecreated local FiT, but there is no supportmechanism at the national level.

The Golden Sun programme has a target of 500MW of PV systems installed in three years for bothon-grid and off-grid applications. Someinstallations could come on-line in 2010 and 2011,but it is unclear whether this will be enough togenerate a real growth in the market.

There is a huge potential in China. Today thecountry is preparing for a future of PV which couldtransform rural electricity generation. During 2009,there were discussions about a FiT to support PVdeployment in China. However, only the provinceof Jiangsu (located on the east coast and the hubof China’s considerable PV manufacturingresource base) introduced a FiT. It is capped at400 MW up to 2011 for three categories ofsystems: ground-mounted, rooftop and BIPVsystems. The authorities are likely to reduce the FiTover the first three years. However, the overallbinding period of the scheme is unclear.

56

China’s policies and strategies in support of PVoperate at the national, provincial and localgovernment levels. Central government issuesnational targets and encourages the provinces topropose strategies to meet the targets. Theprovinces then start a bidding process with industryand other key market actors. In late 2009, theNational Energy Authority (NEA) raised the nationalgoal of solar energy from 1.8 GW to 20 GW by2020, with 5 GW to be installed by 2015. Of the2020 target, more than half of the installations areexpected to be utility-scale PV systems23.

South Korea

In South Korea the FiT was reduced in 2009. Thechange cut the annual installed PV power that yearto one-third of the 2008 level. The change affectedthe development of larger sized (multi-megawatt)plants the most. Grid-connected centralisedsystems accounted for almost 78% of the totalcumulative installed PV power by the end of 2009.Grid-connected distributed systems amounted to21% of the total cumulative installed PV power (upfrom 15% the previous year). Most of these wereinstalled under the FiT scheme and the 100,000roof-top programme.

The Ministry of Knowledge Economy’s Third BasicPlan on New and Renewable Energy Sources R,D&D (released in 2008) proposed the constructionof one million green homes and 200 green villagesby 2020. In support of this, the governmentprovides 60% of the initial PV system cost forsingle-family and private multi-family houses, and100% of the cost for public multi-family rentalhouses. By the end of 2009, almost 40,000households had benefited from this scheme.

From late 2008, the FiT rate was reduced but thecap was increased from 100 MW to 500 MW.Beneficiaries can also choose between periods of15 and 20 years. It is planned that a renewableportfolio standard (RPS) will replace the existing FiTscheme from the year 2012. Grid parity isanticipated around 2020 in Korea. Prior to the startof the RPS, the Korean Government initiated anRPS demonstration programme to run from 2009until 2011.

Spain

World leader in 2008, the Spanish market hassince been almost completely blocked byunhelpful political decisions. Since 2009, Spainhas had a market control cap that limits the PVinstallations to around 500 MW each year. Due tothe introduction of severe legal and administrativebarriers, the market has had difficulties in reachingthe 100 MW level since 2009. Many installationswere cancelled or delayed due to the uncertainty ,at the end of 2010 a Royal Decree with retroactiveeffect on existing plants was adopted, putting atstake the viability of many investments.

The FiT has a classification of eligible PV plantswhich include:

• Roof-top plants or plants developed for similarsurfaces that are smaller or larger than 20 kW

• Any other type of plant – essentially ground-based PV plants.

The maximum size of a plant (either rooftop orground-based) is now 10 MW.

The Spanish government has decided to reducethe FiT for 2011 to favour small residentialinstallations and reduce the large, ground-mounted systems.

Other countries

Many other countries have implemented FiT orgreen certificates. The FiT approach dominates,and green certificates are being progressivelyreplaced by FiTs. This occurred in the UK in 2010.The complexity of certificates often discouragesinvestors, while the ease and cost-effectiveness ofa FiT encourages them.

In many countries, a maximum market value (orcap) is used to control market growth and limit thefinancial impact of too much solar entering thesystem. However, the cap can discourageinvestors, as can be seen in Spain.

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4.3. Developing a world-wide PV policy outlook

a. The European Union: A driver of PVdevelopment in Europe and in the world

European energy policies

The overall goal of European energy policy is toguarantee that citizens can get safe, secure,sustainable and low-carbon energy at affordableand competitive prices. The EU understands thatrenewable energy technologies can help achievethis objective, and it is setting up a positivelegislative framework to foster their deployment.

The European Commission published a WhitePaper in 1997 setting out a Community strategy forachieving a 12% share of renewables in the EU'senergy mix by 2010. The indicative target for PVwas 3 GW in cumulative installations. By the end of2010, PV’s capacity in the EU will have surpassedthis level over nine times with probably more than28 GW installed in EU at the end of 2010!

In 2001, the EU adopted the Directive for thePromotion of Electricity from Renewable EnergySources, which included a 22.1% target forelectricity for the EU-15 by 2010. The legislationwas an important part of the EU's measures todeliver on commitments made under the KyotoProtocol. However, the targets were not bindingand it became evident that they would not be met.

In January 2007, the Commission published aRenewable Energy Roadmap outlining a long-termstrategy. It called for a mandatory target of 20%renewable energies in the EU's energy mix by2020. The target was endorsed by EU leaders inMarch 200724 and became binding with theapproval in 2009 of the Climate and Energylegislative package. That package includes aspecific Directive dedicated to the promotion of theuse of renewable energy sources.25

The overall binding target applies to the EU’s totalenergy consumption by 2020. The Directive alsosets individual binding national targets. ThisDirective presents an unprecedented legislativeframework in favour of RES development and willprobably be the main driver for PV market growthin the EU.

The European Union is now preparing a roadmaptowards a low carbon energy mix by 2050. Thisshould include a very significant increase in theshare of renewable energy sources. Therenewable energy sector considers that a 100%renewable energy mix will be technically andeconomically feasible by this date.

The EU is also promoting both renewable energysources and energy efficiency measures inbuildings. There is major scope for improvementhere because the building sector is responsible forabout 40% of EU energy consumption at present.

According to the revised Energy Performance ofBuildings Directive adopted in 2010,26 all newbuildings will have to be ‘nearly zero energybuildings’ by 2020. This target should acceleratethe development of buildings with a very highenergy performance rating. The revised Directiveshould help foster PV deployment in buildings, inparticular BIPV.

Another piece of European legislation that benefitsthe deployment of renewable energy technologiesis the Third Energy Package. The package wasadopted in 200927 and its primary goal is to pursuethe liberalisation of the electricity and gas markets.

The package provides different options forMember States to separate electricity transmissionnetworks from production activities – a practiceknown as unbundling. The Third Energy Packagealso established a formalised cooperationmechanism between national energy regulatorsand transmission system operators. They will workon common network access rules and jointplanning of infrastructure investments to ensureeasy access to a modern network.

In the years to come, EU decision makers areexpected to further improve the frameworkconditions to ease the creation of a modern EU-widegrid. This in turn would mean increased and betterpenetration of the market by renewable electricity28.

“Accordingto the EU,renewableenergy canhelp to getsafe, secure,sustainableand low-carbonenergy ataffordableandcompetitiveprices.”

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European funding for renewable energy projects

Compared to other countries like Japan and USA,the European Union’s spending on research anddevelopment (R&D) is low. However, the EU isusing part of its budget to finance important R&Dprojects that can accelerate the deployment ofrenewable energy technologies.

The European Research Framework Programmeand the Intelligent Energy Europe Programme are themain schemes used to allocate grants to renewableenergy projects. The Solar Europe Industrial Initiative,initiated by the European Commission and launchedin June 201029 in the framework of its StrategicEnergy Technology (SET) Plan, is expected to makepublic funds available to co-finance key R&Dprojects with the industry. These projects will mainlyaccelerate PV cost reduction and integration of PVelectricity into the grid.

It was recently agreed that a number of allowancesset aside from the European Emission TradingScheme (ETS) could be used to finance part of theSolar Europe Industrial Initiative, especially pre-commercial innovative PV projects30. The EU mayalso decide to support energy efficiency andrenewable energy projects in urban areas by usingsome unspent funds from the European EnergyRecovery Plan, an instrument launched in July2009 to boost investments in key energyinfrastructure projects31.

b. The desert is a perfect place to developPV energy

Deserts have both high irradiation and lowpopulations. That makes them the perfect place toinstall very large scale PV systems. Projects up to2 GW are already being planned in China’s desertsthat will be a showcase for the feasibility of suchhuge installations32. The main challenges are theintegration to the electricity networks and thetransportation of electricity over long distances.The weather conditions in the desert should favourPV systems, which require limited water comparedwith other technologies.

Europe, together with northern African countries andthe Union for the Mediterranean have created theMediterranean Solar Plan. The Plan represents thefirst real attempt to conceive large PV power plantsin desert areas. According to the plans, theelectricity generated will be conveyed to Europeusing DC lines to minimise electricity losses overlong distances. Despite the high potential of theregion in renewable energies, the project aims togenerate 20 GW from all renewable sources in theMediterranean region. While this is a limited target,it could demonstrate the potential that deserts closeto highly populated regions can offer.

The concept was developed in the framework ofthe Desertec project which initially planned to useonly Concentrated Solar Thermal Power. The steepdecrease in PV prices, combined with its naturaladvantages has seen PV welcomed into the mix ofrenewable energy sources. PV industry isconfident that solar technology can be deployedon a massive scale in the deserts of the world.

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c. PV in the Sunbelt region: Ongoing policy developments

PV markets have developed initially in northerncountries, even though they lack a lot of sunlight.FiTs have helped the market to develop and tolower prices world-wide. This temporary situation isabout to change. There are many countries in theSunbelt region (the area around 30° north andsouth of the equator) that could benefit from off-gridand on-grid PV systems. That region represents78% of the world population, 27% of global GDP,and a huge potential market for PV before 2020.

In the Middle East and North Africa, policy supportis quite limited. A FiT exists in Israel and one hasbeen recently been adopted in Turkey. In 2010,Morocco launched a call for 2 GW of solarsystems to be installed by 2015, in which PV couldplay a role. In most situations, heavy administrativeprocedures and complex grid connectionschemes have held up PV development.

China, already the world's leading maker of solarPV modules, has made enormous strides indeveloping its renewable energy sector in recentyears, yet its installed base of PV still pales incomparison with its manufacturing base. TheGolden Sun programme, launched in 2009, is afirst step to righting this imbalance with targets forPV set at 20GW by 2020. The current incentivestructure for PV still assumes a subsidy based onthe cost of the initial investment rather than on thecost of generation, with a cap on overall capacity.However, PV support measures are expected toevolve further, especially with renewable energybeing named one of the Magic 7 emergingstrategic industries under the 12th Five-Year Plan(2011-2015), which will be officially unveiled inMarch 2011.

In India, legislation establishing the JawaharlalNehru National Solar Mission passed in 2009, witha target of 22 GW of solar power by 2022. Not allof this will be generated through PV, however, themove represents major progress.

In Latin America, support for renewable energyexists in some countries, particularly Chile, Brazil,Mexico and Argentina. However, PV is not yeteverywhere on the top of the political agendas.

d. Smart cities

The smart city concept refers to an urbanenvironment where investments in transport andmodern information and communicationinfrastructure provide sustainable economicdevelopment and a high quality of life. The holisticconcept also aims for wise management of naturalresources and participatory governance33.Environmental sustainability is a cornerstone ofsmart cities. The integration of renewable energieslike photovoltaics in the urban environment is anessential component.

While they sound utopian, smart cities are nowbecoming a reality. The European Commissionlaunched recently a Smart Cities Initiative34 to fosterthe transformation of 25 to 30 European cities intolow carbon cities by 2020. The indicative cost isset at €10 to €12 billion.

Smart cities are a key concept promoted by EPIA.Within the framework of the Solar Europe IndustryInitiative, EPIA expects Solar Cities and SolarIslands to be developed. They will demonstrate themany options for large-scale integration of solar PVin urban and remote environments.

Large ground-mounted PVplant, Mallorca, Spain.

