by Yingling Liu / June 18, 2009
The year 2008 saw the most phenomenal growth in the solar power market yet, with dramatic increases in installations of solar photovoltaics (PVs), which generate electricity directly from sunlight, and solar thermal plants, which use the sun’s heat to produce power. Newly added PV power installations amounted to 5,600 megawatts (MW), more than double the 2,400 MW installed in 2007.1 Cumulative PV power installed worldwide jumped from 9,000 MW in 2007 to almost 15,000 MW in 2008.2
Europe remains the leading market for PVs, accounting for over 80 percent of world demand in 2008.3 (See Figure 1.) Spain overtook Germany to become the number one solar PV market worldwide, with its market increasing in one year from 560 MW to an estimated 2,600 MW in 2008.4 This 364-percent growth accounted for almost half of all new installations in 2008.5 Germany followed in second place, with new installations of about 1,500 MW.6 The United States came in a distant third, adding approximately 348 MW, followed closely by Italy, South Korea, and Japan.7
Europe leads in the cumulative PV installed capacity too, with more than 9,000 MW in operation, representing over 65 percent of the global total at the end of 2008.8 Japan and the United States are following far behind, accounting respectively for 15 percent and 8 percent of the global total.9
The phenomenal growth in the top two national PV markets—Spain and Germany—suggests that government support programs are pivotal in the development of the solar market.10 A feed-in tariff policy in Spain requires utilities to buy electricity generated from solar power projects at premium guaranteed long-term prices that are set by the government, an incentive introduced to encourage the adoption of renewable energy. The lucrative solar electricity rates in Spain fanned unexpected enthusiasm from the industry. In September 2008 the government reduced the payments under the feed-in tariff by a great margin and put a cap on annual PV installation from 2009 through 2010, aiming at a target of 3,000 MW by the end of 2010.11 The anticipated decline in the solar electricity rates galvanized the private sector to rush to install new solar PV capacity before these changes came into force.12 This policy change is expected to slow the PV market in Spain significantly over the next few years.
Germany, which was the number one solar market for years, also has a feed-in tariff program for renewable energy. It aims to reduce the premium solar electricity rates gradually and predictably until solar energy achieves price parity with conventional power.13 As the result of amendments to the German law in mid-2008, payments for PVs declined considerably starting in January 2009, reflecting a reduction in installed cost.14 The stability and consistency of Germany’s feed-in tariff has proved beneficial for continuous market development, and the country is expected to regain the top PV market position in 2009.15
Driven by strong global market demand, both crystalline silicon-based and thin-film cell production saw dramatic growth in 2008.16 Global PV cell production reached approximately 6,940 MW, compared with 3,715 MW in 2007, an increase of 87 percent.17 (See Figure 2.) The Chinese PV industry is leading in silicon-based cell production, primarily to meet soaring demand from Spain and Germany.18 Combined Chinese and Taiwanese production accounted for 39 percent of the global cell output in 2008, up from only 7 percent in 2004.19 Europe’s share of global silicon-based cell production stayed roughly flat at 28 percent, down 1 percent from that in 2007.20 Japanese PV producers, once the world’s top players, fell further behind their competitors, dropping from their 2001 peak of 46 percent to only 18 percent of the global market in 2008.21 (See Figure 3.) The German company Q-Cells was the number one producer of solar cells in 2008, First Solar of the United States ranked second, and Suntech of China came in third.22
The strong market demand also fanned the development of thin films, a technology that produce solar cells with much less polysilicon material although generally with less efficiency than crystalline silicon cells.23 Thin-film production grew 121 percent in one year, from 432 MW in 2007 to 954 MW in 2008.24 Its global market share also rose, from 7 percent in 2006 to 13.7 percent in 2008.25 The United States is leading in thin-film production. Industry leaders include First Solar (with plants in the United States, Germany, and Malaysia) and United Solar.26 First Solar recently completed the largest thin-film solar power plant to date in North America, a 10-MW facility in Nevada.27 Developers in Germany commissioned three new large-scale thin-film PV installations in 2008 with a combined capacity of some 50 MW.28 Also in 2008, Masdar PV announced a multibillion-dollar investment in thin-film PV facilities in Germany and Abu Dhabi-one of the largest investments ever made in solar power.29
Meanwhile, concentrating solar power (CSP)—a technology that uses mirrors to reflect and concentrate sunlight to heat water to drive a steam turbine for electricity generation—is expanding in many regions around the world that are blessed with abundant solar resources.30 CSP has seen considerable development in the United States, with more than 350 MW of CSP built in California between the mid-1980s and the early 1990s.31 The country also hosts one of the world’s largest CSP plants, the 64-MW Nevada Solar One CSP plant.32 The Mediterranean region has started to see increasing new CSP capacity as well, making Europe, North Africa, and Middle East a potential global hub for CSP generation.33
Two new CSP plants came on-line in 2008—the 50-MW Andasol-1 plant in Spain and a 5-MW plant in California.34 The Andasol-1 plant has more than seven hours of full-load thermal storage capacity, allowing it to provide electricity to the grid when it is most needed and the price is highest.35 Projects with more than 6,000 MW of capacity are now in the pipeline in the United States, mostly planned for California, Arizona, and Florida.36 Over 3,000 MW of CSP projects have been announced in Europe, North Africa, and the Middle East; out of these, 2,500 MW are to be built in Spain. Israel and the United Arab Emirates opened tenders for 350 MW projects in the Middle East during 2008, and projects are now planned for Algeria, Morocco, and Egypt.37
The global economic crisis started to affect the global solar markets and industry in the latter half of 2008. Its influence will permeate all industry links and markets in 2009 and beyond. Some big industry players are leaving the industry or scaling down. Shell, for example, is leaving the industry all together, BP closed several plants, and Suntech scaled back its production.38 The solar PV market is expected to contract by 17 percent in 2009.39
Source: http://www.worldwatch.org/node/6156?emc=el&m=258906&l=4&v=807a4838d6
