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EPIA: Global Solar Photovoltaic market estimated at 2.3 GWp in 2007

Solar PV Plant Beneixama (Spain; 20 MW).
Solar PV Plant Beneixama (Spain; 20 MW).

The global photovoltaic market grew by over 40% this year, with approximately 2.3 GW of newly installed capacity, the European Photovoltaic Industry Association (EPIA) reports in a press release. By 2010, the market die to EPIA could reach up to 7 GW under an EPIA policy driven scenario. Solar photovoltaic electricity generation is expected to be competitive with the electricity prices of utilities in Southern Europe by 2015. EPIA presented its first 2007 market estimates and short term projections for market and production on December 14th 2007, on the occasion of its annual Christmas workshop with its members. Today, the global cumulative installed capacity has reached 9 GWp, this is enough capacity to supply the annual electricity demand of 3 million European households.

EPIA estimates that under a policy driven scenario, in 2010 the annual PV market could reach up to 7 GWp, enabling an average market growth in excess of 40 % (Compound Annual Growth Rate) in the next 3 years. If support programmes in countries where the majority of PV installation is due to take place in the next 3 years are not further enforced, EPIA estimates that the market in 2010 would reach 4.7 GWp (pessimistic scenario).

 

More countries are becoming interesting market players

Four countries mainly contributed to the global photovoltaic market in 2007: established countries such as Germany, Japan and the US; but also Spain, which made a large contribution by tripling its annual installations this year. Germany remains clearly in first position with a 50% global market share. Japan’s market is estimated to stagnate this year, while Spain’s market should reach over 300 MW. The US should register a 260 MW market by the end of the year. Other new European markets have confirmed the effectiveness of their feed-in tariff schemes: Italy should register 50 MW of installed capacity this year, while France is following with an estimated 40 MW. South Korea is also becoming a significant market player with 50 MW of newly installed systems in 2007.

 

Future development of markets will depend on political support

The future of the German market will depend on the revision of the Renewable Energy Law which should come into effect in 2009. EPIA believes that in the best case scenario installations could reach up to 2 GWp in 2010. The Spanish market for the coming years remains uncertain: if the current decree and objectives are not properly revised soon, market actors fear a break in 2009 which could lead to a strong slow down of installations in 2010. The US, thanks to the dynamism of several states in particular California, is expected to become the second market behind Germany from next year, and could reach up to 1.4 GWp in 2010. Since the suppression of its support programmes, Japan is dropping down, in an optimistic scenario it could install a maximum of 500 MWp in 2010. South Korea, given its current favourable political programme, is expected to multiply by ten its current market size over the same period. Italy, if administrative barriers are reduced and support maintained, could register a market of up to 400 MW in 2010, followed by France with 300 MW.

 

Supply side: sector up-scales capacities to prepare for future demand

Acting in a totally globalised sector, in 2006 Europe was in 2nd position with 28% of the global cell production capacity behind Japan which held 36%. China has become recently a significant market player; in 2006 it doubled its production capacity compared to 2005, with a 15% share of global production. EPIA believes that up to 10 GWp of crystalline silicon, the main raw material used in PV production, could be produced in 2010 based on an 80,000 tonne annual supply. More capacity will be built for companies active lower down the value chain, enabling a production capacity of 14 to 16 GWp for crystalline-silicon based modules. Thin-Film producers are expected to up-scale production capacities up to 4 GWp, enabling a production of 2 GWp in 2010, representing over 20% of the total. The real production capacity of the sector should reach 10 to 12 GWp within the next 3 years.

 

Solar photovoltaic electricity reaching competitiveness

The main challenge of the sector today is to reduce its costs in order to reach grid parity (competitiveness) with conventional retail electricity prices as soon as possible. Since mid-2006 the sector is experiencing a progressive decrease in prices after overcoming the silicon shortage it endured from 2005. Economies of scale are a major driver for cost reduction in the PV sector. Constantly increasing demand is leading to an up-scaling of production capacities and thus reducing manufacturing costs. With increasing electricity prices and progress in cost reduction, solar photovoltaic electricity is already competitive in some US states; it is expected to be so in Southern European countries by 2015 and by 2020 for most of Europe.

 

2007-12-18 | Courtesy: EPIA | solarserver.com © Heindl Server GmbH