Off-grid PV system in Morocco.

60

“The basicaim of FTSMis to helpintroduceFeed-in Lawsin developingcountries.”

Access to energy in developing countries: The FiT Support Mechanism

The FiT Support Mechanism (FTSM) is a proposal from Greenpeace International35 for a renewablesupport scheme for the power sector in developing countries. FTSM aims to rapidly expandrenewable energy in developing countries with financial support from industrialised nations.Investment in and generation of renewables, especially in developing countries, will be higher thanthat for existing coal or gas-fired power stations over the next five to ten years.

The FTSM concept was first presented by Greenpeace in 2008. The idea has receivedconsiderable support from a variety of different stakeholders. Deutsche Bank Group‘s ClimateChange Advisors, for example, have developed a proposal based on FTSM called GET FiT.Announced in April 2010, the proposal includes major aspects of the Greenpeace concept.

Technology transfer to developing countries For developing countries, FiT are an idealmechanism to help implement new renewable energies. Effective technology transfer from developedto developing countries will require a mix of a Feed-in Law, international finance and emissions trading.

The FiT Support Mechanism The basic aim of FTSM is to help introduce Feed-in Laws indeveloping countries that provide bankable, long-term and stable support for a local renewableenergy market. For countries with a lot of potential renewable capacity, it would be possible tocreate a new no-lose mechanism that generates emission reduction credits for sale to developedcountries. The proceeds could then be used to offset part of the additional cost of the FiT system.Other countries would need a more directly funded approach to pay the additional costs toconsumers that a tariff would bring.

The key parameters for FiTs under the FTSM are:

• Variable tariffs for different renewable energy technologies, depending on their cost andtechnological maturity, paid for 20 years.

• Payments based on actual generation in order to achieve properly maintained projects with highperformance ratios.

• Payment of the additional costs for renewable generation based on the German system, wherethe fixed tariff is paid minus the wholesale electricity price, which all generators receive.

• Payment could include an element for infrastructure costs such as grid connection, grid re-enforcement or the development of a smart grid. A specific regulation needs to define whenthe payments for infrastructure costs are made to achieve a timely market expansion ofrenewable power generation.

A developing country which wants to take part in the FTSM would need to establish clear regulations for:

• Guaranteed access to the electricity grid for renewable electricity projects.

• Establishment of a Feed-in Law based on successful examples.

• Transparent access to all data needed to establish the FiT, including full records of generated electricity.

• Clear planning and licensing procedures.

• Funding could come through the connection of the FTSM to the international emissions tradingsystem or specific funds for renewable energies.

The design of the FTSM would need to provide stable flows of funds to renewable energy suppliers.There may need to be a buffer between the price of CO2 emissions (which can fluctuate) andstable, long-term FiTs. The FTSM will need to secure payment of the required FiTs over the wholelifetime (about 20 years) of each project.

61

Solar policieS4

“Ground-upparticipationis essentialfor thesuccess ofthe model.”

The FTSM would also seek to create the conditions for private sector actors, such as local banksand energy service companies, to gain experience in technology development, projectdevelopment, project financing, operations and maintenance. This would help to develop and trackprojects, further reducing barriers to renewable energy development.

For this, Greenpeace proposes a fund, created from the sale of carbon credits and taxes. The key parameters for the FTSM fund would include:

• The fund guarantees payment of the FiTs over a period of 20 years as long as the project is operated properly.

• The fund receives annual income from emissions trading or from direct funding.

• The fund pays FiTs annually only on the basis of generated electricity.

• Every FTSM project must have a professional maintenance company to ensure high availability.

• The grid operator must do its own monitoring and send generation data to the FTSM fund. Datafrom the project managers and grid operators will be compared regularly to check consistency.

Ground-up participation While large-scale projects have fewer funding problems, there aredifficulties for small, community-based projects, even though they have a high degree of publicsupport. Strong local participation and acceptance can be achieved. There have been goodexamples in micro-credit schemes for small hydro projects in Bangladesh and wind farms inDenmark and Germany. The projects provide economic benefits that flow to the local communitywhen carefully planned based on good local knowledge and understanding. Generally, when thecommunity identifies the project – rather than the project identifying the community, the result is arenewables sector that grows faster from the ground-up.

FTSMRoles and responsibilities

Developing country

Legislation:• Feed-in Law• guaranteed grid access• licensing

(Inter-) national finance institute(s)

Organizing and Monitoring:• organize financial flow• monitoring• provide soft loans• guarantee the payment of the Feed-in Tariff

OECD country

Legislation:• CO2 credits under CDM• tax from Cap & Trade• auctioning CO2 Certificates

FIGURE 29 THE GREENPEACE – PROPOSED FEED IN TARIFF MECHANISM

62

5 Solar power marketS

63

Solar powermarketS

5

5. Solar powermarketS

5.1. History of PV markets

The solar power market is booming. More than 22GW were installed across the world by the end of2009, and provisional figures show a globalinstalled capacity exceeding 37 GW by the end of 2010.

In Spain and Germany, the average contributionfrom PV to electricity generation is more than 2%of the total on average per year. But PV providesmuch more in key regions with the right mix of Sunand good government support. For example, in theSpanish region of Extremadura, PV had made-up15% of the electricity mix in 2010, with peaks ofup to 25% in the summer. Without a doubt, PV hasshown that it can compete with other electricitygeneration sources.

a. Europe at the forefront of PV development

Germany remains the world’s largest PV marketwith a cumulative installed PV power of almost 10GW at the end of 2009. By the end of 2010 thisprobably exceeded 15 GW. This is equivalent totwo standard nuclear power plants.

Italy is one of the most promising mid-term marketswith an additional 711 MW installed in 2009. Thetarget for 2010 is more than 1.5 GW, possibly 2GW. The country has high levels of Sun, and thenew Conto Energia law announced in mid-2010will continue to support the strong momentum ofthe Italian market.

The Czech Republic showed an important growthin 2009 with 411 MW installed. However, due tounsustainable support schemes, the market isexpected to shrink significantly in 2011, after ahectic 2010 year marked by strong oppositionfrom conventional stakeholders and more than 1.4GW of cumulative installed capacity.

Thanks to favourable political will, Belgium madeits entry into the top ten markets with 292 MWinstalled in 2009. The market had, however,slowed down or stagnated in 2010 due to a revision of the financial support scheme in early 2010.

France follows with 185 MW installed in 2009 andan additional 100 MW installed but not yetconnected to the grid. France has huge potentialbut must solve grid connection issues in order forPV to penetrate decentralised power sources andto allow the market to develop. In the first sixmonths of 2010, grid connection became easierand the market grew in response.

In Spain, a new market cap created in 2008,combined with the effects of the financial crisis,constrained the market to almost zero in 2009. In2010, instability in political decisions createdturmoil in the PV industry, holding the Spanishmarket back significantly.

Greece, the UK, Slovakia and, to a certain extentPortugal, are showing a strong potential for growth.

b. Japan and USA lead outside Europe

Outside Europe, Japan became third largestmarket in 2009 with 484 MW installed and showsmore growth potential thanks to favourable politicalsupport. The US market finally took off significantlywith around 475 MW installed in 2009. It appearsto be a potential leading market in coming years,with many ground-mounted systems startingproduction in 2010.

China and India are also expected to boom in thenext five years with huge market potential andimpressive projects in the pipeline. Canada andAustralia showed significant market developmentin 2009 and are expected to open the way to thedevelopment of new markets. Brazil, Mexico,Morocco, Taiwan, Thailand, South Africa and manyothers are also seen as promising countries.

“The solarpowermarket isbooming.”

d. Root causes of PV market development

Photovoltaic electricity is becoming more prevalentprogressing towards grid parity. However, in manycases today, PV remains more expensive thanconventional electricity production methods. Theprice decrease is so fast that the competitivenessof PV with other energy sources will be achieved inaround five years in several countries.

Political support and, especially in Germany, theintroduction of FiT has closed the gap withconventional energy sources and triggered greatermarket deployment. This kind of support iscurrently the main driver to PV development. Otherincentives complement the support schemesdepending on the country.

64

c. Distribution of the world PV market in 2009

The development of PV in the last ten years hasbeen exponential. Driven by smart incentives suchas FiT and other policies, the PV market surgedand will continue to do so in the coming years.

Figure 31 shows the evolution of the cumulativeinstalled capacity in the entire world since 2000.The split clearly shows the importance of theEuropean Union in that development and howJapan, which was one of the initiators, wasovertaken by Europeans. The development of PVin the rest of the world has now begun and willrapidly rebalance the market. The currentdomination of European countries shows how theright political choices influence the energy sectorin general and PV in particular.

“Politicalsupport and theintroductionof FiT hasclosed thegap withconventionalenergysources andtriggeredgreatermarketdeployment.”

2000

1,428

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

2001

1,762

2002

2,236

2003

2,818

2004

3,939

2005

5,361

2006

6,956

2007

9,550

2008

15,675

2009

22,878

2010low

35,320

2010high

38,584

CHINA

USA

REST OF WORLD

JAPAN

EU

FIGURE 31 GLOBAL EVOLUTION OF PV INSTALLED CAPACITY MW

source: Global Market Outlook for Photovoltaics until 2014, EPIA, May 2010.

2009

source: EPIA.

FIGURE 30THE WORLD PV MARKET IN 2009

BELGIUM 4%

CZECH REPUBLIC 6%

FRANCE 3%

GERMANY 53%

GREECE 0.5%

ITALY 10%

PORTUGAL 0.5%

SPAIN 1%

REST OF EU 1%

JAPAN 7%

USA 7%

CHINA 2%

INDIA 0.5%

SOUTH KOREA 2%

CANADA 1%

AUSTRALIA 1%

REST OF WORLD 2%

65

Solar powermarketS

5

Electricity markets are driven by profitability rules;investors are keen to invest in power plants if theycan benefit from an added value. This is why tariffschemes work. PV is now considered to be areliable investment in many countries, in the sameway conventional energy sources were viewed in the past.

In the 27 EU countries during 2009, PV took thirdplace in terms of new electricity capacity, behindwind and gas, but ahead of coal and nuclear.

Depending on the amount of new gas powerplants installed in Europe in 2010, PV could scorethe first or second place in terms of new addedcapacity. It will overtake all other power generationsources, from wind to coal and nuclear.

e. Future PV markets: The Sunbelt region

The technology is mature and is available.Developed economies have contributed to achievethis. Lower system prices make PV more and moreaffordable and competitive in other regions of the world.

The Sunbelt region provides a massive opportunityto develop PV in the coming years. Moreover,sunny regions are not the only ones where PV canbe part of the energy mix. Denmark’s high electricityprices could help the country to reach grid paritybefore other, sunnier European countries.

New PV markets will appear progressively, drivenby the falling cost of the technology and anappetite for energy. The combined effects ofenergy scarcity and the urgent need to mitigateclimate change will drive the emerging PV markets.

f. A bright future for PV

New PV installations could have reach between 12and 15 GW in 2010 globally, another year ofsignificant growth. The future is somewhat harderto predict. While PV system prices are continuingto go down, an increase in conventional electricityprices will open new markets all over the world.Continued political support in Europe andelsewhere will be required to help PV get passedthe pre-competitive phase and become a majorglobal energy source within a decade.

“In 2009, inthe EU 27,PV took thirdplace interms of newelectricitycapacity,ahead of coaland nuclear.”

WIND

10,048

6,266

5,605

542

418

172

120

102

54

12

3.4

0.4

0 -795

-954

11,000

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

-1,000

NATURAL GAS

PV

BIOMASS

WASTE

LARGE HYDRO

CSP

FUEL OIL

SMALL HYDRO

OTHER GAS

GEOTHERMAL

OCEAN

PEAT

COAL

NUCLEAR

FIGURE 32 NEW INSTALLEDELECTRICAL CAPACITY IN 2009 IN THE EUMW

source: EPIA, EWEA, ESTELA, OEA-EU, Platts PowerVision.

