Photovoltaic production has doubled every 2 years, making it the fastest growing energy technology.
Introduction
Humanity must develop efficient, cost effective solar power generating systems on a massive scale. There doesn’t seem to be any alternative, considering the world’s limited oil reserves and the apparently adverse effect that conventional energy generation is having on the earth’s atmosphere.
The world needs huge amounts of carbon-free electricity by 2050 to stabilize greenhouse gas emissions. Industrialized countries need to cut their electricity-generated carbon dioxide emissions by more than 80 percent in four decades. Developing countries need to find ways to raise living standards without increasing electricity generation emissions in the short term, and then reduce those emissions sharply in the long term.
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This electrical energy must meet a number of important criteria. It must be affordable: no more than 10 cents per kilowatt hour, a price that would probably beat nuclear power and would certainly beat coal with carbon capture and storage, assuming the latter proves practical on a large scale. The energy must also be conveniently and inexpensively stored. It should not use much freshwater or arable land, something likely to be scarce in a climate-changed world with 3 billion more people. Finally, it must be capable of producing thousands of gigawatts to both industrialized and developing countries.
Solar power is one of the few energy sources that meets these requirements. The benefits are compelling: environmental protection, economic growth, job creation, diversity of fuel supply, rapid deployment, as well as the global potential for technology transfer and innovation. Solar energy is free, abundant and inexhaustible. The sun irradiates the earth with enough energy to provide for annual global energy consumption 10,000 times over. We just have to harvest it.
We are just beginning the harvest. Photovoltaic (PV) production has doubled every two years, increasing by an average of 35 to 48 percent per year since 2002, making it the world's fastest-growing energy technology.
At the end of 2007, according to preliminary data, cumulative global production of solar PV systems was 12,400 megawatts. Roughly 90 percent of this generating capacity consists of grid-tied electrical systems. Such installations may be ground-mounted (and sometimes integrated with farming and grazing land) or structure-integrated. Financial incentives, such as preferential feed-in tariffs for solargenerated electricity and net metering, have supported solar PV installations in many countries including Germany, Japan, and the United States.
Market Dynamics
The PV industry has quietly boomed over the past decade, driven by concerns about climate change and energy independence. As these concerns continue to grow, governments will implement incentives to promote solar energy adoption and to shift electrical power generation away from fossil fuels.
These incentives are a necessary interim measure as the relatively nascent solar industry develops and achieves economies of scale, which in turn will lower the cost of PV installations. The goal is grid parity, the point at which solar energy costs approach that of natural gas, oil or coal energy costs.
The 2008 global terrestrial photovoltaic market was $20.2B, and will grow to $35.2B by 2012 at a compound annual average growth rate of 15 percent. This rapid growth comes from growing worldwide demand for renewable energy, and represents major opportunities for the compound semiconductors sector.
However, the PV market may stumble in the near term, suffering from the impact of 2008's financial meltdown (along with other restraining factors) for at least two years, before experiencing markedly higher growth starting in 2011. As a result, global demand for photovoltaic installations will slow from its previously robust compound annual growth rate (CAGR) of 15 percent, and will see growth averaging about 10 percent per year through 2013.
Solar cell and array prices are down. Although low prices typically attract investment, most companies just don't have the cash to invest in major solar installations, even if the long term ROI is favorable. The average price per solar watt will fall 12 percent in 2009, with photovoltaic revenue dropping a full 40 percent to just $18.2B, well below last year's $30.5B.
In terms of power, the industry will install just 3.5 gigawatts in 2009 compared with 5.3 gigawatts in 2008, a 32 percent slump. The Spanish government sparked this burnout; new tariffs caused Spain to drop from consuming 50 percent of the world’s solar array output in 2008 to near zero today.
Japan, the United States and Italy are among the countries that will drive demand, as ebbing subsidies shift growth away from Spain and Germany. This would lead to fewer new worldwide suppliers of photovoltaic cells entering the market and a slowdown in building new production plants.
