review of solar energy technology, markets and policies - Center for ...

transmission, and distribution (Byrne et al., 2005b). For large-volume customers, notably
in the commercial and industrial sectors who pay demand charges as well as energy
charges, peak shaving can sizably reduce electricity expenditure during periods when
variable rates are often highest and maximize their return on investment.
DG can enhance energy security and thereby improve local economies by utilizing
local resources for and providing jobs to local people, rather than relying on external
resources and labor. Most of the economic value generated by DG stays in local the
economy in the form of increased jobs and income.
2.3.1 PV
As discussed in section 1, there has been exponential growth in the installation of
PV systems. Worldwide, the total installed capacity of solar PV, at the end of 2007, was
10.5 GW, with the dominant markets being Germany (~40% of total PV installations),
Japan (~ 20 %), the United States and Spain (each have about 6% of total PV
installations) (see Figure 1.2).
The global market share of PV is predominantly for grid-connected systems with
only about 4% (~63 MW) of the installed capacity during 2006 being off-grid projects
(IEA-PVPS, 2007). However, countries like India and China and a large number of
developing country markets are dominated by the off-grid systems. As mentioned in the
previous section, for instance, in India, with a total installed capacity of about 122 MW,
grid-connected PV accounted for only 2 MW (Akshay Urja, 2008). In China, one-half of
the country‘s installed solar PV capacity of 80 MW is found in off-grid applications, with
the remainder distributed between applications in communication, industry and consumer
products (Martinot and Li, 2007). The Chinese market for installed off-grid PV is
growing at about 5-10 MW per year (Martinot and Li, 2007). The dominant applications
for off-grid PV in countries like India, China, Bangladesh and Thailand, among others,
are solar water pumps, small solar home systems (e.g., 40Wp) and street lighting
(REN21, 2008).
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