FIGURE 33 PV IN THE SUNBELTCOUNTRIES

source: World Bank, IMF, A.T. Kearney analysis.

COUNTRIES IN SCOPE OF STUDY

# countries(2008)Population(2008)GDP (2008)Electricity consumption (2007)

World

201

6.7 billion

60.0 trillion

17,900 TWh

Allcountriesin Sunbelt

148

5.3 billion

16.4 trillion

7,000 TWh

Sunbeltcountries in scope

66

5.0 billion

15.7 trillion

6,800 TWh

66

2009 2010

500,000

400,000

300,000

200,000

100,000

0

2020 2030

OECD North AmericaTOTAL CAPACITYMW

2009 2010

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0

2020 2030

Latin AmericaTOTAL CAPACITYMW

1,773 MW

400 MW

442 MW

484 MW

2,319 MW

2,456 MW

2009 2010

90,00080,00070,00060,00050,00040,00030,00020,00010,000

0

2020 2030

AfricaTOTAL CAPACITYMW

100 MW

163 MW

163 MW

2009 2010

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

2020 2030

OECD EuropeTOTAL CAPACITYMW

16,046 MW

2009 2010

2,000,000

1,600,000

1,200,000

800,000

400,000

0

2020 2030

GlobalTOTAL CAPACITYMW

23,004 MW

34,986 MW

36,629 MW

ACCELERATED

PARADIGM SHIFT

WORLD MAP GLOBAL CUMULATIVE CAPACITY SHOWING THE ACCELERATEDAND PARADIGM SHIFT SCENARIOS BY REGIONMW

67

Solar powermarketS

5

2009 2010

50,000

40,000

30,000

20,000

10,000

0

2020 2030

Middle EastTOTAL CAPACITYMW

150 MW

176 MW

213 MW

2009 2010

50,000

40,000

30,000

20,000

10,000

0

2020 2030

Transition EconomiesTOTAL CAPACITYMW

5 MW

6 MW

7 MW

2009 2010

120,000

100,000

80,000

60,000

40,000

20,000

0

2020 2030

IndiaTOTAL CAPACITYMW

2009 2010

250,000

200,000

150,000

100,000

50,000

0

2020 2030

ChinaTOTAL CAPACITYMW

134 MW

373 MW

606 MW

624 MW

179 MW

200 MW

2009 2010

80,000

60,000

40,000

20,000

0

2020 2030

OECD PacificTOTAL CAPACITYMW

3,273 MW

5,247 MW

5,609 MW

2009 2010

100,000

80,000

60,000

40,000

20,000

0

2020 2030

Developing AsiaTOTAL CAPACITYMW

750 MW

775 MW

800 MW

68

5.2. The Greenpeace/EPIA Solar Generation scenarios

a. Methodology and assumptions

Greenpeace and EPIA have joined their resourcesto work out how much photovoltaic electricity couldbe available across the whole world in the comingdecades. These scenarios have been developedusing the extensive knowledge in both organisationsof renewable energy and PV in particular.

The scenarios put forward details of potentialmarkets up to 2030 and also provide global figuresup to 2050.

The scenarios make projections for installedcapacity and energy output. They also assess thelevel of investment required, the number of jobsthat could be created and the crucial effect thatincreased input from solar electricity will have ongreenhouse gas emissions.

The Paradigm Shift scenario

Called the Advanced scenario in previous editionsof Solar Generation, this scenario estimates the fullpotential of PV in the next 40 years.

It has been renamed Paradigm Shift in order toreflect the need, over the next two decades, toshift energy policies from conventional electricitygeneration to renewable energy in general and PVin particular. It represents the real technicalpotential of PV as a reliable and clean energysource, in all parts of the world.

In the Paradigm Shift scenario, PV would produceup to 12% of the electricity needs in Europeancountries by 2020 and in many countries from theSunbelt (including China and India) by 2030 (thisdifference originates from the early development ofPV in Europe). It is ambitious, but also feasible,providing some boundary conditions are metbefore 2020, especially in the EU. Even if thisstrong growth cannot be achieved in the firstdecade, the 2050 targets remain reachablewithout too many changes. At that point, a realglobal paradigm shift needs to happen.

The assumption is that current support levels will bestrengthened, deepened and accompanied by avariety of instruments and administrative measuresthat will push the deployment of PV forward.

The Accelerated scenario

Called the Moderate scenario in previousGreenpeace Outlook reports, the name has beenchanged to Accelerated to reflect expectations.The scenario foresees the ability to deploy PVfaster, in line with market developments, than hasbeen seen in recent years.

In the Accelerated scenario there is a lower levelof political commitment than the Paradigm Shiftscenario. It can be viewed as a continuation of thecurrent support policies and it could easily beachieved in 20 years without any major technologychanges in electricity grids.

“TheParadigmShift scenarioestimates thefull potentialof PV in thenext 40years.”

Average market growth ratesunder the Paradigm Shift

2021-2030

11% for 5 years

then 9%

2011-2020

42%

2031-2040

7% for 5 years

then 5%

2041-2050

4%

TABLE 14SUMMARY OF EPIA/GREENPEACE PARADIGM SHIFT SCENARIO

Average market growth ratesunder the Accelerated scenario

2021-2030

14% for 5 years

then 10%

2011-2020

26%

2031-2040

7% for 5 years

then 6%

2041-2050

4%

TABLE 15SUMMARY OF EPIA/GREENPEACE ACCELERATED SCENARIO

69

Solar powermarketS

5

Over the longer term, the gap between theAccelerated and Paradigm Shift scenarios widens.Fast market deployment is difficult with insufficientadditional global political support. Without thepotential for economies of scale, PV production costsand prices will fall at a slower rate than in theParadigm Shift scenario. This will result in a lower levelof PV deployment, which impacts the final target.

The growth rates presented in this scenariorepresents an average calculated from varyingrates of annual growth.

The Reference scenario

The Reference scenario is based on the scenario ofthe same name in the International Energy Agency’s2009 World Energy Outlook (WEO 2009) analysis.The data has been extrapolated forward from 2030.Compared to the previous (2007) IEA projections, theWEO 2009 assumes a slightly lower average annualgrowth rate in world Gross Domestic Product (GDP)of 3.1% (down from 3.6% in the previous forecast)over the period 2007 to 2030. At the same time, thereport expects energy consumption in 2030 to be 6%lower than in the WEO 2007 report. China and Indiaare expected to grow faster than other regions,followed by the Other Developing Asia group ofcountries, Africa and the Transition Economies (mainlythe former Soviet Union).

b. Scenario assumptions

The scenarios are based on many different countryand regional scenarios from Greenpeace and EPIAreleased in recent years.* The value of PV in eachscenario takes into account the limitationsproduced by the combination of differenttechnologies. It also assumes little progress instorage systems in the short-term.

Regional split

The scenarios present a view of the future usingglobal figures. They also estimate regional valuesfor PV growth. The regions defined are EuropeanUnion (27 countries), rest of Europe, OECD Pacific(including South Korea), OECD North America,Latin America, East Asia, Developing Asia(excluding South Korea), India, China, the MiddleEast, Africa and the Transition Economies (mainlythe former Soviet Union).

Electricity consumption

This outlook also considers two estimates ofgrowth in electricity demand over the first decadesof the 21st century.

The Reference scenario for global electricitydemand simply utilises the projections made bythe IEA (WEO 200736). These show global demandfor power increasing without much constraint.Demand is expected to be:

• 17,928 TWh in 2010

• 22,840 TWh in 2020

• 28,954 TWh in 2030.

By 2050, the demand would top 39,360 TWh. Thecontribution from PV power is expressed as apercentage of this value.

The Alternative scenario for future electricitydemand is based on the Greenpeace/EuropeanRenewable Energy Council Energy [R]evolutionreport (January 2007) and takes into accountextensive energy efficiency measures. Thosemeasures should ensure consumption of electricityis significantly lower in 2030 than today. Thisreflects what has to happen in order to meet theambitious targets for CO2 emissions required tokeep the Earth’s warming below two degreescentigrade. The scenario shows a global demandfor power following a more controlled growth:

• 17,338 TWh in 2010

• 19,440 TWh in 2020

• 20,164 TWh in 2030.

In 2050 demand should reach 31,795 TWh. Thecontribution of PV (as a percentage) is thereforehigher under this projection.

“Fast marketdeploymentis difficultwithinsufficientadditionalglobalpoliticalsupport.”

* Current PV market data from reliable sources (nationalgovernments, the International Energy Agency, PV industry). PVmarket development over recent years both globally and inspecific regions. National and regional market supportprogrammes. National targets for PV installations andmanufacturing capacity. The potential for PV in terms of solarirradiation, the availability of suitable roof space and the demandfor electricity in areas not connected to the grid. Existing EPIA andGreenpeace studies (such as EPIA’s SETfor2020, Unlocking theSunbelt potential for PV and EREC’s RE-thinking 2050).

70

Carbon dioxide savings

An off-grid solar system which replaces a typicaldiesel unit will save about 1 kg of CO2 per kilowatthour of output. The amount of CO2 saved by grid-connected PV systems depends on the existingenergy mix for power generation in differentcountries. The global average figure is taken as 0.6kg of CO2 per kilowatt-hour.

Over the whole scenario period it has beenassumed that PV installations will save, onaverage, 0.6 kg of CO2 equivalent per kilowatt-hour. This takes into account emissions during thelifecycle of the PV system of between 12 and 25g of CO2 equivalent per kWh.

Employment generated

On average, 30 full-time equivalent (FTE) jobs arecreated for each MW of solar power modulesproduced and installed. While there arediscrepancies between countries, betweencompanies and between technologies, it is a usefulestimate that represents a world-wide average.

The figure for employment takes into account thewhole PV value-chain including research centres,installers, and producers of silicon, wafers, cells,modules and other components. The figure doesnot take into account the jobs lost in theconventional energy sector. This depends on theenergy mix in each country. A reasonabledecrease is around 20 FTE per installed MW in2050. Maintenance jobs are expressed separatelyin the scenarios.

Capacity factor

The capacity factor for PV technology expresseshow much of the Sun’s energy is converted intoelectrical energy for PV. This is estimated to growfrom around 12 to 17% by 2050 in both theParadigm Shift and Advanced scenarios. Theestimate takes into account all technologies, notonly the most advanced ones. It assumes areasonable penetration of more efficienttechnologies in the coming decades. However, theestimate is reasonably conservative consideringhow fast technologies are actually evolving and thearrival of concentrator photovoltaic (CPV) in regionswith more Sun than in the current PV markets.

Learning curve

In the last 30 years, PV costs have dropped bymore than 20% with each doubling of theproduction capacity. The rate of cost reduction willprobably not be as strong in the coming decade.In the Paradigm Shift and Advanced scenarios weconsider a reduction of 18% from 2020, 16% from2030 and 14% from 2040 to 2050.

Cost of PV systems

PV markets in many countries are not yet mature.However prices today in Germany reflect thereasonable minimum prices that could be reachedin other parts of the world. The outlook considersthose prices, starting from an average €2.80/Wpin 2010 for PV systems. By mid-2010 one couldfind prices as low as €2.20/Wp for large ground-mounted systems in some countries. Costs willdecrease with volume of production. Prices woulddecrease faster in the Paradigm Shift scenario thanin the Accelerated scenario.

“On average,30 full-timeequivalentjobs arecreated foreach MW ofsolar powermodulesproducedandinstalled.”

71

Solar powermarketS

5

“Supportingthedevelopmentof PV is aninvestmentthat will yieldimportantpositivereturns for theeconomy.”