One troubling market factor is sluggish global demand. Low PV promotion in Europe and the weak Asian and U.S. markets mean that demand for PV products may fall behind the production output boom.
Overall PV Industry Expects Growth
Recession aside, solar PV companies may be just starting a huge growth phase, driven by rising energy costs, increasing government incentives and innovative expertise. World photovoltaic market installations reached a record high of 2,826 megawatts (MW) in 2007, representing growth of 62 percent over the previous year.
But even as demand ramps up for solar energy, experts agree that the industry will come into its own only when solar becomes cost competitive by reaching grid price parity with conventional energy sources. Therefore the PV industry growth is, in the long term, independent of the political whims of governments providing subsidies.
In the short term, however, government incentives provide the economic offset to the higher cost of PV-generated energy. Without these incentives, PV would not currently be economically viable. Fortunately, the political environment is ripe for further policy action to incentivize investments in renewables such as solar photovoltaic as part of a portfolio of 'clean tech' energy solutions.
While these incentives continue to stimulate PV adoption, future incentives are uncertain particularly taking into account the world economic climate. The European PV industry is awaiting an overhaul of the existing feed-in tariff program, which expired last September. The US PV industry, the federal solar investment tax credit expired at the end of 2008.
Reaching Grid Parity
The concept of grid parity is difficult to measure, in part because various world governments tax and/or subsidize both conventionally-generated and solar power to varying degrees and because the amount of solar insolation varies greatly. The following chart, taken from the 2008 Global Solar Report Card, shows the countries closest to the upper right hand corner of the chart are the closest to reaching grid parity.
Photovoltaic Cell Technologies
Silicon photocells are widely used but the underlying technology is limited. More than 90 percent of the PV units supplied today are fabricated from silicon wafers, with much of the rest utilizing thin-film technology. Further, traditional crystalline silicon photovoltaic technology will probably retain its dominant position in solar markets for some time. New polysilicon manufacturing capacity will help create abundant module supply in the next few years, perhaps exceeding the market's ability to absorb new modules without significant price declines. Both U.S. and European analysts expect rapid price declines in the coming six to 18 months.
While crystalline silicon solar cells dominate the market, they cannot be used to produce tightly-rollable devices, transparent arrays or low cost power generation on flexible substrates.
Fortunately there are many new alternatives to crystalline silicon solar cell.
Companies such as innovalight and Kovio have developed proprietary nanoparticle silicon printing processes that can be printed reel to reel on stainless steel or other high temperature substrates, features that conventional silicon can never achieve.
Monocrystalline
Monocrystalline solar cells are cut from a single crystal silicon boule, the same material used for integrated circuits. This results in the most robust, most efficient and most expensive solar cells.
Multicrystalline (Polycrystalline, Polysilicon)
Polycrystalline solar cells are cut from a silicon boule that is grown from multifaceted crystalline material, or a crystal that grows in multiple directions. Conventional multicrystalline solar cells typically have a slightly lower efficiency than monocrystalline cells.
Thin Film (Amorphous)
Thin film refers to a layer of silicon material, used to form the solar cell that is deposited on a nonsilicon substrate such as glass, plastic or metal. While monocrystalline and polycrystalline modules (CSi) exhibit efficiencies of 13 to 15 percent, amorphous silicon (a-Si) is typically around 8-9 percent. Amorphous thin-film silicon is much less expensive. However, the cost of installation is typically much greater due to the fact that it requires much more area, material and labor for a given power rating.
PV thin film technology has important advantages over crystalline technology. First, the potential for cost reductions is higher – and second, there are manifold possibilities for product developments. Flexible substrates, for instance, allow development of new market segments.
Thin film’s inherently low cost and ease of manufacturing will become the major driving force of reducing solar power cost, although C-Si PV will still be the key product for a long time.
In 2007, US First Solar introduced low cost (1.3$/W) high efficiency (11 percent) thin film solar cells. Large EU and North American orders propelled US First Solar to high profits, revenue and reliability. The world had entered into the golden age of thin film solar.
