Chinese manufacturing power, falling prices, and technology breakthroughs have transformed the solar industry from a green niche into a mushrooming market.
“The Sun Always Shines on TV”, a famous Europop song in the 1980s, could be re-released for the 21st century, just slightly modified: nowadays, the sun always shines on PV.
Photovoltaic solar panels have become a symbol of renewable energy and a greener future – unfortunately, they still represent less than 0.1 percent of global energy production.
But growth is tremendous. Solar capacity in Germany, the world’s leading PV nation, will double in 2010 from 10GW to 20 GW, estimates the Swiss bank UBS. And despite Germany’s moderate climate, these solar panels do already produce massive amounts of electricity.
Figures from the European Energy Exchange show that solar power accounted for 10 percent of Germany’s electricity consumption during midday peak load on more than ten days in July 2010producing some 7GWh of solar power, comparable to the power output of seven nuclear power plants.
Falling prices have been one reason for this explosive growth. Chinese companies have entered the solar panel market and gained a market share of more than 50 percent.
Priceless competition
Cheap Chinese manufacturing and massive governmental subsidies have more than halved prices for solar panels since 2008. Shi Zhengrong, CEO of one of China’s biggest solar panel manufacturers, Suntech Power Holdings, even massive state subsidies in many European countries like Germany, Italy, or Spain have created a huge market. European companies, once market leaders, are struggling, but consumers have happily bought into the price slump.
But growing competition and state subsidies aren’t the only driving forces behind the current solar boom. Technological advances are equally important. While most established European companies see their market shares melt away, America’s First Solar managed to nearly double its share in 2009.
The company’s secret: cheaper technology. First Solar’s thin cadmium telluride panels are less efficient than traditional silicon-based panels, but the Arizona based company has managed to produce them at significantly lower costs.
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Solar Gallery (click on the image to start)
Take a look at some of the best ways to use solar power
Solar Gallery (click on the image to start)Take a look at some of the best ways to use solar power
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In 2009, its panels first broke the 1 dollar per Watt threshold. Recent figures put the cost per watt installed capacity at 80 Cents, beating most competitors by 30 to 40 percent.
But competitors such as Nanosolar are already working on the next technological leap. Using nanotechnology, the company has developed a printing process that it says will churn out ultra-thin and cheap solar panels.
Storing energy
PV pioneers are not just competing with each other, but also with concentrated solar power (CSP), also called solar thermal power, which reflects sunlight to heat liquids in tubes or atop towers to create steam.
CSP boasts economies of scale. The largest solar power plants in the world, and the largest ones planned, are CSP plants. And the more mirrors reflect sunlight, the more steam is available for the electric turbine.
CSP also allows energy storage. Modern installations like the Abengoa plant in southern Spain heat molten salt that can store heat for 7.5 hours so the plant can work at night. This ‘base load’ provides a valuable degree of security that PV parks do not yet offer.
On the other hand, PV can more easily be easily integrated into existing grids and needs little planning time, even in urban centers.
CSP plants need large amounts of water to cool their steam turbines, just like conventional power plants. PV panels convert sunlight directly into energy and don’t need cooling, an advantage in many dry and sunny places.
In hot climates, PV electricity production also mirrors the daily energy use. It produces energy when air conditioners use most energy to cool buildings. Demand usually drops at night, when PV panels also go to sleep.
In the long run, both technologies will remain important says solar expert Robert Pitz from the German Aerospace Center although much will depend on location. CSP plants only work with direct sunlight and have little value in moderate climates. But for desert countries in North Africa, CSP plants will be highly attractive.
“The costs for solar power are directly proportional to solar radiation,” says Pitz. “Solar power from the desert is three times cheaper than solar power produced in Germany. You use the same machinery but you get three times more power from it.”
It’s only a question of time, says Pitz, until solar power will have significant global market share. In Europe, the challenge is to combine decentralized and small-scale PV installations with large CSP plants in Southern Europe and Northern Africa in an intercontinental power grid.