The SET For 2020 study: Photovoltaic electricity, a mainstream power source in Europe by 2020

Published by EPIA in 2009, SET For 2020 outlines how photovoltaics (PV) can become amainstream energy supplier in Europe by 2020. The study provides a unique, wide-rangingcombination of facts, figures, analysis and findings. SET For 2020 is indispensable for anyone withan interest in the future of the European energy market. It contains an intensive and broad-basedanalysis of existing data as well as interviews with around 100 key people in industry, researchinstitutes, utilities, regulatory agencies and governments across Europe and other parts of theworld. The study concludes that boosting photovoltaic electricity’s share of energy market will yieldhuge benefits to European society and its economy. This requires the active support of policymakers, regulators and the energy sector at large.

Among the findings:

• Europe needs to dramatically increase the share of PV to meet its 20/20/20 energy goals.

• A 12% market share for PV in Europe is a demanding, but achievable and desirable objective.

• Supporting the development of PV is an investment that will yield important positive returnsfor the European economy.

• The deeper and earlier the penetration of PV, the greater the net benefits.

• Mass penetration of PV will support European competitiveness, employment and energysecurity of supply.

• PV is the fastest-growing renewable energy technology, and costs are expected to dropfaster than those of other electricity sources.

• By the end of 2020, PV can be competitive in as much as 75% of the European electricity market.

www.setfor2020.eu

Polycrystalline siliconsystem integrated on afaçade,St. Moritz,Switzerland.

72

5.3. Key results

a. Global scenario

At the end of 2009 the world had 23 GW ofinstalled PV electricity. By 2020, we could see aGlobal installed capacity of:

• 345 GW in the Accelerated scenario

• 688 GW with an achievable Paradigm Shiftscenario.

By 2030, there could be around 1,082 GW and1,845 GW of clean PV energy installed under thetwo scenarios respectively. After a decade, theinitial rate of growth would slow down, taking intoaccount repowering from 2025-2030 onwards.

Even with slower growth after 2030, the worldshould still reach impressive levels of solar power globally.

“By 2050,under aParadigmShift scenariothere couldbe over 4,500GW of PVinstalledworld-wide.”

FIGURE 34 EVOLUTION OF CUMMULATIVEINSTALLED CAPACITY BY REGION UNDER TWO SCENARIOSMW

OECD PACIFIC

AFRICA

MIDDLE EAST

CHINA

INDIA

DEVELOPING ASIA

LATIN AMERICA

NORTH AMERICA

TRANSITION ECONOMIES

EUROPE

source: Greenpeace/EPIA Solar Generation VI, 2010.

2050

2045

2040

2035

2030

2025

2020

2015

2010

2050

2045

2040

2035

2030

2025

2020

2015

2010

5,000,000

4,500,000

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

Accelerated scenario

5,000,000

4,500,000

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

Paradigm shift scenario

73

Solar powermarketS

5

“About 250GW of PVcould beinstalledannually fromthe year2040.”

2050

377,263

562

2,988,095

4,450

4,669,100

6,747

2040

268,893

377

2,013,434

2,822

3,255,905

4,337

2030

155,849

205

1,081,147

1,421

1,844,937

2,266

2020

76,852

94

345,232

423

737,173

904

2015

52,114

55

125,802

132

179,442

189

2010

30,261

32

34,986

37

36,629

39

2009

22,999

24

22,999

24

22,999

24

2008

15,707

17

15,707

17

15,707

8

2007

3

0

3

0

3

0

MW

TWh

MW

TWh

MW

TWh

Reference

Accelerated

Paradigm

TABLE 16WORLD-WIDE CUMULATIVE PV INSTALLED CAPACITY AND PRODUCTION TO 2050 USING THE REFERENCE, ACCELERATED AND PARADIGM SHIFT SCENARIOS

2009

300,000

250,000

200,000

150,000

100,000

50,000

02010

2015

2020

2030

2040

2050

FIGURE 36 ANNUAL MARKET TO 2050 UNDER THREE SCENARIOSMW

Annual Installation

2010

5,000,000

4,500,000

4,000,000

3,500,000

3,000,000

2,500,000

2,000,000

1,500,000

1,000,000

500,000

0

2020 2030 2040 2050

REFERENCE SCENARIO

ACCELERATED SCENARIO

PARADIGM SHIFT SCENARIO

FIGURE 35TOTAL OF WORLD CUMULATIVE PV INSTALLED CAPACITY UNDER THREE SCENARIOS MW

source: Greenpeace/EPIA Solar Generation VI, 2010.

source: Greenpeace/EPIA Solar Generation VI, 2010.

REFERENCE SCENARIO

ACCELERATED SCENARIO

PARADIGM SHIFT SCENARIO

source: Greenpeace/EPIA Solar Generation VI, 2010.

74

b. Regional development

Europe will continue to lead the PV world until2020 under the Accelerated and Paradigm Shiftscenarios. By this date, North America will havedeveloped enough capacity. China’s capacityshould be 29 GW in the Accelerated scenario,however, it could almost double that figure (38GW) in the Paradigm Shift scenario.

The real take-off for non-western regions willhappen during the period from 2020 to 2030.China and India both have massive potential forgrowth during this timeframe.

“Europe willcontinue tolead the PVworld until2020.”

Reference Scenario

2020

2030

Accelerated Scenario

2020

2030

Paradigm Shift Scenario

2020

2030

OECDEurope

30

38

140

280

366

631

TransitionEconomies

0

0

1

20

3

42

OECDNorthAmerica

16

37

77

285

145

460

LatinAmerica

1

3

9

47

15

66

DevelopingAsia

2

11

19

70

24

83

India

1

4

20

71

33

113

China

8

25

29

150

38

242

MiddleEast

1

4

3

30

11

47

Africa

4

15

16

62

21

85

OECDPacific

13

19

31

64

33

77

Total

77156

3451,081

6881,845

TABLE 17PV INSTALLED CAPACITY EVOLUTION BY REGION UNTIL 2030GW

source: Greenpeace/EPIA Solar Generation VI, 2010.

Erlasee Solar Park, one ofthe largest tracking PVsolar power station in the world.

75

Solar powermarketS

5

The solar market has initially grown in developedcountries; however it is expected to shift todeveloping countries in the coming decades. After2020, North America, China and India will drive thePV market. After 2030, Africa, the Middle East andLatin America will also provide very significantcontributions. Grid connected systems willcontinue to dominate the market in developedcountries. In developing countries PV will beintegrated into the electricity network in towns andcities, while off-grid and mini-grid installations areexpected to play an increasing role in Asian andAfrican countries to power remote villages.

Solar electricity is an efficient way to get power topeople in developing countries, especially inregions with lots of Sun. While a standardhousehold of 2.5 people in developed countriesuses around 3,500 kWh annually, a 100 Wpsystem (generating around 200 kWh in a countryfrom the “Sunbelt”) in developing countries cancover basic electricity needs for 3 people perhousehold. In Europe, the generation of 500 TWhof electricity would mean delivering electricity to357 million of Europeans at home. In the non-industrialised world, each 100 GW of PV installedfor rural electrification can generate electricity for 1billion people.

“The solarmarket isexpected toshift todevelopingcountries inthe comingdecades.”

FIGURE 37 REGIONAL DEVELOPMENTLINKED TO PV EXPANSIONUNDER THREE SCENARIOS %

2030PARADIGM SHIFT SCENARIO

2020

2030

ACCELERATED SCENARIO

2020

2030

REFERENCE SCENARIO

2020

25% EUR12% PAC

18% PAC

10% AFR

5% AFR2% ME1% ME16% CHI11% CHI

1% IND2% DA2% LA

2% IND7% DA

39% EUR

21% NA

0% TE

24% TE

0% NA

2% LA

26% EUR6% PAC6% AFR9% PAC3% ME5% AFR1% ME

8% CHI14% CHI

6% IND

6% DA3% LA7% IND

6% DA4% LA

40% EUR

22% NA

2% TE

0% TE

26% NA

34% EUR4% PAC5% AFR3% ME5% PAC3% AFR2% ME5% CHI13% CHI5% IND4% DA

2% LA

6% IND

4% DA

4% LA

53% EUR

0% TE

2% TE21% NA

25% NA

EUR: EUROPE

TE: TRANSITION ECONOMIES

NA: NORTH AMERICA

LA: LATIN AMERICA

DA: DEVELOPING ASIA

IND: INDIA

CHI: CHINA

ME: MIDDLE EAST

AFR: AFRICA

PAC: PACIFIC

source: Greenpeace/EPIA Solar Generation VI, 2010

76

Electricity production

The share of PV in the electricity market will dependon what happens to electricity consumption in lightof global efforts to reduce greenhouse gasemissions. PV could provide as much as 11.3% to21.2% of electricity demand by 2050.

By 2020, the penetration of PV in the worldelectricity market could reach a global average of3.9%. However, in Europe the share could be upto 12% in a Paradigm Shift scenario.

“PVelectricitycould provideover one fifthof the globalelectricitydemand by 2050.”

Reference Solar market growth - IEA Projection

Solar power penetration of World’s electricity in % - Reference (IEA Demand Projection)

Solar power penetration of World’s electricity in % - Energy [R]evolution (Energy Efficiency)

Accelerated Solar Market growth

Solar power penetration of World’s electricity in % - Reference (IEA Demand Projection)

Solar power penetration of World’s electricity in % - Energy [R]evolution (Energy Efficiency)

Paradigm Shift Solar Market Growth

Solar power penetration of World’s electricity in % - Reference (IEA Demand Projection)

Solar power penetration of World’s electricity in % - Energy [R]evolution (Energy Efficiency)

%

%

%

%

%

%

2010

0.2

0.2

0.2

0.2

0.2

0.2

2020

0.4

0.4

1.9

2.0

4.0

4.2

2030

0.7

0.8

4.9

5.7

7.8

9.1

2040

1.1

1.3

8.2

10.1

12.6

15.5

2050

1.4

1.8

11.3

14.0

17.1

21.2

source: Greenpeace/EPIA Solar Generation VI, 2010

2010 2020 2030 2040 2050

24

21

18

15

12

9

6

3

0

PARADIGM SHIFT SCENARIO - ENERGY [R]EVOLUTION(ENERGY EFFICIENCY)

PARADIGM SHIFT SCENARIO - REFERENCE(IEA DEMAND PROJECTION)

ACCELERATED SCENARIO - ENERGY [R]EVOLUTION (ENERGY EFFICIENCY)

ACCELERATED SCENARIO - REFERENCE(IEA DEMAND PROJECTION)

REFERENCE SCENARIO - ENERGY [R]EVOLUTION (ENERGY EFFICIENCY)

REFERENCE SCENARIO - REFERENCE (IEA DEMAND PROJECTION)

FIGURE 38AMOUNT OF SOLAR PV ELECTRICITYAS A PERCENTAGE OF WORLD POWER CONSUMPTION%

77

Solar powermarketS

5

c. Employment and investment

As mentioned, 30 FTE jobs are created for eachMW of solar power modules produced andinstalled. Using this assumption, more than228,000 people are employed in the solar energysector in 2009. Using the Reference scenario, thisfigure would fall to around 136,000 jobs in 2015,and rise to 187,000 in 2020 and reach almost509,000 by 2030.

In the Accelerated scenario, the solar electricitysector would become a powerful jobs motor,providing green-collar employment to almost 1.7million people by 2020 and 2.63 million by 2030.

The Paradigm Shift scenario would seeemployment levels in solar electricity as high as1.37 million as early as 2015, rising to 3.78 millionin 2020 and 3.55 million in 2030.

In terms of global investment, the PV industry couldattract €79 billion per year in 2020, increasing to€93 billion in 2030 under the Acceleratedscenario. With a Paradigm Shift, investment in theworld’s PV electricity market would attractinvestment of €129 billion a year by 2020. Thescenario foresees that this would level off over thenext two decades, reaching €149 billion per yearin 2050.

“Over 3.5 millionpeople couldbe employedin the PVsector in2030.”