Other companies have invested in thin-film technology. Japan Sharp has developed a mass production facility. German Q-CELL and Schott Solar have also made big investments in thin film solar cell technology. Taiwan started more than 10 thin film projects over a short period, and China Suntech has developed a successful commercial production facility.
The market for thin-film technology is not clear. According to one study14, the thin-film photovoltaics (TFPV) market will grow from almost $2.4B ($US) in revenues in 2008 to over $12B in 2013 and $22B by 2015. Another forecast predicts the TFPV market to be $3B in 2012 after a slow ramp up and then grow rapidly to $8B in 2014.
Thin film technologies will probably reach grid parity in Europe between 2012 and 2016, in which the cost per MW for thin film and conventionally-generated power is equal.
Cadmium Telluride (CdTe)
Another emerging material is cadmium telluride, which has both advantages and drawbacks.
- The photoelectric process requires just two cadmium molecules, cadmium sulfide and cadmium telluride. A simple mixture of molecules achieves the required properties, simplifying manufacturing compared to the multi-step process of joining two different types of doped silicon in a silicon solar panel.
- Cadmium telluride absorbs sunlight at close to the ideal wavelength, capturing energy at shorter wavelengths than is possible with silicon panels
- Cadmium is abundant, produced as a by-product of other industrial metals such as zinc.
While its 10.5 percent efficiency is much lower than a conventional 18-20 percent efficient polysilicon wafer, CdTe is much cheaper to manufacture; it costs about $2.48 (€1.58)/watt versus an average $4.35/watt for polysilicon.
US-based First Solar was formed in 1999 to exploit this new technology, attaining commercial production in 2002. The company claims to have achieved the lowest manufacturing cost per watt in the industry - $1.14/watt - for the first quarter of 2008.
Their two facilities - one in Perrysburg, OH, U.S., and the other in Frankfurt (Oder), Germany, make them the largest manufacturer of thin-film solar modules, with an expected manufacturing capacity of 495MW this year. This capacity is expected to double by the end of 2009.
While crystalline polysilicon remains the material of choice for the relatively decentralized panel applications usually used at individual homes and construction sites. CdTe’s lower production cost makes it ideal for very large electricity generating plants.
Copper Indium (di)Selenide (CIGS)
Thin film solar cells made from Copper Indium Gallium Diselenide (CIGS) absorbers show great promise in achieving high conversion efficiencies approaching 20 percent. The record high efficiency of CIGS solar cells (19.2 percent NREL) is by far the highest compared with those achieved by other thin film technologies such as Cadmium Telluride (CdTe) or amorphousSilicon (a-Si).
Most CIGS solar cells are produced using vacuum evaporation techniques which can be costly and time-consuming. The active elements - copper, indium, gallium and selenide - are heated and deposited onto a surface in a vacuum. Using vacuum processing to create CIGS films with uniform composition on a large scale has also been challenging.
Researchers at UCLA have recently developed a process in which copper-indium diselenide layer, which is in solution form, can be easily painted or coated evenly onto a surface and baked. This has the potential of reducing the cost of CIGS cells.
Gallium Arsenide (GaAs)
Gallium arsenide (GaAs) is a compound semiconductor, combining two elements, gallium (Ga) and arsenic (As). GaAs is especially suitable for use in multijunction and high-efficiency solar cells for several reasons.
- The GaAs band gap is 1.43 eV, nearly ideal for single-junction solar cells.
- GaAs has an absorptivity so high it requires a cell only a few microns thick to absorb sunlight.
- (Crystalline silicon requires a layer 100 microns or more in thickness.)
- Unlike silicon cells, GaAs cells are relatively insensitive to heat, making them appropriate for concentrator applications where cell temperatures can often be quite high.
- Alloys made from GaAs using aluminum, phosphorus, antimony, or indium have characteristics complementary to those of gallium arsenide, allowing great flexibility in cell design.
GaAs provides a wide range of possible design options. A GaAs base can have several layers of slightly different compositions that can be optimized for efficiency approaching theoretical limits. To accomplish the same thing with silicon cells requires variations in the doping level, limiting effectiveness.
