> Competitiveness Global Market Outlook for Photovoltaics until 1 Facing a sunny future 1
Global Market Outlook for Photovoltaics until 1 Facing a sunny future Demand side The solar PV market has been booming over the last years and is forecasted to confirm this trend in the coming years. By the end of 7 the global cumulative capacity exceeded 9. The European Union contributes to around % of the global cumulative capacity. Figure 1: Historical development of cumulative installed global and EU PV capacity 10000 9000 8000 EU GLOBAL 7000 6000 MWp 00 0 0 0 1000 0 1994 1995 1996 1997 1998 1999 0 1 3 4 5 6 7* 1994 1995 1996 1997 1998 1999 0 1 3 4 5 6 7* EU 90 18 188 66 373 543 1089 1981 971 GLOBAL 580 669 795 948 11 148 176 1 795 3847 553 6851 9100 All figures in MWp * projected values from December 7 PV market deployment is to a large extent dependent on the political framework of any given country. Support mechanisms are defined in national laws. The introduction, modification or fading out of such support schemes can have profound consequences on PV industries. PV Market forecasts therefore depend on a deep understanding of the political framework. EPIA puts a great deal of effort into analyzing PV markets. Due to its close contact with key players in the industry and its deep knowledge of PV policy and support schemes, EPIA market scenarios are a credible and well known source for short term market forecasts.
In December 7, EPIA went through an extensive data gathering exercise among a highly representative sample of the PV industry, national associations and energy agencies. Based on cross checking of data and consolidation of complementary market projection methods, EPIA has derived representative scenarios for the future development of the PV industry. The Pessimistic scenario: This scenario is based on the assumptions of a business as usual scenario which does not assume any major enforcement of support mechanisms. The Policy driven scenario: In this scenario, EPIA expects the follow up and/or introduction of support mechanisms, namely feed-in tariffs, in a large number of countries. EPIA PV market scenarios until 1 Figure : Annual market (MW) and annual growth rate (%) pessimistic scenario policy driven scenario 10 annual growth rate 90% 11000 10000 9000 8000 77% 6% 80% 70% 60% MWp 7000 6000 00 0 0 0 1000 9% 31% 35% 34% 14% 41% 4% 35% 5% % % 30% 6% % 10% 0 1 3 4 5 6 7 * 8* 9* 10* 11* 1* * projected values 0% 6 7 * 1 * Policy driven scenario Pessimistic scenario 1598 1598 46 46 8 * 3630 5160 9 3655 9 * 10 * 69 8673 4680 11 * 1097 5803 78 All figures in MWp * projected values 3
In the Policy Driven Scenario EPIA expects 7 of annual installations by the year 10 and 10.9 by 1. According to this scenario, within the next 5 years the global PV market will be 5 times bigger than it was in 7. Annual market growth rates differed considerably in the past. Due to the take-off of the German PV market in 4 the growth rate for annually installed capacity peaked at 71 % in the same year. A temporary shortage of silicon and a demand supply imbalance led to lower growth rates in the following years. In 7 the Spanish market took-off which again resulted in a bullish growth rate. Over the coming years European countries and the USA are expected to be the main contributors to continuous growth in the PV sector. In the following section, we will concentrate on the policy-driven scenario, which is believed to be the most representative projection, given current policy trends. Under this scenario, annual growth rates well above 5 % can therefore be expected. Figure 3: Global cumulative PV capacity (Policy Driven Scenario) 45 44 35 33 30 5 15 10 5 0 1,8, 1,8 3,5 5,3 6,7 9 13 18 5 3 4 5 6 7 * 8 * 9* 10* 11* 1* * projected values By the end of 1 a global cumulative capacity of 44 could be achieved. This is equivalent to the power capacity of 44 nuclear reactors. Under the Policy Driven Scenario, PV is clearly on the way to becoming a major global energy source. 4
