Hawaii
Energy Policy Forum > 2002
Articles
Sales of Solar Cells Take Off
Bernie Fischlowitz-Roberts
http://www.earth-policy.org/Updates/Update12.htm
Last year world solar cell production soared to 395
megawatts (MW), up 37 percent over 2000. This annual growth
in output,
now comparable in size to anew power plant, is set to take
off in the years ahead as production costs fall. Cumulative
solar cell or photovoltaic (PV) capacity now exceeds 1,840
MW. (See http://www.earthpolicy.org/Updates/Update12_data.htm )
The top five producers in 2001 were Sharp, BP Solar, Kyocera,
Siemens Solar, and AstroPower, accounting for 64 percent
of global output. Japanese manufacturers, with 43 percent
of the world total, benefited from government policies
to encourage solar cell use. The 70,000 Roofs Program, which
initially provided a 50-percent cash subsidy for grid-connected
residential systems, has been the primary driver of Japan's
PV market expansion. The subsidy declined to 35 percent
in
2000 as production increased and solar cell prices dropped.
In addition to residential subsidies, government spending
of $271 million in fiscal year 2001--on research and development,
demonstration programs, and market incentives--was key
to the growth. In contrast to Japan, the U.S. government
spent
only $60 million on solar programs in 2000. The U.S. share
of the global market--24 percent--was surpassed in 2001
by the European Union (EU), which now accounts for 25 percent.
Government commitments to renewable energy are more robust
in the EU than in the United States. In Germany, the Renewable
Energy Act of 2000 offers citizens preferable loan terms
for purchasing solar systems, and gives them a guaranteed
price when feeding excess energy back into the power grid
(known as net metering). As a result of such support, the
German PV industry--the most advanced in Europe--is projected
to grow from its current installed capacity of 113 MW in
2001 to 438 MW by 2004.
As a result of government policies
in Japan, grid-connected residential installations totaling
100 MW dominated sales
in 2001. Germany's grid-connected systems accounted for
around 75 MW. The 32 MW installed in the United States were
divided
between grid-connected systems and those in remote areas
not linked to a power grid. All of India's 18 MW were for
such off-grid installations. The 120-130 MW installed in
some 50-60 developing nations were also for off-grid projects.
Both
Japan and the United States were net exporters of solar
cells. Almost two thirds of U.S. output was exported, while
Japan exported 42 percent of its total.
The cost of electricity
from solar cells remains higher than from wind or coal-fired
power plants for grid-connected customers,
but it is falling fast due to economies of scale as rising
demand drives industry expansion. Solar cells currently
cost around $3.50 per watt for crystalline cells, and $2
per watt
for thin-film wafers, which are less efficient but can
be integrated into building materials. Industry analysts
note
that between 1976 and 2000, each doubling of cumulative
production resulted in a price drop of 20 percent. Some suggest
that
prices may fall even more dramatically in the future.
The
European Photovoltaic Industry Association suggests that
grid-connected rooftop solar systems could account for
16 percent of electricity consumption in the 30 members of
the
Organisation for Economic Co-operation and Development
by 2010. If costs of rooftop PV systems fall to $3 per watt
by the middle of this decade, as projections suggest, the
market for residential rooftop solar systems will expand.
In areas where home mortgages finance PV systems and where
net metering laws exist, demand could reach 40 gigawatts,
or 100 times global production in 2001.
More than a million
homes worldwide, mainly in villages in developing countries,
now get their electricity from solar
cells. For the 1.7 billion people not connected to an electrical
grid, solar cells are typically the cheapest source of
electricity. In remote areas, delivering small amounts of
electricity
through a large grid is cost-prohibitive, so people not
close to an electric grid will likely obtain electricity
from solar
cells. If micro-credit financing is arranged, the monthly
payment for photovoltaic systems is often comparable to
what a family would spend on candles or kerosene for lamps.
After
the loan is paid off, typically in two to four years, the
family obtains free electricity for the remainder of the
system's life.
Photovoltaic systems provide high-quality electric
lighting, which can improve educational opportunities,
provide access
to information, and help families be more productive after
sunset. A shift to solar energy also brings health benefits.
Solar electricity allows for the refrigeration of vaccines
and other essentials, playing a part in improving public
health. For many rural residents in remote areas, a shift
to solar electricity improves indoor air quality. PV systems
benefit outdoor air quality as well. The replacement of
a kerosene lamp with a 40-watt solar module eliminates up
to
106 kilograms of carbon emissions a year.
In addition to promising
applications in the developing world, solar also benefits
industrial nations. Even in the UK, a
cloudy country, putting modern PV technology on all suitable
roofs would generate more electricity than the nation consumes
in a year. This would eliminate all greenhouse gas emissions
from nationwide electricity generation, removing almost
200 million tons of carbon dioxide annually from the atmosphere.
Recent
research surrounding zero-energy homes, where solar panels
are integrated into the design and construction of
extremely energy-efficient new houses, presents a promising
opportunity for increased use of solar cells. Julius Poston,
a progressive builder in the southeastern United States,
builds homes that use half the energy of typical ones.
His company, Certified Living, has constructed two prototype
zero-energy homes with integrated solar panels. If eventually
adopted on a wide scale, this groundbreaking concept could
eliminate the pollution associated with fossil fuel-generated
electricity for households.
Continued strong growth suggests
that the solar cell market will play a prominent role in
providing renewable, non polluting
sources of energy in both developing and industrial countries.
A number of policy measures can help ensure the future
growth of solar power. Removing distorting subsidies of fossil
fuels
would allow solar cells to compete in a more equitable
marketplace. Expanding net metering laws to other countries
and the parts
of the United States that currently do not have them will
make owning solar home systems more economical by requiring
utilities to purchase excess electricity from residential
solar systems. Finally, revolving loan funds and other
providers of microcredit are essential to the rapid spread
of solar
cell technologies in developing nations.
Solar cell manufacturers
are beginning to sense the enormous growth in the market
that lies ahead. Japan-based Sharp Corporation,
already the world's leading producer of solar cells, plans
to double its capacity in 2002, going from 94 to 200 megawatts.
For the industry as a whole, output is expected to increase
at 40-50 percent annually over the next few years, bringing
the solar age ever closer.
Additional data and information sources at www.earth-policy.org
or contact bernie@earth-policy.org
For reprint permissions contact rjkauffman@earth-policy.org
Earth Policy Institute is an independent, nonprofit research
organization dedicated to building an eco-economy.
|