Reference Scenario

Annual Installation MWCost €/kWInvestment € billion/yearEmployment Job/year

Accelerated Scenario

Annual Installation MWCost €/kWInvestment € billion/yearEmployment Job/year

Paradigm Shift Scenario

Annual Installation MWCost €/kWInvestment € billion/yearEmployment Job/year

2008

4,9403,000

15156,965

4,9403,000

15156,965

4,9403,000

15156,965

2009

7,2622,900

21228,149

7,2622,900

21228,149

7,2622,900

21228,149

2010

7,5502,800

14237,093

12,0912,800

34374,319

13,6252,500

34417,010

2015

4,1172,351

12136,329

27,0911,855

50810,228

47,0001,499

701,372,185

2020

5,9202,080

13187,464

59,0311,340

791,690,603

135,376951129

3,781,553

2030

18,7401,703

27508,944

96,17196693

2,629,968

136,833 744100

3,546,820

2040

19,9281,487

30476,114

162,316826134

4,027,349

250,000645161

5,563,681

2050

20,1291,382

28692,655

174,796758133

4,315,343

250,000596149

5,346,320

TABLE 18INVESTMENT AND EMPLOYMENT POTENTIAL OF SOLAR PV

source: Greenpeace/EPIA Solar Generation VI, 2010.

Worker installing PVmodule, Wesco court,Woking, UK.

78

d. CO2 reduction

Tackling climate change using PV

Under the Paradigm Shift scenario, up to 4,047million tonnes of CO2 equivalent would be avoidedevery year by 2050. The cumulative total from 2003to 2050 would represent up to 65 billion tonnes of

CO2 equivalent saved. There is no doubt that PVcan be an efficient tool to replace conventionalpower generation and fight climate change.

“PV couldsave over 4 billiontonnes of co2equivalent inthe year2050.”

2008

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

2009

2010

2015

2020

2025

2030

2035

2040

2045

2050

REFERENCE SCENARIO

ACCELERATED SCENARIO

PARADIGM SHIFT SCENARIO

FIGURE 39 ANNUAL CO2 REDUCTIONMILLION TONNES CO2

2008

2009

2010

2015

2020

2025

2030

2035

2040

2045

2050

60,000

50,000

40,000

30,000

20,000

10,000

0

FIGURE 40CUMULATIVE CO2 REDUCTIONMILLION TONNES CO2

Reference Scenario

CO2 reduction (with 600gCO2/kWh) [annual Mio tCO2]

Avoided CO2 since 2003 [cummulative Mio tCO2]

Accelerated Scenario

CO2 reduction (with 600gCO2/kWh) [annual Mio tCO2]

Avoided CO2 since 2003 [cummulative Mio tCO2]

Paradigm Scenario

CO2 reduction (with 600gCO2/kWh) [annual Mio tCO2]

Avoided CO2 since 2003 [cummulative Mio tCO2]

source: Greenpeace/EPIA Solar Generation VI, 2010.

source: Greenpeace/EPIA Solar Generation VI, 2010. source: Greenpeace/EPIA Solar Generation VI, 2010.

2008

10

35

10

61

5

56

2009

15

50

15

75

15

70

2010

19

69

20

95

20

90

2015

33

208

73

327

113

404

2020

57

438

254

1,160

540

2,014

2030

123

1,300

853

6,580

1,358

11,085

2040

226

3,031

1,693

19,153

2,603

30,559

2050

337

5,911

2,670

41,460

4,047

64,890

REFERENCE SCENARIO

ACCELERATED SCENARIO

PARADIGM SHIFT SCENARIO

79

Solar benefitS and SuStainability 6

Support schemes benefits

The Feed-in Tariffs received by PV plant owners area benefit to them. The overall costs for the Feed-inTariffs are usually rolled over to final electricityconsumers and included in their electricity bills. Inpractice, Feed-in Tariffs are thus creating an incometransfer from the whole society to people thatdecided to invest in PV. As such, their net effect onsociety is neutral

A study investigating the effect of the Feed-in Tariffcost on the electricity price in Germany wasconducted by Phoenix Solar AG with the consultingfirm A. T. Kearney. It shows that the net effect of thepenetration of PV on the electricity price in Germanyis about 1.28€ct/kWh. This represents about 5%of the current electricity price (23.7€ct/kWh).

Reduction of greenhouse gas emissions

The cost of greenhouse gas emissions from powergeneration can be easily decreased using PV. Themanufacturing of PV systems emits between 15 gand 25 g of CO2-equivalent per kWh, to becompared with the average 600g that each kWhproduced in the world emits. And during theiroperational lifetime, PV systems do not emit anygreenhouse gases. Moreover, the carbon footprintof PV systems is decreasing every year. Currently,the external costs to society incurred from burningfossil fuels are not included in electricity prices.

In Europe 1.2 €ct can be saved for each kWhproduced by PV electricity. On a world-wide basisthe current electricity mix is even more carbonintensive than in the European Union, whichmeans that savings on a global scale will be evenlarger. It can be assumed that with the currentglobal electricity mix more than 600g/kWh CO2

equivalent emissions are emitted. The value ofavoided emissions by PV on a world-wide scalecan be therefore as high as 2.3€ct/kWh.*

80

6. Solar benefitS and SuStainability

Sustainable development can be described as a“development that meets the needs of the presentwithout compromising the ability of futuregenerations to meet their own needs”37. Theconcept of sustainability is based on three pillars:social, environmental and economic sustainability.This chapter summarises how the benefits of PV electricity can contribute to each of these three pillars.

6.1. Economic benefits

Apart from being a clean and reliable source ofelectricity, PV generates a number of economicbenefits for the entire society. The SET For 2020study has analysed the net economic benefits ofPV to society for the European Union.

Figure 41 illustrates the benefits of PV in Europeexpressed in €ct/kWh as calculated in the study.All contributing factors are shortly explained below including the cost of Feed-in Tariffs. It demonstrates that Feed-in Tariffs generate more benefits than what they cost initially toelectricity consumers38.

“PVelectricitygenerates anumber ofeconomicbenefits forthe entiresociety.”

FIGURE 41DEFINITION OFSUSTAINABILITY

SOCIAL

BEARABLE EQUITABLE

SUSTAINABLE

VIABLE

ENVIRONMENT ECONOMIC

source: IUCN – The Future of Sustainability: Re-thinking Environment and Development in the Twenty-first Century, 2006.

* Assumption on the price of carbon dioxide emissions from fossilfuels: 38€/tonne CO2.

81

Solar benefitS andSuStainability

6

Reduction of grid losses

PV can be considered as a distributed anddecentralised source of energy. Producingelectricity near the place where it is consumedimplies a reduction in the distribution andtransmission losses (costs) which are linked to thedistance between the point of generation and thepoint of use. The SET For 2020 study shows thatwith the avoidance of grid losses in Europe, theadded value of PV would be of 0.5€ct/kWh.

Energy security (hedging value)

Once installed, a PV system will produce electricity forat least 25 years at a fixed and known cost.Conventional power plants must deal with fluctuatingprices for fossil fuels such as oil, gas or coal on theinternational markets. The certainty of beingindependent from such fluctuations has been valuedfor Europe at 1.5 to 3.1€ct/kWh depending on theassumptions of the oil, gas and coal prices evolution.

Operating reserve

PV requires additional operating reserves to ensurethe full reliability of PV electricity systems. This costis due to the variable nature of PV electricityproduction and is well-known. In Europe, theadditional balancing cost linked to PV operatingreserves has been evaluated around 1€ct/kWh.

Lost margins for utilities

Every kWh of PV is produced by a PV plant owneror an Independent Power Producer (IPP) insteadof a traditional utility. Therefore, margins of utilitieswill definitely shrink because of PV. In Europe, thiseffect has been quantified to be approximately0.6€ct/kWh.

However, this offers also opportunities for utilitiesas they will have to adapt their business modelstransforming into new generation utilities that cantake up important tasks in the future electricitygrids as aggregators, facilitators and networkservice providers.

There are a couple of additional benefits related toPV, apart from those mentioned above. However,it is less straightforward to measure them, as aclear calculation base is lacking.

Industry development

PV requires industrial capacity: raw materialproviders; module manufacturers; machinery andequipment providers; installers; and other serviceslinked to the electricity system. This generatesadded value for the community; not only in termsof jobs, but also in terms of industrial development,and business generation.

Moreover, PV contributes to the structural changeneeded to build an efficient and distributed energyworld. PV enables the development of smart gridtechnology and integrated, innovative applications,such as electric vehicles and energy-positivebuildings. It also contributes to the enhancementof competition in the currently rather concentratedpower generation market.

“PVcontribute toreduce gasemissions ,grid lossesand increaseenergysecurity, allthesebenefitsshould bequantified.”

ELECTRICITY PRICE - LCOE

400

350

300

250

200

150

100

50

0

FIGURE 42EXAMPLE OF CUMULATIVEBENEFITS OF PV (EUROPE,SET FOR 2020 PARADIGMSHIFT SCENARIO).€Bn

source: EPIA, Set for 2020, 2009.

high case 195

high case 262

87

REDUCED CO2

76

GRID LOSSES

32

HEDGING VALUE

95

OPERATING RESERVE

63

LOST MARGINS

35

NET BENEFIT

low case 192

82

Clean and democratic investment

PV can be an alternative, democratic and low-riskinvestment for all PV plant owners. Instead of investingdirectly in non-transparent financial funds, PV offersclean and sustainable investment opportunities.

Effects on the electricity generation cost

PV influences the electricity spot prices duringperiods of peak demand. The spot price forelectricity is the highest during such periods.Electricity network operators typically run specialpower plants during peaks to meet demand.Investing in and operating these highly flexible plantsis an expensive practice. As in many countries mostof the PV electricity is generated during the periodsof high demand, PV electricity generation helpsshave the peak-load, thus reducing spot prices. Thehigh correlation between PV generation and pricesof electricity on the spot market39 is a reality, as seenwith the German electricity market. In other words,PV lowers the generation cost of electricity.

Value of PV electricity production after the period of support

Feed-in Tariffs are normally granted for a period of20 years. However, PV modules can generateelectricity for at least 25 years. Experiments haveeven shown that over 30 years of lifetime isfeasible. Therefore, PV systems will generate freeelectricity during a period of at least 5 years afterthe end of the support schemes payment period.

6.2 Environmental factors

a. Climate change mitigation

The damage we are doing to the climate by usingfossil fuels (i.e. oil, coal and gas) for energy andtransport is likely to destroy the livelihoods of millionsof people, especially in the developing world. It willalso disrupt ecosystems and significantly speed upthe extinction of species over the coming decades.

International Climate Policies

Recognising these threats, the signatories to the1992 UN Framework Convention on ClimateChange (UNFCCC) agreed the Kyoto Protocol

in 1997. The Protocol finally entered into force inearly 2005 and since then its member countriesmeet twice annually to negotiate further refinementand development of the agreement. Only one majorindustrialised nation, the United States, has notratified the agreement made in Kyoto.

The Kyoto Protocol commits its signatories to reducetheir greenhouse gas emissions from their 1990 levelby 5.2% by the target period of 2008-2012. Nationsand regions have adopted a series of reductiontargets in order to meet their obligations under theProtocol. In the European Union, for instance, thecommitment is to an overall reduction of 8%. To helpget there, the EU has agreed to increase its proportionof renewable energy from 6 to 12% by 2010.

International climate negotiations have entered adifficult stage following the Copenhagen ClimateConference (COP 15) which failed to deliver thelegally binding international treaty. The treaty wouldbe crucial in providing investment security and a cleardirection for the green transformation of the worldeconomy. The Copenhagen Accord, a non-bindingletter of political intentions, contains a number ofprovisions on mid-term targets for developedcountries as well as mitigation actions by developingcountries. Furthermore, it contains provisions forfinancial and technological support for developingcountries carrying out actions combating climatechange. However, the international community is stillin search of an internationally accepted formula onhow these provisions are to be carried out.

