Market Watch

A number of the US’ leading solar firms have been pioneers of the integrated PV energy provider model. Mark Osborne charts the evolution of the model and explains how it could be emulated as other firms look to capitalise on burgeoning end-market demand.

This year Solar Power International rolls into that haven for hedonism, Las Vegas. But as the chief executives of the two bodies behind the event tell Lucy Woods, behind the pazazz, some serious issues will be under the spotlight.

The US has steadily developed what is now among the world’s leading solar markets. John Parnell explores how its conservative approach has allowed it to build a solid industry that will now prepare it for challenges that lie ahead.

R&D expenditure by major PV module manufacturers has not been immune to the PV industry’s period of profitless prosperity. However, spending in 2012 was not affected to the extent that many would have expected, with a number of companies increasing their R&D activities and boosting staffing levels to meet R&D roadmap requirements. This paper discusses the current trends in R&D spending and staffing levels, highlighting both leaders and laggards.

This is the second and concluding part of a study on the solar photovoltaic market. In the first part, photovoltaic energy was contrasted with other energy sources used to generate electricity, and cost points necessary to produce a sustainable photovoltaic market were identified. In this second part, learning rates required to attain those cost points are provided. The paper concludes by examining a scenario in which 15% of the world’s electricity in 2035 is generated using photovoltaic energy, and frames the challenge from both global investment and profitability perspectives.

This paper provides an overview of reducing the ‘soft costs’ of solar, with a focus on driving down the cost of balance of system (BOS) and operations, primarily in commercial-scale installations. Attention is drawn to the internal data and information on specific case studies/best practices that can be replicated by other companies. Mainstream Energy (which supports three business units – REC Solar, AEE Solar and SnapNRack) aims to simplify system design and configuration by utilizing new technologies and streamlining internal processes to reduce total system cost – and take solar to the mainstream.

There has been rapid development of renewables in Europe in the last decade thanks to various support schemes. These are now part of the electricity reality in Europe and will continue driving the energy revolution in the coming years. In the PV sector in particular, feed-in tariffs (FiTs) have proved quite successful: at the beginning of 2010 more than 51GW of PV systems were connected to the grid in the EU, compared to less than 5GW five years earlier. This translates to 2% of the electricity demand being fulfilled by PV systems in the EU27. But all coins are double-sided: FiTs have proved to be too successful in several countries, inducing uncontrolled market development. The time has come to identify how these mechanisms – and in particular support schemes based on pure electricity injection – should evolve in order to manage a sustainable transition to competitiveness.

In this paper an assessment is made of the impact of causal peer effects found in a recent paper by Bollinger and Gillingham, simulating solar adoption over many markets in the presence of a causal peer effect. Heterogeneity in both the peer effect and the baseline adoption rate is introduced and their interaction assessed. The nature of the heterogeneity and the size of the peer effect both have implications for the resulting diffusion process. Causal peer effects have implications for firms and policymakers, who have the ability to utilize social spillover effects in their marketing activities in order to increase and expedite solar adoption.

Solar photovoltaic (PV) electricity continued its remarkable growth trend in 2011, even in the midst of a financial and economic crisis and despite the PV industry going through a difficult period. Once again PV markets grew faster than anyone had expected, just as they have done for the past decade, especially in Europe but also around the world. While such a rapid growth rate cannot be expected to last forever in Europe, prospects for growth around the world remain high. The results of 2011 – and indeed the outlook for the next several years – show that under the right policy conditions, PV can continue its progress towards competitiveness in key electricity markets and be a mainstream energy source. The major system-price decrease that was experienced in 2011, combined with measures taken in Germany and Italy after the Fukushima nuclear disaster, allowed the market to further develop in 2011, particularly in these two countries. However, the price decrease also helped weaken the policy support in many countries, with policymakers facing growing discontent with regard to the perceived cost of PV and the ailing PV industry in Europe.

Recently, PV demand forecasting has seen greater contributions from countries that had previously been lumped together in the rest-of-world (RoW) bucket – a category previously reserved for the collective PV demand from countries or regions outside of major (FiT-stimulated) European PV markets. Research has shown that PV adoption outside Europe will not simply increase overall PV demand levels, but will assist in smoothing out erratic demand cyclicality. At first glance, the increased gigawattage of demand being added from the RoW grouping provides an essential component in driving long-term industry growth scenarios. Non-European PV demand is forecast to increase from approximately 30% to 60% of global PV demand between 2011 and 2016. However, more tangible benefits of having an increased number of countries feeding into the global demand mix extend beyond just the significant ‘growth’ potential this situation offers to the PV supply chain. Of these various benefits, perhaps the one that will provide the greatest level of comfort to the PV supply chain will be a collective ‘smoothing’ effect in quarterly demand swings. This should have a positive effect on factory shipment schedules and hopefully provide an end to some of the boom-and-bust cycles that have negatively impacted the fortunes of the PV supply chain during 2010 and 2011.