The greatest barrier to the success of GaAs cells has been the high cost of a single-crystal GaAs substrate. For this reason, small (0.25 cm2) GaAs cells are used primarily in concentrator systems that produce power under high light concentrations. Researchers are also exploring approaches to lowering the cost of GaAs devices, such as fabricating GaAs cells on cheaper substrates; growing GaAs cells on a removable, reusable GaAs substrate; and even making GaAs thin films similar to those of CIGS and CdTe.
Organic Photovoltaic
Organic PVs use organic polymers made from carbon-based molecules or plastics that are conductive in nature. Conventional PVs use inorganic metal conductors such as silicon or copper. Organic electronics are becoming increasingly important due to their low fabrication cost and great flexibility.
Organic photovoltaics are potentially very important for the solar energy market because they are fabricated using low-temperature, high-speed, roll-to-roll processes which are inherently less expensive than conventional silicon wafer fabrication processes. Although thin-film organic device efficiency falls short of inorganic counterparts, the technology nevertheless is gaining momentum given its potentially cost-effective results.
One new type of organic cell is the dye-sensitized solar cell (DSSC, DSC or DYSC), a relatively new class of low-cost, thin film PV cell. It is based on a semiconductor formed between a photo-sensitized anode and an electrolyte, a photoelectrochemical system. This cell was invented by Michael Grätzel and Brian O'Regan at the École Polytechnique Fédérale de Lausanne in 1991and is also known as a Grätzel cell.
Concentrated Solar Power (CSP)
CSP technology converts sunlight into heat energy rather than electrical energy, and thus CSP is not a PV technology. However, as this technology matures and the resulting cost per kilowatt lowers, it can affect the market for competing PV technologies. This section is meant to provide a brief overview of the current state of CSP development.
CSP has the potential to generate massive amounts of electricity, according to a new study conducted by industry groups. Recently, a research expert noted that the strong sunlight in the Sahara Desert has the capacity to supply all of Europe’s electricity needs by installing an array of solar panels.
Fig 6 Concentrated solar power farm showing automatically focusing mirrors
Solar thermal plants covering the equivalent of a 92-by-92-mile square grid in the U.S. Southwest could generate electricity for the entire United States. Mexico has an equally enormous solar resource. China, India, southern Europe, North Africa, the Middle East and Australia also have huge resources.
The key attribute of CSP is that it generates primary energy in the form of heat, which is 20 to 100 times less expensive to store than electricity -- and with far greater efficiency. Commercial projects have already demonstrated that CSP systems can store energy for hours as heated oil or molten salt. Ausra and other companies are working on storing the energy as heated water in the tubes, which would significantly lower cost and avoid the need for heat exchangers.
Inexpensively storing energy may give CSP a crucial -- maybe the crucial -- advantage over wind and solar photovoltaics.
In June 2007, Nevada Solar One, the state's first CSP plant, went online. On 275 acres near Boulder City, it provides 64 MW of electricity from 98 percent solar power and 2 percent natural gas. Another 10 plants are in the advanced planning stages in the Southwest, along with nine plants in countries that include Israel, Mexico and China.
CSP costs have already begun to decline as production increases. Costs are projected to drop to 8 to 10 cents per kilowatt hour when capacity exceeds 3,000 MW. The world will probably have double that capacity by 2013. The price drop will likely occur despite high prices for raw materials like steel and concrete.
Concentrated Solar Photovoltaics
Researchers recently focused 230 W of light power on to a square centimeter of solar cell using a concentrator system. The energy was then converted to 70 W of usable electric power. The 30 percent conversion efficiency is the best yet achieved. The cell system uses a very thin liquid layer made of a gallium and indium compound applied between the chip and a cooling block. Such layers, called thermal interface layers, transfer the heat from the chip to the cooling block to limit chip temperature rise. The researchers suggest that if the silicon can be cooled effectively, concentrated photovoltaics could produce the cheapest solar energy.