The sixteenth Conference of the Parties (COP 16)took place in Cancun from 29 November to 10December 2010. After two weeks of talks led by theskilful chairmanship of the Mexican government,delegates at the United Nations Climate ChangeConference delivered a balanced package ofdecisions on adaptation, mitigation technologytransfer and finance. The deal reached in Cancunwas not rich in content, rather in confidence,especially towards the UNFCCC process. Still,governments have a strict work program ahead tofollow through on the Cancun Agreement in orderto reach a binding agreement in South Africa on2011, including major efforts to cut emissions tokeep the global temperature rise below 2 degrees,as well as securing fast track and long term financecommitments and the future of the Kyoto Protocol.

“PVinfluenceselectricityspot pricesresulting inlower overallelectricityprices.”

83

Solar benefitS andSuStainability

6

EPIA and Greenpeace believe that it is possible toreach a binding deal before the expiration of the endof the first commitment period of the Kyoto Protocol.Such an agreement will need to ensure thatindustrialized countries reduce their emissions onaverage by at least 40% by 2020, compared to their1990 levels. They will need to provide a further$140 billion a year in order to enable developingcountries to adapt to climate change, protect theirforests and achieve their part of the energyrevolution. On the other hand, developing countriesthemselves need to reduce their greenhouse gasemissions by 15%-30% with regards to their

“EPIA andGreenpeacebelieve that itis possible toreach abinding dealbefore theexpiration ofthe KyotoProtocol.”

Greenhouse Effect and Climate Change

The greenhouse effect is a natural process whereby the Earth’s atmosphere traps some of the Sun'senergy which then warms the planet and controls the climate. However, human activities whichproduce greenhouse gases have enhanced this effect, thereby artificially raising global temperaturesand disrupting our climate. Greenhouse gases include carbon dioxide - produced by burning fossilfuels and through deforestation; methane, -released from agriculture, animals and landfill sites; andnitrous oxide which comes from agricultural production and a variety of industrial chemicals.

The reality of climate change can already be witnessed in the disintegration of polar ice, thawingpermafrost, rising sea levels and fatal heat waves. It is not only scientists who are witnessing thesechanges. From the Inuit of the far north to islanders near the Equator, people are already strugglingwith impacts of climate change.

An average global warming of more than 2°C threatens millions of people with an increased risk ofhunger, disease, flooding in some areas and water shortages in others. Never before has humanitybeen forced to grapple with such an immense environmental crisis. If we do not take urgent andimmediate action to protect the climate, the damage could become irreversible. This can onlyhappen through a rapid reduction in the emission of greenhouse gases into the atmosphere.

If we allow current trends to continue some of likely effects are:

• Sea levels rising due to melting glaciers and the thermal expansion of the oceans as global temperatureincreases. Massive releases of greenhouse gases from melting permafrost and dying forests.

• A greater risk of more extreme weather events such as heat waves, droughts and floods.Scarily enough, the global incidence of drought has already doubled over the past 30 years.

• Severe regional impacts such as an increase in river flooding in Europe in addition to coastalflooding, erosion and wetland loss. Low-lying areas in developing countries such asBangladesh and South China could as well be severely affected by flooding.

• Severe threats to natural systems, including glaciers, coral reefs, mangroves, alpineecosystems, boreal forests, tropical forests, prairie wetlands and native grasslands.

• Increased risk of species extinction and biodiversity loss.

The greatest impacts will be on poorer countries in sub-Saharan Africa, South and Southeast Asiaand Andean South America as well as small islands least able to protect themselves from increasingdroughts, rising sea levels, the spread of disease and a decline in agricultural production.

projected growth by 2020 and raise their mitigationambitions through the Nationally AppropriateMitigation Actions (NAMAs). NAMAs is a vehicle forthe emission reduction actions in developingcountries as foreseen in the Bali Action Plan.Thereby a joint commitment from developed anddeveloping economies is needed to limit the growthof greenhouse gas emissions. This is to be done bycomplying with legally binding emissions reductionobligations and adopting the necessary measuresto reduce the use of highly polluting technologieswhilst replacing fossil fuel dependency withrenewable energy sources.

84

Indeed, policy-makers need to ensure that thegreen industrial revolution happening in the energysector will accelerate in the coming decade and fullyharness the economic opportunities inherent to thepromotion of renewable energies. Photovoltaicenergy can play an important role in reducinggreenhouse gases while generating electricity andjobs on a global scale. Not only is the sun anunlimited fuel source, it also provides the cleanestform of energy available at any scale, large or small.The photovoltaic industry is ready to provide thetechnological solutions and capacity to supportclimate mitigation measures in developing anddeveloped countries alike. The obstacles continueto be political, not technical.

b. Energy payback time (EPBT)

The production of PV modules requires energy.The energy payback time (EPBT) indicates thenumber of years a PV system has to operate tocompensate for the energy it took to produce,install, dismantle and recycle. The EPBT dependson the level of irradiation (in sunny areas likesouthern Europe the EPBT is shorter than in areaswith relatively low solar irradiance), the type ofsystem (integrated or not, orientation, inclination)and the technology (because of differentmanufacturing processes and different sensitivitiesto solar irradiation).

Figure 43 illustrates the EPBT for several PVtechnologies. The calculation assumes anirradiation of 1,700 kWh/m2/year (southern Europelevels) and that the system is installed on a rooftopbenefiting from optimal inclination. The data isextracted from the Ecoinvent database40, theworld’s leading database of consistent,transparent, and up-to-date life cycle inventory(LCI) data.

As shown in Figure 43, the production of Sifeedstock and ingot is quite energy intensive for c-Si technologies. Hence, new techniques havebeen developed to reduce energy consumptionduring these steps of the value chain. This will leadto further decreases in the EPBT of PV systems,improving their sustainability.

“The maindrivers toreduce theEPBT of PVsystems areto reduce,reuse andreplacematerialsused.”

EPBT for all PV systems

Operational lifetime of PV modules:

Production time for clean electricity:

1 to 3 years

25 years

(or even more)

22 to 24 years

(or even more)

TABLE 19GENERAL INDICATIVE ENERGY PAYBACK TIMES:

mono200814.0%

2.5

2.0

1.5

1.0

0.5

0.0multi200713.2%

ribbon200913.2%

a-Si20086.6%

CdTe200910.9%

µm-Si20088.5%

CIGS200911.0%

INGOT/CRYSTAL + WAFER

CELL

LAMINATE

MOUNTING & CABLING

INVERTER

TAKE BACK & RECYCLING

Si FEEDSTOCK

FIGURE 43PAY-BACK TIME FOR SEVERAL PV TECHNOLOGIES IN THE SOUTH OF EUROPE

source: Wild-Scholten (ECN) Sustainability: Keeping the Thin Film Industry green, 2nd EPIAInternational Thin Film Conference Munich, 2009.

source: EPIA.

EPBT in years

glass-EVA-backsheet glass-EVA-glass

glass-PVB-glass

85

Solar benefitS andSuStainability

6

c. Water consumption

The world’s population could grow byapproximately 25% (from 6 to 8 billion people) by2030. The demand for water will also increase, buteven by about 30%.

Unlike other technologies, PV systems do notrequire water during their operation. This makes PVa sustainable electricity source in places wherewater is scarce.

Some water is used during the productionprocess. Approximately 85% of it is used formaterial extraction and refinement, while moduleassembly (manufacturing wafers, cells andmodules) accounts for the remaining 15%.

Most of the water indirectly used for PV productioncomes from the electricity consumption of PVfactories: conventional power generation useswater, amongst others, for cooling. Hence, anincreased share of PV in the electricity mix wouldlower the water requirements during the productionprocess of PV modules. Moreover, even whilewater needs for PV are already lower than for otherpower generation technologies, the industry isworking continuously to reduce water consumptionduring the manufacturing process.

d. Recycling

PV modules are designed to generate clean,renewable energy for at least 25 years. The firstsignificant PV systems were installed in the early1990s. Full-scale end-of-life recycling is stillanother ten years away. The PV industry is workingto create solutions that reduce the impact of PV onthe environment at all stages of the product lifecycle: from raw material sourcing through end-of-life collection and recycling.

In 2007, leading manufacturers embraced theconcept of producer responsibility and establisheda voluntary, industry-wide take-back and recyclingprogramme. Now up and running, the PV CYCLEassociation (www.pvcycle.org) is working towardsgreater environmental sustainability.

PV CYCLE's more than 100 members representover 85% of the total European PV market. Theyhave agreed to implement the collection andrecycling system developed by PV CYCLE, whichwill be operational soon.

Recycling technologies exist for almost all types ofphotovoltaic products and most manufacturers areengaged in recycling activities.

The environmental benefits and burdens ofrecycling have been assessed through theChevetogne (Belgium) recycling pilot project. Theproject shows that the environmental benefits ofrecycling clearly outnumber the additionalenvironmental burdens (heat, chemical treatmentto recover the basic materials enclosed in themodules) that recycling of the modules demands.

“The PVindustry isworking to createsolutions thatreduce theimpact of PV on theenvironmentat all stagesof theproduct life cycle.”

The main drivers for further reductionof the EPBT are:

• Reduce: using less materials (for example by reducing the thickness of the silicon wafers)

• Re-use: recycling of materials

• Replace: using materials that generateless CO2.

Higher system efficiencies for converting solarenergy into electricity and continuousimprovements in the manufacturing processeswill contribute to further decrease the EPBT.

For moore information: www.pvcycle.org

86

6.3. Social aspects

a. Employment

Close to 220,000 people were employed by thesolar photovoltaic industry at the beginning of2010. This number includes employment along theentire value chain world-wide: production of PVproducts and equipment needed for theirproduction, development and installation of thesystems, operation and maintenance as well asfinancing of solar power plants and R&D.

While manufacturing jobs could be concentrated insome global production hubs, the downstreamjobs (related to installation, operation and

maintenance, financing and power sales) are, forthe moment, still mainly local.

The market expectations for 2010 show thatinstallations could double. This could bring thenumber of people employed by the PV industryaround the world to more than 300,000.

b. Skilled labour and education

PV will provide an increasing number of jobs duringthe next decades. However, the need for qualityinstallations calls for skilled labour and appropriateeducation.

“Manufacturingjobs areconcentratedin some globalproductionhubs whiledownstreamjobs aremainly local.”

Qualifications required will vary, but some of the most relevant qualificationsaccording to the steps of the PV value-chain are the following:

• Solar module production: Skilled staff with a clear background in chemistry, physics orrelated academic studies with a great level of specialisation and knowledge in the PV sector.

• PV system integrators: Technicians for the integration of roof-top mounted systems andengineers for the integration of ground-mounted systems. In addition, highly skilled staff isrequired to provide services such as management, contracting, design and marketing.

• Installation: Qualified and certified installers. Ideally; electricians, roofers, plumbers and otherconstruction workers are to bring their knowledge together in a new kind of job descriptionwhich could be called “solar installer”.

• Operation and maintenance: No academic or scientific background required.

• Recycling of PV modules: Qualified and trained staff in chemistry, physics or relatedacademic studies and with a clear understanding of recycling issues in relation to solar cells,silver, glass, aluminium, foils, electrical components, copper and steel components.

• Research and development: Experienced scientists and engineers with a high level ofspecialisation in PV.

Capacity building is needed at all levels of education to meet the labour demand. Hence,appropriate programmes and measures are needed from education institutions. They should:

• Strengthen and adapt the quality of their current curriculum: Academics and techniciansattending the courses need to acquire a high level of specialisation.

• Increase considerably the offer for specific courses in PV: This will be necessary to meetdemand for 50,000 new direct jobs created annually between 2006 and 2030.

PV education should ideally be provided in the form of a specialised PV Masters degree, oras additional post-graduate training in photovoltaic energy.

Experts highlight the importance of early practical training in PV. Project-oriented education,external trainings in the industry, and/or lab courses where practical experience can beobtained, are strongly encouraged.

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Solar benefitS andSuStainability

6

6.4. Rural electrification

While we advocate for a clean power to alleviateclimate change, it is important to recognise thatmany parts of the world operate with no electricityat all. Solar can help address this, in a moresustainable way than fossil fuel power does.

