Solar will power ahead to offer 20% more output for 25% lower module costs within 15 months
In 2012, as publisher of pv magazine, I invited the publication to a breakfast event during the EU PVSEC show. The topic discussed was a polarizing one: A prediction 300 GW of solar generation capacity would be deployed annually in 2025 with a maximum of 200 GW of cumulative PV capacity expected in Germany. As it turned out, that estimate was too conservative for Germany but on the right path globally. At the time, many judged the high expectations absurd because they could not imagine the storming progress of PV which has been taking place for some years now.
2012 – a difficult environment for a big vision
The idea for that medium-term vision came from many inquiries made of the industry in 2011. How far could it go with global PV? What was realistically needed for Germany’s energy transition? I had presented preliminary considerations for a talk during the Semicon conference held in autumn 2011 in Dresden; the quantities of modules discussed surprised many at the time. Amid a troubled year for solar, we decided to lay out perspectives clearly and discussed solar predictions at Semicon and at the Forum Solarpraxis – today known as the Forum Neue Energiewelt – in November 2012. Then, just as now, some industry insiders warned against frightening politicians with such high numbers, an attitude which has had the effect of giving policymakers little confidence solar power can supply the required large capacities. As we know today, the figure needed must be more than 400 GW of solar capacity in Germany alone.
Let’s stay briefly with 2012 to observe the path the German and global solar industries have taken since. Some 31 GW of new solar capacity was installed worldwide in 2012, of which 7.6 GW came in Germany, despite the strong FIT [feed-in tariff] reduction implemented by the government in February of that year. The reasons for that year’s rally in Germany were global progress and overcapacity and massively lower module prices due to a high euro exchange rate. But that government decision also led to brutal losses in solar manufacturing – to numerous bankruptcies for photovoltaic manufacturers, to insolvencies and takeovers.
The biggest blow was the insolvency of German module manufacturer Q-Cells, once a market leader, which was sold to the Hanwha Chemical Corporation. That proved to be just the tip of the iceberg. In 2012, market research company Mercom Capital counted 35 bankruptcies and insolvencies as well as 50 restructurings and reductions in the scale of operations. Mercom pointed to lay-offs at German inverter maker SMA and the exit from the production of crystalline silicon modules by German industrial conglomerate Schott. Europe was hardest hit in global market terms, especially in wafer production. Norway’s REC ASA had to close three wafer factories in Norway that year, as did Schott and PV Crystalox with their wafer production operations in Germany.
Difficult years for the EU, global progress
The following years were heavy for the solar industry in Germany and the EU. Anti-dumping tariffs introduced in 2013 massively damaged the entire supply chain as governments were no longer prepared to subsidize what they considered excessively expensive solar power. Only the elimination of useless duties applied on solar modules and cells – pro tariff company Solarworld went insolvent twice despite massive duties in the U.S. and EU – in 2018 brought the start of a rapid and broad recovery. The first solar projects without government funding became possible.
Global markets and production capacity have been growing every year since 2012, and since 2016 we have seen a leap in efficiency and cost reductions. Despite the current weak demand in China, a market volume of significantly more than 100 GW is expected worldwide this year. By 2023, analysts at PV InfoLink expect global production capacities to grow to almost 250 GW.
Simultaneously, further increases in efficiency and cost reductions will be achieved in connection with a series of technical innovations which will go into mass production. The long dominance of polycrystalline modules has quickly come to an end – mono is the new normal. Tomorrow bifacial panels should become standard, with some manufacturers already offering them with transparent backsheets at almost the same prices as conventional products. That will further reduce solar prices and thus open more new markets almost automatically. The result is a good chance of 300 GW of new solar per year in 2025.
PV returns to Europe
By the autumn of last year, the EU was disconnected from the largest and most efficient global solar manufacturing operations and tariffs excluded the region from large volumes of technical innovation. Since the beginning of this year, however, the picture has been changing.
For example, the price of “mainstream modules” – produced in large quantities – has dropped from just under €0.30/Wp to €0.23 and, as things stand, it will probably fall even further next year. Mainstream mono PERC modules are bringing significantly more power per module than the rapidly aging poly module.
By switching from poly to mono PERC modules, performance per square meter has grown rapidly, bringing more and more power to the same footprint.
Cost implications of rising efficiency
It is clear cables, mounting structures and labor costs will not become more expensive so an extra 15-20% more power on the roof from each module will bring about a price fall per watt or kilowatt installed. The complete conversion to 1500 V in the field for ground-mounted facilities, which is almost upon us, will further reduce costs. New wafer formats and the use of larger modules – an idea which is finally starting to take hold in the EU as the 72-for-60-cell upgrade of the past makes way for 120-to-144 cell options, or even more – are rapidly reducing the costs of large scale PV even further.
At the same time, power electronics are becoming more efficient and cheaper and progress here is unabated.
Globally, there are more and more tenders for ever larger solar-plus-storage projects. In September, a tender in California caught the eye with 200 MW of solar and storage for four hours for just $0.039/kWh (€0.035). The storage unit was offered for $0.0133/kWh. In energy storage too, the signs are also of much cheaper large systems, provided there are suitable conditions for use and solar and wind resources.
Efficiency gains and the energy transition
Cheaper electricity means a cheaper energy transition. The increases in solar equipment efficiency are making better and better use of space. The area devoted to hosting around 50 GW of installed generation capacity in Germany today could hold almost 100 GW in the coming decades. “We’ve already achieved 100 GW”, one could say.
For today’s net power requirement, only around 2% of the agricultural land of Germany would be needed and those areas would become a paradise for biodiversity and the soil underneath the panels. New products will be created based on cheap cells and new concepts for both standardized and bespoke building-integrated PV (BIPV), offering even better use of solar’s enormous potential. This will take a little more time but it will certainly come because the advantages of using BIPV combined with local energy production are all too clear.
Solar is doing the job
Solar will do the job – throughout the EU – at a cost cheaper than any fossil or nuclear energy. PV is already doing the job and will get stronger every year and it is not only safer in terms of greenhouse gas emissions, it also protects species and soils.
Framework conditions are a must
The economy demands cheap green electricity and citizens do too. That is available from solar and wind turbines and now needs to be developed much more rapidly.
We are working on this now more intensively than ever at [German new energy agency] the Bundesverband neue Energiewirtschaft, and will talk more about our work shortly, maybe at the Forum Neue Energiewelt this week.
Let’s talk
How we can accelerate the global assault of photovoltaics in the EU even further? Which framework conditions will be needed first? We will discuss this on Thursday and Friday at the forum along with 700 participants from the innovative energy industry.
