Unlocking global value

GLOBAL INVESTOR 2.07 Switching — 49
—3.—Cell lifetime: Modern PV elements based on silicon technology
have lifetimes of over 40 years and pay off their production
energy in 1− 5 years.
Japan and Germany leaders, USA yet to arise
The leading producers of PV cells are Japan and Europe (mainly
Germany) with a 45% and 28% share of total global 2005 shipments,
respectively, clearly dominating the market. The USA is still
lagging behind, with a mere 8.5% market share, on a level with
China (8.3%). However, the proposed FY 2008 US budget calls for
USD 137 million in funding for the Solar America Initiative (SAI), a
major new R&D effort to achieve cost-competitive solar energy
technologies across all market sectors by 2015. US solar cell companies
are expanding, and the Silicon Valley start-up Nanosolar last
year announced the construction of a manufacturing facility that
will produce an output of 430 megawatts (MW) per year, almost
triple the existing solar production capacity of the USA today. Conservative
estimates given by the European Photovoltaic Industry
Association (EPIA) see worldwide PV systems capacity exceeding
400 GWp, or 3% of the global electricity demand in year 2025, implying
average annual CO2 savings of 353 million tons per year,
equivalent to 150 coal-fired power plants. Worldwide revenues of
the PV industry are expected to soar from USD 11 billion in 2005 to
USD 220 billion in 2025 (Figure 3). And these figures do not even
take into account ground-breaking developments in nanotechnology-based
PV research.
Figure 1
World PV cell/module production
Sustained growth of the PV industry in the last decade.
Japan is the clear leader, accounting for nearly half of the world’s
production. Source: European Commission (PV Status Report 2006)
Annual Production in Megawatts (MW)
2000
1800
1600
1400
1200
1000
800
600
400
200
0
1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Japan Europe United States Rest of World
CAGR 1995–2005: 35%
Three generations of solar cells
First-generation PVs are silicon wafer-based solar cells, accounting
for more than 86% of the market. The technology has come a long
way since the early days of silicon cells in the late 1950s, and conversion
efficiencies have been boosted from 6% for the first devices
to currently over 20%. For satellite applications, some refined cells
have been designed that even reach 40% efficiency. First-generation
solar cells account for the principal PV sales portion of the
main suppliers Sharp, Kyocera and Q-Cells. Also, mid caps like
German Solarworld or the US-based SunPower source their main
revenues from this technology. However, high material demand is
a grave downside of first-generation devices. Shortages of silicon
supply have led to an increase in pricing, and manufacturers have
to compete with the computer industry for supplies of high-quality
silicon. This in turn has spurred the development of a new technology
generation with lower material usage per watt.
The second generation of PV technology came about a decade
ago and is based on the use of thin-film deposits of various semiconductors.
There are different materials under investigation or in
mass production, such as amorphous silicon, cadmium telluride and
copper indium sulfide. These materials generally exhibit increased
light absorption rates that allow for film thicknesses of a few microns
(compared to 200 − 300 microns in first-generation PV elements).
Besides the larger players, start-up companies like Daystar Technologies,
Shell Solar and Nanosolar are prominent promoters of
the thin-film technology with auspicious plans for soaring production
capacities in the medium term. Efficiencies are typically lower
compared to first-generation PVs, ranging from 5% to 13%, but
owing to reduced material usage, the price per watt achievable
with second-generation solar cells is better in the end. Compound
consumption for both PV generations together has been reduced
from 14 grams/watt in 2003 to currently 9 grams/watt, and the
Figure 2
Competitiveness of PVs
Falling solar electricity prices are expected to undercut conventional source
prices within the next decade. Source: EPIA (RWE Schott Solar GmbH)
USD/kWh
1.4
1.2
1
0.8
0.6
0.4
0.2
0
900 hours sun/year
(e.g. Berlin, Germany)
1800 hours sun/year
(e.g. Los Angeles, USA)
Utility power at peak
demand hours
Utility bulk power
prices
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
2040