There are three options available to bring electricityto remote areas:

1. Extend the national grid

2. Provide off-grid technologies

3. Create mini-grids with hybrid power

Extension of the national grid

The huge cost of infrastructure and extrageneration capacity prevents many countries fromdeveloping their national grids. The demand forelectricity in cities is growing due to the increasein population, creating conflicts with utilities thatneed to stabilise the grid and follow the demand.

According to the World Bank, grid extension pricescan vary from $6,340/km in densely populatedcountry such as Bangladesh to $19,070/km incountry like Mali42), making grid extension a difficultand expensive choice.

Off-grid solutions

Off-grid power generation using renewable energysources is becoming more competitive in remotecommunities. It does not suffer the power lossesthat come with long transmission lines. EnergyHome Systems (EHS) are designed to powerindividual households and are relatively cheap andeasy to maintain.

PV is probably the most suitable type oftechnology for EHS as shown by the hundreds ofthousands of solar home systems deployedaround the world. PV systems can cover theenergy needs of single households, publicbuildings and commercial units. In rural areas theycan replace the candles, kerosene and biomasstraditionally used for lighting and run otherapplications that are usually driven by dry-cellbatteries or diesel generators.

The main types of off-grid PV systems which havebeen widely tested world-wide are found in Table18 on the following page.

“Solar canhelp accessclean powerin nonelectrifiedparts of theworld.”

Energy and Equality

According to the IEA’s report on the world’s access to energy41, in 2008 approximately 1.5 billionpeople or 22% of the world’s population did not have access to electricity, with 85% of thosepeople living in rural areas. Energy alone is not sufficient to alleviate poverty; however, it is animportant step in any development progress. Access to electricity for significant amounts of peoplehelps towards a number of Millennium Development Goals (MDG), set by the United Nations. Thosegoals include:

• Reducing hunger by enabling cold food storage (MDG 1)

• Providing access to safe drinking water through pumping systems (MDG1)

• Improving education by providing light and communication tools (MDG2)

• Creating gender equality by relieving women of fuel and water collecting tasks (MDG3)

• Contributing to the reduction of child and maternal mortality, the incidence of disease and thefight against pandemics by providing refrigeration for medication as well as access to modernmedical equipment (MDG 4, 5 and 6)

• Using environmentally sound technologies to provide electrical connections in order tocontribute to global environmental sustainability (MDG 8).

88

New generation of Pico PVsystems (PPS)

• Used for small loads like highly-

efficient LED lamps

• Powered by a small solar panel

and uses a battery which is often

integrated into the lamp itself

• Provides a power output of 1 to

10 W, mainly used for lighting

and to replace unhealthy and

inefficient sources

• Depending on the model,

can also charge small

applications such as mobile

phones and radios

• User-friendly interface, easy

plug-and-play installation, and

low investment and

maintenance costs.

Classical Solar Home Systems (SHS)

• Generally cover a power output

of up to 250 W.

• Normally composed of several

independent components such

as modules, charge controller

and the battery

• Technologically mature, has

been used for decades and

offers more power output than

Pico systems

• Long-term, reliable source of

power for households.

• Limited by the need for energy

storage which is difficult to

improve later.

• Require a trained technician

for optimum installation and

maintenance.

Solar Residential Systems (SRS)

• Off-grid systems with output

up to 2,000 W

• Usually include a converter,

which allows the use of AC

loads and usually supply public

services or companies

• Represent flexible, scalable

and adaptable solutions

• Stand-alone off-grid PV

systems primarily provide

electricity for small loads

and are not always in use

to supply motive

TABLE 20MAIN TYPES OF OFF-GRID PVSYSTEMS WHICH HAVE BEENWIDELY TESTED WORLD-WIDE

FIGURE 44 PICO POWER SYSTEM

source: Phaesun.

source: Alliance for Rural Electrification.

ULITIUM 200

STV

HUB4 JUNCTION BOX

PHOTOVOLTAICMODULES

FIGURE 45 SOLAR HOME SYSTEM

source: Phaesun.

PHOTOVOLTAICMODULES

SOLAR CHARGECONTROLLER

+ –BATTERY

DC LOAD

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Solar benefitS andSuStainability

6

Mini-grid combined with hybrid power

The third approach is a combination of the firsttwo, providing local grids powered by more thanone source of generation. PV plays a tremendousrole to rural electrification within this approach.

Centralised electricity generation at the local levelcan power both domestic appliances and localbusinesses using village-wide distributionnetworks. They can be driven by fossil fuel orrenewable energy sources, or by a combination ofboth. Backup systems (genset) or battery storagecan complement the installation.

Figure 49 shows a village grid that is supplied by ahybrid system. It uses different, but complementary,renewable energy technologies (RET), often with agenset backup and battery storage.

This solution offers many advantages, not only interms of cost, but also with regard to the availabilityof energy for small communities. It improves thequality of the electricity delivered and the reliabilityof the system compared to connections withfluctuating grids. It can be easily scaled up andintroduce a large percentage of clean energy intothe electricity generation mix. Finally, it can beconnected to the national grid when the gridreaches that location.

Competitiveness of renewable energy in developing countries

In many cases, off-grid renewable energy solutionsoffer the lowest generation costs for off-gridelectrification with a mini-grid.

If public money and support mechanisms can playan important role in accelerating energy accessand supporting renewable systems, somecompanies already develop and operate largesystems without any support, such as in Laos43 orGambia44. Off-grid renewables are not only a cleanand sustainable solution, but they are alsoeconomically sound.

Figure 47 shows the cost comparison of severalpower systems over 20 years, starting in 2010.While the investment in PV systems is higher thanin diesel generators, the cost evolution quicklyfavours the hybrid PV-Wind system.

“off-gridrenewableenergysolutionsoffer thelowestgenerationcosts for off-gridelectrificationwith a mini-grid.”

FIGURE 46 MINI GRID AND HYBRIDSYSTEM

source: Phaesun.

PHOTOVOLTAICMODULES

SOLAR CHARGE CONTROLLER

+ – + – + –BATTERIES

DC LOAD

AC LOAD

INVERTER

GENERATOR

0 2 4 6 8 10 12 14 16 18 20 year

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

FIGURE 47 COST COMPARISONS OF ENERGY POWERSYSTEMS ON A LIFECYCLE BASIS45

$US

DIESEL GENERATOR - 1.5 $US/L

DIESEL GENERATOR - 1.0 $US/L

DIESEL GENERATOR - 0.7 $US/L

HYBRID PV-WIND

source: the Alliance for Rural ElectrificationProjections made from a case study based inEcuador with real natural conditions.

90

Challenges

While renewable energy in off-grid and mini-gridsolutions is often the most competitive solution,major challenges exist which include:

• Complex financial and organisational questions

• Bottlenecks in the financing, management,business models, sustainable operations and maintenance

• Local social and economic conditions.

Solutions that are being tried and tested at theminute include:

• Providing stand-alone solutions such as solar home systems with micro credits or a fee for service

• Installing mini-grids via a different businessmodel, using capital subsidies and costrecovery via tariffs.

Policy changes are another challenge thatdeveloping countries have to face. Energy policiesare often short sighted. Many countries remainfocused on grid extension, urban electrification oron large hydro, gas or coal power plants withoutany long-term strategy for sustainability and supply.When demand outstrips supply, this approach iscostly (power shortages, losses for the economicsector) and shows how much diversified electricitygeneration capacities, especially in rural areaswhere off-grid technologies can bring reliableelectricity, is needed.

More information

The Alliance for Rural Electrification (ARE –www.ruralelec.org) is the key partner of EPIAregarding the development of off-grid PV indeveloping countries. ARE is the only renewableenergy industry association in the world exclusivelyworking for the development of off-grid renewableenergy markets in developing countries. Theyrepresent companies, organisations, researchinstitutes and unite all relevant private actors inorder to speak with one voice about renewableenergies in developing countries.“Long term

sustainableenergy policystrategies area keychallenge fordevelopingcountries.”

Solar helps provideaccess to energy.

More information: www.ruralelec.org

91

liSt of acronymS

liSt of acronymS

µc-Siacarea-SibapvbipvboScdScdtechpcigSciScpvc-SidcdSmdSodSSceceegehSepbdepbtepcepiaeStelaetSeueu-27eu-oeaevevaeweafitfteftSmftSmgaagdpgwieaiea-pvpS

liSt of figureS

micro-crystalline siliconalternating currentAlliance for Rural Electrificationamorphous siliconbuilding adapted photovoltaic system (built on top of a roof)building integrated photovoltaic system (forms part of a building)balance of systemcadmium sulphidecadmium telluridecombined heat and power (system)copper, indium, gallium, (di)selenide/(di)sulphidecopper, indium, (di)selenide/(di)sulphideconcentrating photovoltaiccrystalline silicondirect currentdemand-side managementdistribution system operatordye-sensitised solar cellsEuropean CommissionGerman Feed-in Lawenergy home systemEnergy Performance of Buildings Directive (EC)energy payback timeengineering, procurement and construction (of PV systems)European Photovoltaic Industry AssociationEuropean Solar Thermal Electricity AssociationEmissions Trading Scheme (EU)European UnionTwenty-seven member countries of the European UnionEuropean Ocean Energy Associationelectric vehicleethyl vinyl acetateEuropean Wind Energy AssociationFeed-in Tarifffull-time equivalentFiT Support MechanismFiT Support Mechanismgallium arsenidegross domestic productgigawattInternational Energy AgencyIEA Photovoltaic Power Systems Programme

92

irrJrckmkwkwhkwplcilcoemc-Simdgmetimwneanedoopvpacepc-Siphevp-n junctionppSpvpvbpvpSr&dr2rrecretrpSSet-planShSSmeSrStcotpvtSotwhunfcccv2gvppweo 2009wp

internal rate of returnEuropean Joint Research Centrekilometrekilowattkilowatt hourkilowatt-peak unitslife-cycle inventorylevelised cost of energymono-crystalline siliconMillennium Development Goals (UN programme)Ministry of Energy, Trade and Industry (Japan)megawattNational Energy Authority (China) New Energy and Industrial Technology Development Organisation (Japan)organic photovoltaicproperty-assessed clean energy programmephoto-crystalline (multi-crystalline) siliconpetrol-hybrid electric vehiclepotential difference junctionPico PV systemphotovoltaicpolyvinyl butyralSee IEA-PVPS.research and developmentroll-to-roll (manufacturing process)renewable energy creditrenewable energy technologyrenewable portfolio standardStrategic Energy Technology Plansolar home systemsmall- to medium-sized enterprisesolar residential systemtransparent conducting layerthermo-photovoltaicstransport system operatorterawatt hourUnited Nations Framework Convention on Climate Changevehicle to gridvirtual power plantWorld Energy Outlook 2009 (IEA report)watt-peak. A measure of the nominal power of a photovoltaic solar energy device

liSt of acronymS & referenceS

93

liSt of acronymS& referenceS

1. European Commission, Photovoltaic Geographical Information System (PVGIS): http://re.jrc.ec.europa.eu/pvgis2. Sunrise project/EPIA: www.pvsunrise.eu 3. Solar cell efficiency tables (version 36), Martin A. Green, ARC Photovoltaics Centre of Excellence ; Keith Emery, National Renewable Energy

Laboratory; Yoshihiro Hishikawa, National Institute of Advanced Industrial Science and Technology (AIST); Wilhelm Warta, Fraunhofer Institutefor Solar Energy Systems