Scientists at the U.S. National Renewable Energy Laboratory recently boosted the efficiency record of such photovoltaics to a full 40.8 percent, by using three layers of special photovoltaic material and the equivalent of the amount of light put out by 326 suns.
California Initiatives
Despite a credit freeze that is stunting renewable-energy projects throughout the country, 2008 was a hot year for solar power in California. According to the California Public Utilities Commission, homeowners and businesses installed a record 158 megawatts of photovoltaic panels despite the recession.
Launched in January 2007, the California Solar Initiative is an attempt to push photovoltaics on a massive scale in California to help cut greenhouse gas emissions and shore up the state's energy supply. The program, funded by utility ratepayers, offers rebates to those who install panels on their homes and businesses. Refunds are typically 20 to 50 percent of a system's cost.
Solar installations would seem a luxury in the current dismal economy. But experts said new federal tax breaks, on top of already generous state incentives, are encouraging some Californians to take the plunge. As of Jan 1, 2009 homeowners are eligible for tax credits of up to 30 percent of the entire cost of their projects.
The amount of solar photovoltaics harnessing electricity from sunshine in the U.S. will more than double by 2013, thanks to plans to install 800 MW in California. The two vast solar farms—covering more than 12 square miles—will be among the largest ever built in the world and dwarf the current U.S. record holder, Nellis Air Force Base in Nevada with 14 MW. In fact, the total amount of solar photovoltaics connected to the grid in the entire U.S. is just 473 MW at present.
Once fully operational in 2013, the two farms would provide 1.65 B kWh of electricity per year— peaking in the afternoon on the sunniest days just when electricity demand is at its highest—enough to power 239,000 California homes or 800 Wal-Marts (discount goods store). Optisolar will employ 550 MW of its amorphous silicon thin-film solar panels at its Topaz Solar Farm project in San Luis Obispo, California, while SunPower will install mechanical tracking for its more expensive 250 MW of crystalline silicon photovoltaics at High Plans Ranch II in a bid to boost their efficiency by 30 percent by following the sun across the sky.
And although the two massive solar farms will help utility Pacific Gas & Electric meet the California mandate of sourcing 20 percent of public utilities power from renewable resources, they may suffer financially if the federal government does not extend an investment tax credit program that rewards the development of such projects.
Other Solar Installations
Completed last year, the Acciona Amareleja (Moura) PV solar farm plant in Portugal is currently the world's biggest, producing 93 million kWh of electricity per year, enough for 30,000 Portuguese households. The 45 MW plant - built and run by energy company Acciona Solar - is the latest in a long line of sustainable energy projects being constructed in Portugal, which has few natural resources aside from an over-abundance of sunshine.
China has contracted First Solar to build what may eventually be the largest solar PV field in the world.20
The 10-year project would blanket Inner Mongolia with 25 square miles – slightly larger than the size of Manhattan - of PV arrays. This project, to take place in China’s vast desert north of the Great Wall, would dwarf anything in operation in the US or Europe. The installation would produce 2 GW, about the capacity of two coal-fired generation plants, and would supply enough power for 3 million homes.
In Europe, Desertec is an huge solar thermal program that will install fields of mirrors in the Sahara desert, gathering solar rays to boil water, turning turbines to electrify a new carbon-free network linking Europe, the Middle East and North Africa.
The $50B initiative would be the world’s largest and most ambitious solar power project, generating up to 100 gigawatts (GW) of electricity in North Africa and the Middle East, spanning an arc from Turkey through Saudi Arabia to Morocco. In July 2009 twelve of Europe's leading corporations, including financial giants Munich Re and Deutsch Bank, the mega-utility E.ON, and engineering powerhouses ABB and Siemens, signed an agreement to build Desertec.
To Learn More About Photovoltaics & The PV Market
productronica 2009 (November 10-13, 2009, Munich) will feature a special forum on “Boosting Photovoltaics to Grid Parity” as well as other PV-related events. See the productronica program for more information.
Fig 7 Visitors walk through the Amareleja PV solar farm in Portugal. Solar PV installations can help countries that are poor in other natural resources.
For more information visit www.productronica.com