The Renewable Energy Policy Network for the 21st Century (REN21), an international grouping of government, industry and research and nongovernmental organisations with an interest in renewable energy, publishes a yearly report entitled ‘Renewables Global Status Report’. As in previous years, the 2014 edition contains a wealth of information on recent market, industry, investment, technology and policy trends in the sector. This week’s instalment of this column puts the spotlight on solar photovoltaic (PV) power.
The chief benefits of solar PV are the abundance of free solar radiation and much lower life-cycle greenhouse-gas emissions, compared with fossil-fuel-based power generation. The main downsides are intermittency and low power density.
Over the past five years, solar PV has grown at a yearly average rate of nearly 55%. In 2013, some 39 GW of solar PV capacity was added, bringing the global total to 139 GW. Ninety-eight per cent of solar PV capacity has been added in the past decade. Last year, solar PV accounted for about a third of new renewable electricity generation capacity and exceeded new wind power capacity for the first time. This impressive growth is, of course, off a miniscule base: solar PV still meets less than 0.5% of the world’s total energy demand.
The geographical spread of solar PV improved in 2013; a total of 17 countries have at least 1 GW of capacity. But new installations were dominated by China, which added 12.9 GW – a third of the world’s total. In terms of total solar PV capacity, China (with 20 GW) is now placed second behind Germany, which retains its substantial lead with nearly 36 GW. On a regional basis, Asia added the most capacity in 2013 (a total of 22.7 GW) but Europe continues to boast the largest installed capacity (80 GW).
China has come to dominate the production of solar panels in the past few years, accounting for two-thirds of the world output in 2013. This has put a lot of pressure on manufacturers in the US and Europe, several of which have gone bankrupt.
After falling precipitously for two years, solar panel prices stabilised last year, helping the industry to recover somewhat from a glut. But production costs continued to decline owing to technology improvements and economies of scale. Thanks to the declining average price per panel, the dollar amount of financial investment in solar PV fell globally in 2013 despite growing installation capacity.
Solar technology is evolving rapidly. Canadian company Morgan Solar has developed a form of concentrated solar PV which uses plastic lenses to focus light onto small, superefficient cells. Combined with a sun-tracking system, they reportedly generate among the most efficient and cheapest solar energy on the market.
In some countries, grid-connected solar PV is now competitive with other sources of electricity. But standalone systems – which require costly batteries that need to be replaced every few years – are considerably more expensive. This is hampering the expansion of solar PV in rural Africa, where it is perhaps needed most, to combat energy poverty and reliance on unhealthy traditional fuels.
Policy support for renewable energy waned last year in some European countries and the US, amid austerity programmes. On the other hand, one of the greatest obstacles for more rapid development of solar PV is continuing subsidies for fossil fuels in many countries.
The dominant type of solar PV installation depends mainly on policy factors. Countries with feed-in tariffs, such as Germany and Italy, have seen substantial investments in rooftop solar PV by households and businesses, while in other countries, such as China and the UK, utility-scale solar farms are more common. In some countries, utilities are trying to slow the expansion of distributed solar PV as they find their customer base and revenues shrinking.
In South Africa, solar PV has finally begun to see the light of day in the context of the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). In the first bid round, the department accepted 632 MW of solar PV at an average price of R3.10/kWh (in April 2013 prices). In the second round, it accepted 417 MW at R1.85/kWh, and in the third round 435 MW at R0.99. The cumulative investment in solar PV across the three bid windows amounted to R42-billion, a third of the REIPPP total. The first 75 MW solar farm was connected to the grid late last year and is the largest on the continent. But, in the absence of a feed-in tariff or net metering, distributed rooftop systems remain scarce.
Driven by a combination of policy support, technological improvements and falling prices, the takeoff phase of solar PV is accelerating. In an increasing number of countries, solar PV is becoming a viable source of electricity for household and commercial consumers or at utility scale. This is good news for consumers and the environment.