01 February 2008Claus-Ulrich Mai
Many experts predict a transition toward solar power as a primary energy source in the future, but how can today's players overcome the significant hurdles ahead on the PV side?
Photovoltaic (PV) systems that directly convert solar energy into electricity are still too expensive to compete on an equal basis with grid-supplied electricity from conventional sources, but the gap has been narrowing in recent years. Mainstream implementation of PV technology for large-scale energy production is challenged by intermittent daytime-only electricity output, and the PV industry's still-developing technology and manufacturing infrastructure for converting sunlight into electricity.
To overcome these challenges, the industry is committed to further lowering costs by enhancing automated production equipment and systems for manufacturing solar cells and modules. The improved economies of scale that will naturally result from these steps will significantly increase output and reduce the production costs of solar PV systems.
To accelerate this trend, experts are urging the industry to take on the gigawatt challenge; i.e. creating highly efficient module factories capable of producing a Gigawatt peak (GWp) of PV electricity generating capacity annually. In addition, the industry acknowledges the need to achieve better conversion efficiencies for both silicon wafer-based and thin-film PV cells, while continuing to develop new, even less expensive technology solutions for PV cells and modules.
Ambitious subsidy programmes
These challenges are well within the solar PV industry's capabilities, as previous efforts to narrow the cost gap between fossil-fuel-based electricity and solar energy indicate. The industry's continuous technological innovations and improvements, increased cell conversion efficiencies and improved PV system reliability (with lifetimes of 20 to 25 years) have combined over the past 15 years to reduce the average cost of electricity from PV by 5% per annum.
The European Photovoltaic Industry Association (EPIA) now expects PV electricity generation to become cost competitive with conventional forms of electricity within the next 7 years, and to be worth more than €300 (US$441) billion a year by 2030.
Currently, solar PV systems contribute only minimally to the world's electricity needs, except in a handful of countries such as Germany and Japan. There, government-supported programmes, such as Germany's 1000 Roof and 100,000 Roof programmes and Japan's Residential Roof Program, have accelerated development of the alternative power source since the early 1990s. In Germany, thanks to low-interest installation loans and the feed-in program requiring utilities to buy back PV-generated power at attractive rates, 300,000 PV systems were installed as of the end of 2006.
Other countries, though slower in getting out of the starting gate, are also now making strides. Industry experts predict the USA in particular, could be a standout over the long term. Several US states have enacted ambitious subsidy programmes, including California's 10-year, US$3.3bn solar incentive programme. California hopes to supply 20% of its electricity needs with solar energy by 2010, while other states like Arizona, Texas, New Jersey, Pennsylvania and Maryland, have committed to fund the installation of some 10 GWp of additional solar electric generating capacity over the next 15 years through billions of dollars in subsidies.
At the Federal level, the US Department of Energy (DoE) gave a boost to the solar industry last year by launching the Solar America Initiative (SAI). The programme funds a variety of cooperative research programmes, which are structured as industry-led partnerships focusing on manufacturing and production. One of the key goals is to develop new, more cost-competitive PV materials for cells. The DoE budgeted US$148m for the PV energy programme during 2007, an increase of US$65m over its 2006 allocation.
By 2015, the DoE aims to make solar PV electricity generation cost competitive with conventional forms of electricity, while creating an installed base of PV systems large enough to produce 5 to 10 GWp. By 2030, the country's annual installed PV electric generating capacity could see a tenfold increase and represent roughly 40% of new electricity generation capacity.
Some experts claim that solar PV-generated electricity is already cost competitive, even without subsidies, for customers in California during peak daytime hours. But for most of the more than two billion people worldwide who currently have no access to electricity, solar PV systems are still far too expensive.
The industry's ultimate goal is to reduce the cost of PV cell production from roughly US$1.50 to US$2 per Watt peak (Wp) today, by 50% in 2010; this should be low enough to compete with traditional energy sources and make PV generated energy affordable for developing countries.
To tackle this important objective, a growing number of companies and organisations around the world are working to create technology that will further boost the acceptance of PV. Soaring demand for renewable energy has attracted an increasing number of industrial players to the PV field in recent years, including a number of Chinese manufacturers. Meanwhile everyone in the value chain, from silicon producers, cell and module makers up to production-equipment manufacturers, has been making serious investments.
Oerlikon Solar, for one, seeks to reduce costs even more aggressively and increase conversion efficiencies to a point where parity with conventional energy sources becomes a reality in the near term. The Switzerland-based company's equipment for producing thin-film solar PV modules enables high efficiencies while significantly reducing the cost per Wp.