Detailed market forecast for the major global annual PV markets in MW Table 1a: Pessimistic Scenario Table 1b: Policy Driven Scenario 6 7* 8* 9* 10* 11* 1* 6 7* 8* 9* 10* 11* 1* Germany Spain Italy Greece France Portugal USA China Japan South Korea 1 86 1 30 5 100 35 70 70 5 90 360 730 India 1 100 410 545 Rest of the World 8 97 1 1, 14 141 1 1100 45 10 59 170 10 80 10 60 15 3 10 130 1 600 10 100 30 1000 16 70 130 70 13 410 1800 360 180 360 1800 545 Germany Spain Italy Greece France Portugal USA China Japan South Korea India Rest of the World 8 97 1 1, 14 141 1 86 1 1 1 1100 45 10 59 30 170 10 0 1 1 35 1 1 17 0 100 800 70 3 0 600 1 100 0 0 0 600 5 70 70 1900 1 680 680 5 680 600 730 360 5 90 5 180 910 910 730 910 TOTAL 1598 46 9 3655 4680 5810 7 TOTAL 1598 46 365 5160 69 8700 10910 * projected values Figure 4: Regional distribution of global PV markets (Policy Driven Scenario) 10 10000 8,7 10,9 MW 8000 6000 0,3 3,6 5, 6,9 Rest of the World USA Rest of Asia Japan Rest of Europe Germany 1,6 0 0 6 7 8 9 10 11 1 5
Figure 4 shows the geographical distribution of the EPIA policy driven scenario. Germany is expected to remain the market leader and even increase its market size considerably over the next years. The biggest growth is foreseen for the Rest Europe in particular in countries such as Spain, Italy, France and Greece. The USA will also be able to use its vast solar potential and will challenge Germany as the Number 1 PV country. PV development in Japan will, to a large extent, depend on the decision of the Japanese government to reintroduce, or not, a support program. Also the Rest of Asia, in particular India and South Korea, will face increasing demand for PV. Production side Production capacities by the end of 10 Silicon Wafer Cells c-si Modules Thin Film 8-10 10-1 11-14 14-16 4 Silicon is the second most abundant raw material on Earth. For some years silicon supply (processed silicon) was the bottleneck of the PV industry. Due to the vast expansion of production capacities of known players and the introduction of new capacities by new players, silicon capacities will reach 8-10 by 10. As silicon is a major raw material for c-si technologies (93 % in 6), silicon capacities predefine the upper production limit for the industry. However, end of the year production capacities along the value chain from wafer cells modules are larger than actual production. Why? Firstly, a considerable part of capacity is added during the year while capacities are always stated as end of year capacities. Secondly, capacities are often stated by assuming a 365 day 4 hour operation. Maintenance periods and periods of lower capacity usage have to be considered when comparing actual production and capacity figures. In addition to the established c-si capacity, approximately 4 GW of Thin Film capacity is expected to be available by the end of 10. This would represent % of the overall module production capacity. Although all technologies face high expansion rates, Thin Film capacities are currently expanding at a faster rate than capacities for other technologies. 6
Towards a bright future Global PV markets have been expanding rapidly over the last decade. EPIA expects a similar market development for the years to come. By 10 a global annual PV market of 7 can be expected in the privileged Policy Driven Scenario. However, it is evident that such a market growth will require continuous political support in some countries and expanding support in countries which have not been active supporters of PV so far. PV will reach competitiveness with peak power prices in southern Europe by 15 and in most of Europe by. This so called grid parity is expected to then trigger an extraordinary demand due to PV generated electricity becoming increasingly competitive as a result of a continuous decrease in PV technology prices and expected price increases of fossil energy sources. PV solar electricity will not only become a major source of cheap electricity in the decades to come, it will do so by delivering clean, safe and reliable electricity that is needed to face the environmental challenges of our century! PV Soundless in Freising, Germany. Isofotón Photo credit: page 7 - Isofotón Text credit: Christoph Wolfsegger Marie Latour Michael Annett 7
8 European Photovoltaic Industry Association Renewable Energy House Rue d Arlon 63-65 10 Brussels - Belgium Tel: +3 465 38 84 - Fax +3 10 10 pol epia.org www.epia.org About the European Photovoltaic Industry Association: With over 1 Members drawn from across the entire solar electricity sector, the European Photovoltaic Industry Association represents over 95% of the European photovoltaic industry. EPIA members are present throughout the whole value-chain of the photovoltaic industry: from silicon, cells and module production to systems development. EPIA s mission is to deliver a distinct and valuable service driven from the strength of a single European photovoltaic voice. Design: Sara Sveninge