Industry Facts

Renewable sources of energy are important not just because they diversify from the technological base of the electrical generation but also because the global community is seriously concerned about the global change of climate. 

According to the study by Exxon Mobile, global energy demand is expected to grow at 1.3% per year on average to 2030, i.e. by cumulative 40% compared to 2005. Of this increase, over 40% will be consumed in power generation process. Consequently, energy-related CO₂ emissions are expected to rise.

One of the key factors of reduction of greenhouse gases emission is the use of renewable sources of energy: solar energy, energy of the wind, biomass, hydro-, tidal and geothermal energy. The development of these technologies is supported by most well-developed countries. In particular, in March 2007 the Council of Europe set a goal to bring the use of renewable energy resources to 20% of all energy consumption in the EC.

An important advantage of solar PV systems is that there are no carbon dioxide (CO2) emissions during their operation. Although there are indirect emissions during the other stages of the solar lifecycle, PV technologies generate far less life-cycle air emissions per GWh than conventional fossil-fuel-based electricity generation technologies. At least 89% of air emissions associated with electricity generation could be prevented if electricity from photovoltaics displaces electricity from the grid. PV also does not involve any other polluting emissions in the form of exhaust fumes or noise. By 2030, reduction in annual global carbon emissions due to solar PV technologies are expected to reach 1 billion tons, and cumulative reduction in carbon emissions ─ nearly 6.7 billion tons. Сompared to other sources of renewable energy, solar energy has the greatest potential for long-term growth: it is estimated that enough sunlight falls on the earth every minute to meet the world’s energy demands for an entire year. According to the European Photovoltaic Association (EPIA), by 2030, global solar electric output will reach 2,646 TWh, covering from 8.9 to 13.8% of global electricity demand. Solar market will amount to €454 bn per year.

Current state of the market

Despite the continuing global recession, in 2009, the global PV market demonstrated moderate development, setting a new annual record of 7.3GW in installations (a 20% growth over 2008) and $38 billion in revenues (vs. $37.1 billion in 2008).

By region, Europe accounted for 4.75 GW (74%) of the world demand in 2009, of which 4.07GW were installed in the top 3 countries: Germany, Italy and Czech Republic. Germany regained its leadership in annual installations and confirmed its position of the world’s largest solar market by cumulative PV power installed. Italy, with favorable FIT system currently in place, has become the 2nd largest PV market in 2009; and USA — the third largest one, with Japan as a close follower:

World and European PV markets in 2009. Source: EPIA

The global cumulative installed capacity thus exceeded 20 GW, with Europe leading the way (about 14GW — some 70% of the global cumulative PV installed capacity), and Japan (2.6 GW) and the US (1.7 GW) following far behind (15% and 8%, respectively).

The global solar cell & module output reached 9.34-12.3 GW in 2009 — a 36-56% increase from 2008 (the range in numbers reflects data coming from different analysts). Thin-film production accounted for about 18% of that total.

By region, China and Taiwan-based manufacturers reinforced their sector leadership, expanding their solar cell production share from 44% to 49%. China alone produced more than a third of all cells made in 2009. 

In terms of individual companies, First Solar (USA) topped the list with 1.1 GW of production. It is followed by Suntech (China, 704MW) and Sharp (Japan, 595MW).  The last-year’s leader Q-Cells finished only 4^th.

Despite the recession, capacity build up was underway along the entire PV supply chain. Particularly, the top 7 polysilicon manufacturers increased their production capacity to 114,500 tons in 2009 — up 92% on their 2008 level.

Major (Tier 1) players continue to lead capacity/production build up along the PV supply chain. For example, the top 7 polysilicon producers accounted for about 50% of the global polysilicon production capacity. The top 8 wafer manufacturers accounted for about third of global wafer capacity in 2009. The top 10 cell & thin-film module makers were responsible for almost 46% of the 2009 output. And the top 6 module producers had only 25% share in the global capacity.

In 2009, regional distribution of the world’s PV manufacturing capacity looked as follows:

Source: EPIA

The excess of PV supply over market demand caused ASPs falling along the entire PV supply chain. The decrease in prices was especially steep in the beginning of 2009, but pricing situation stabilized in the end of the year.

Market outlook

Industry experts believe that the PV industry will return to high growth rates in 2010 and remain on this path for over the next 5 years.

Lux Research forecasts that strong demand growth in Asia and the U.S. will push the PV market to 9.3 GW and $39 billion in revenues in 2010. Further price reductions will open new markets and drive the global PV market up to 26.4 GW and $77 billion in revenue in 2015. However, the new balance between supply and demand will be reached at the cost of some company failures and lower utilization rates.

According to the more optimistic Solarbuzz, even at the slowest growth rate, the global PV market will be 2.5 times its current size by 2014. And under the fastest growth forecast, annual industry revenues will approach $100 billion by 2014.

And EPIA continues to expect the PV Market to grow, even according to the Moderate scenario, which is based on the premise that the market does not receive any major enforcement of support mechanisms (the Policy-Driven scenario shown expects the introduction of support mechanisms such as feed-in tariffs and others in many countries).

EPIA foresees the market to reach 30 GW by 2014 under the Policy-Driven scenario which would mean a Compound Annual Growth Rate (CAGR) of 33% over the period 2009-2014. For the Moderate scenario, the annual market is expected to range above 13.7 GW in 2014 with a CAGR of 14%:

Global Annual PV Market Outlook till 2014. Source: EPIA

Through 2014, production capacities along the PV value chain are expected to grow with a CAGR of 20 to 30%:

Source: EPIA

Europe is forecast to remain the largest PV regional market through 2014 both in terms of both, annual and cumulative installations. North America and, particularly, the US are expected to develop as a large market with consistent growth in the next few years. China and South Asia are also forecast to emerge as a large market by 2014.

Cumulative PV installations by region. Source: EPIA

[1] http://www.exxonmobil.com/Corporate/energy_outlook_summary.aspx

[2] Fthenakis, Kim and Alsema. Emissions from Photovoltaic Life Cycles. Environmental Science and Technology 42(6), 2168-2174, 2008. http://www.environmental-expert.com/resultEachPressRelease.aspx?cid=8819&codi=31222&idproducttype=8&level=0

[3] Lehman Brothers’ Solar Daily 28.03.2008

[4] http://www.uk-energy-saving.com/solar_energy.html or http://www.ases.org

[5] EPIA’s Solar Generation V, Sept 2008, p.12

[6] http://www.pv-tech.org/lib/printable/8476/

[7] http://www.solarbuzz.com/News/NewsNACO1096.htm

[8] http://www.pv-tech.org/lib/printable/8831/

[9] EPIA. Global market outlook for photovoltaics till 2014

[10] 2009 Solar cell & module survey. Photon International, March 2010

[11] Lux Research. Q4 2009 Solar tracker

[12] 2009 Solar cell & module survey. Photon International, March 2010.

[13] http://www.marketwire.com/press-release/Shakeout-Shifts-Solars-Center-From-Europe-to-China-1128635.htm