4. Commercial status of Thin Film photovoltaic devices and materials, J. Schmidtke, Lux Research Inc5. The JRC ‘PV Status Report 2010’: http://re.jrc.ec.europa.eu/refsys/pdf/PV%20reports/PV%20Report%202010.pdf6. ENergy Focus : http://www.enf.cn/7. PV Cycle Association: www.pvcycle.org 8. Global Solar Photovoltaic Market Analysis and Forecasts to 2020 press release (March 13, 2009): http://www.prlog.org/10198293-global-

solar-photovoltaic-market-analysis-and-forecasts-to-2020.html9. World Energy Outlook: http://www.worldenergyoutlook.org/subsidies.asp 10. Reuters, December 201011. DLR/ISI "External costs of electricity generation from renewable energies compared with electricity generation from fossil fuels", 200612. ExternE, European Commission, www.externe.info 13. Source: c-Si roadmap, ITPV14. European Distributed Energy Partnership: www.eu-deep.com15. Das Regenerative Kombikraftwerk project: www.kombikraftwerk.de 16. ‘The Support Of Electricity From Renewable Energy Sources’, European Commission, 200517. Economies of scale are reducing the overall price.18. Effective and Efficient long-term oriented RE support policies, Mario Ragwitz, March 201019. PV LEGAL project: www.pvlegal.eu 20. The Energy Performance of Buildings Directive - (EPBD) - 2002/91/EC, http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:001:0065:0071:EN:PDF 21. Trends in photovoltaic applications. Survey report of selected IEA countries between 1992 and 2009, October 2010, IEA-PVPS22. Trends in photovoltaic applications. Survey report of selected IEA countries between 1992 and 2009, October 2010, IEA-PVPS23. Trends in photovoltaic applications. Survey report of selected IEA countries between 1992 and 2009, October 2010, IEA-PVPS24. http://www.euractiv.com/en/energy/eu-renewable-energy-policy-linksdossier-188269 25. Directive 2009/28/EC on the promotion of the use of energy from renewable sources : http://eur-

lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:EN:PDF 26. Directive 2010/31/EU on the energy performance of buildings (recast)

http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P7-TA-2010-0159 27. Official Journal of the European Union: http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2009:211:SOM:EN:HTML28. Stock taking document Towards a new Energy Strategy for Europe 2011- 2020:

http://ec.europa.eu/energy/strategies/consultations/doc/2010_07_02/2010_07_02_energy_strategy.pdf 29. European Strategic Energy Technology Plan (SET-Plan) Conference Website:http://www.setplan-

conference2010.es/Publico/Programme/index.aspx?idioma=en ; Solar Europe Industry Initiative – EPIA’s Press Releasehttp://www.epia.org/fileadmin/EPIA_docs/public/100601_Solar_Europe_Industry_Initiative_-_Press_Release.pdf

30. EPIA’s Website: Article on EU Emissions Trading Scheme (ETS): http://www.epia.org/policy/european-union/eu-emissions-trading-scheme-ets.html

31. EPIA’s Website: Article on EU Economic Recovery Plan: http://www.epia.org/policy/european-union/eu-recovery-plan.html 32. Energy from the Desert, Feasibility of Very Large Scale Photovoltaic Power Generation (VLS-PV) Systems, IEA-PVPS Task 8, May 200333. Source: http://en.wikipedia.org/wiki/Smart_city 34. European Initiative on Smart Cities – overview: http://setis.ec.europa.eu/about-setis/technology-roadmap/european-initiative-on-smart-cities35. Implementing The Energy [R]Evolution, October 2008, Sven Teske, Greenpeace International36. International Energy Agency, World Energy Outlook 200737. “Our Common Future”, published by the United Nations World Commission on Environment and Development (WCED) in 1987.38. “The True Value of Photovoltaics for Germany”, a study developed by Phoenix Solar and A.T. Kearney, 2010; “SET for 2020” study, EPIA, 2009.39. PV Value Beyond Energy, IEA-PVPS task1040. Source: http://www.ecoinvent.org/database/41. The Electricity Access Database: http://www.worldenergyoutlook.org/database_electricity/electricity_access_database.htm 42. “Reducing the Cost of Grid Extension for Rural Electrification”, ESMAP (2000)43. Sunlabob44. Source: NICE International45. Source: the Alliance for Rural Electrification Projections made from a case study based in Ecuador with real natural conditions

referenceS

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liSt of figureS and tableS

figure 20: Photovoltaic technology status and prospects 37

figure 21: c-Si solar cell development 38figure 22: Cost potential for thin film

technologies based on production volume and module efficiency 39

figure 23: Principle of a 100% renewable power supply system 42

figure 24: Peak shaving northern Europe 43figure 25: Peak shaving northern Europe

with storage 43figure 26: FiT - How does it work in

practice? An example of the mechanism of a FiT for sustained competitive growth of PV 47

figure 27: PV Market development underdifferent support strategies 49

figure 28: Support schemes in Europe 51figure 29: The Greenpeace-proposed

Feed in Tariff mechanism 61figure 30: World PV market in 2009 64figure 31: Global evolution of PV

installed capacity 64figure 32: New installed electrical capacity

in 2009 in the EU 65figure 33: PV in the Sunbelt countries 65figure 34: Evolution of installed

capacity by region under the two scenarios 72

figure 35: Total of World cumulative PV installed capacity under three scenarios 73

figure 36: Annual market to 2050 underthree scenarios 73

figure 37: Regional development linked

liSt of figureS

figure 1: The meaning of the word “photovoltaic” 10

figure 2: Example of the Photovoltaic Effect 10figure 3: Solar irradiation versus established

global energy resources 14figure 4: Solar radiation around the world 14figure 5: Comparison of the average daily

electricity needs of a 2-3 personhousehold with the electricity output of a 20 m² PV system 15

figure 6: Different configurations of solar power systems 18

figure 7: Crystalline silicon cells 20figure 8: Crystalline silicon

manufacturing process 21figure 9: Thin Film module 23figure 10: Steps in making Thin Film

solar cells 24figure 11: Concentrator PV modules 24figure 12: Historical evolution of technology

market share and future trends 26figure 13: PV module price

experience 30figure 14: Costs of PV system elements 31figure 15: Evolution of prices

of large PV systems 31figure 16: Levelised Cost of Electricity

(LCOE) ranges 32figure 17: Development of utility prices

and PV generation costs 34figure 18: Peak load demand and electricity

spot price in Spain on 18 July 2007 35figure 19: Range of household electricity

prices in California 36

95

liSt of figureSand tableS

to PV expansion under three scenarios 75

figure 38: Amount of solar PV electricity as a percentage of world power consumption 76

figure 39: Annual CO2 reduction 78figure 40: Cumulative CO2 reduction 78figure 41: Definition of sustainability 80figure 42: Example of cumulative benefits

of PV 81figure 43: Pay-back time for several PV

techonologies in the southof Europe 84

figure 44: Pico PV system 88figure 45: Solar home system 88figure 46: Mini-grid and hybrid system 89figure 47: Cost comparisons of energy

power systems on a lifecycle basis 89

liSt of tableS

table 1: Annual PV installed capacity 8table 2: Typical type and size of

applications per market segment 12table 3: Potential for solar power

in the EU-27 in 2020 15table 4: Average household consumption

and PV coverage area needed meet demand in nine countries 16

table 5: Commercialised cell efficiency records 22

table 6: Summary of record efficiencies of Thin Film technologies 23

table 7: Overview of commercial PV technologies 25

table 8: Number of companies world-widein the Thin Film value chain 27

table 9: Number of companies world-widein the crystalline silicon value chain 27

table 10: PV technology – 10-year objectives 39

table 11: Major 10-year objectives andmilestones for emerging and novel technologies 40

table 12: Illustrative internal rate of return levels 49

table 13: PV obligations in new buildings in Spain 52

table 14: Summary of EPIA/Greenpeace Paradigm Shift scenario 68

table 15: Summary of EPIA/GreenpeaceAccelerated scenario 68

table 16: World-wide cumulative PV installedcapacity and production to 2050 73

table 17: PV installed capacity evolution by region until 2030 74

table 18: Investment and employment potential of solar PV 77

table 19: General indicative energy payback times 84

table 20: Main types of off-grid PV systemswhich have been widely testedworld-wide 88

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page 44: Isofoton\Moroccopage 45: Martifer Solar S.Apage 46: Juwi Solar GmbHpage 52: Ohta city land

development corporationpage 59: Solon (Left image)page 59: Isofoton, Marocco (Right image)page 62: BP Solarpage 71: Schott Solarpage 74: Solon SEpage 77: BP Solarpage 79: Isofotonpage 90: BP Solarpage 91: Sharppage 92: Greenpeace/Markel Redondopage 93: Greenpeace/Takeshi Mizukoshipage 94: Isofotonpage 95: Isofotonpage 96: BP Solarpage 97: Isofoton\Morocco

liSt of image creditS

cover : Isofoton\Moroccopage 2: Istockpage 3: First Solarpage 4: BP Solarpage 5: Oerlikonpage 6: Concentrixpage 7: BP Solarpage 9: Epiapage 12: BP Solar (left image)page 12: Solon SE (right image)page 13: Kyocera (left image)page 13: Photowatt (Top right image)page 13: Sharp (Bottom left image)page 17: Torsten Proß/ErSol Solar Energy AGpage 19: Torsten Proß/ErSol Solar Energy AG

(Left image)page 19: BP Solar (Right image)page 20: Heraeus Holding GmbH (Top image)page 20: ErSol Solar Energy AG/Torsten Proß

(Bottom image)page 23: First Solarpage 24: Concentrixpage 29: BP Solarpage 32: Martifer Solar S.A (Left image)page 32: Juwi Solar GmbH (Right image)page 33: Isofotonpage 36: Schott Solar (Left image)page 36: Solar world (Right image)page 42: Greenpeace (All images)page 44: Solar world

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Solar generation 6Solar photovoltaic electricityempowering the world2011

About EPIA

With over 230 Members drawn from across the entiresolar photovoltaic sector, the European PhotovoltaicIndustry Association is the world’s largest photovoltaicindustry association and represents about 95% of theEuropean photovoltaic industry. EPIA Members arepresent throughout the whole value-chain: from silicon,cells and module production to systems development andPV electricity generation as well as marketing and sales.

About Greenpeace

Greenpeace is a global organisation that uses non-violentdirect action to tackle the most crucial threats to our planet‘sbiodiversity and environment. Greenpeace is a non-profitorganisation, present in 40 countries across Europe, theAmericas, Asia and the Pacific. It speaks for 2.8 millionsupporters worldwide and inspires many millions more totake action every day. To maintain its independence,Greenpeace does not accept donations from governmentsor corporations but relies on contributions from individualsupporters and foundation grants.

Greenpeace has been campaigning against environmentaldegradation since 1971 when a small boat of volunteersand journalists sailed into Amchitka, an area north ofAlaska, where the US Government was conductingunderground nuclear tests. This tradition of ‘bearingwitness’ in a non-violent manner continues today andships are an important part of all its campaign work.

Your Sun Your Energy Campaign is promoting theadvantages of photovoltaics and demonstrating what the virtually infinite power of the sun can offer. This wide-spanning campaign endeavours to illustrate howpeople can, through their daily activities, brighten theirlife thanks to photovoltaics. More information onwww.yoursunyourenergy.org

Scenario by: Sven Teske (Greenpeace International), Gaetan Masson (EPIA). Text edited by: EPIA: Monika Antal, Giorgia Concas, Eleni Despotou,Adel El Gammal, Daniel Fraile Montoro, Marie Latour, Paula Llamas, Sophie Lenoir, Gaëtan Masson, Pieterjan Vanbuggenhout. Greenpeace: Sven Teske. External contributions: Simon Rolland (Alliance for Rural Electrification), Rebecca Short. Design by: Onehemisphere, Sweden.

European Photovoltaic Industry AssociationRenewable Energy HouseRue d’Arlon 63-67, 1040 Brussels, BelgiumT: +32 2 4653884 - F: +32 2 4001010www.epia.org

Greenpeace InternationalOttho Heldringstraat 51066 AZ Amsterdam, The NetherlandsT: +31 20 7182000 - F: +31 20 5148151www.greenpeace.org ©

EPIA a.i.s.b.l. - www.epia.org -

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