The global market for photovoltaic technology has been variously described as ‘emerging, exciting, risky, nascent, amazing, volatile, and evolving’ but there is no doubt that it is significant and growing very rapidly.
In 2010 PV solar energy has come of age with the critical number of successful trials and reference accounts achieved, solar module prices declining more rapidly than industry predictions, and cost parity with grid power expected in many locations, within a 2-5 year timeframe.
The total value of PV solar module production in 2009 was estimated at $19.6bn and forecasts suggest that this figure will be $125.5bn by 2016. Predictably, the manufacture of solar cells is dominated by Asian countries – with China and Japan producing 49% in 2009. The financial constraints affecting Western manufacturers during 2008/9 have exacerbated this trend and threatened the viability of many German producers who accounted for 21% of output in 2008.
Taiwan in particular has emerged as a strong challenger, wielding both technical expertise and cash to boost its global market share to 27% in 2010.
New entrants into the business of PV manufacturing include Samsung and LG Electronics, who are already well-known leaders in the field of LCD flat panel production.
One of the underlying forces driving the growth in this market is the now widely accepted reality that petroleum prices are never going to return to the $25-50 range, because however uncertain the date may be, peak oil is going to happen.
The other is the acceptance that the continued growth in fossil fuel emissions is a serious risk factor influencing the world’s climate, with potentially massive cost implications.
In response to these twin motivating factors, many governments have implemented policies to subsidise the cost of installing PV solar installations, with the intention of enabling the PV industry to ramp-up its scale of operation, drive down unit costs and so, close the cost gap permanently.
The most effective mechanism appears to have been by requiring power utilities to purchase PV-generated power that is fed into the national grid at a Feed in Tariff (FiT) that can be adjusted to provide the appropriate level of stimulus. Policy often requires at least 60% of locally manufactured content in order for any given installation to qualify for the FiT or subsidy.
Operators of PV installations, whether they be households or commercial entities, are therefore able to sell any electric power in excess of their own requirements back to their power supply utility. The city of Berkeley in California recently voted approval to provide finance to homeowners wanting to install PV solar panels, by selling bonds to raise capital. The debt would be amortized along with annual property tax payments and transferable with the property if sold.
Following the global financial squeeze during 2008 that coincided with a near collapse in demand from Spain, the global market for PV solar installations surged ahead of the most bullish predictions to log 7.2 GW of new installed capacity.
The annual growth in cumulative installed capacity is expected to be close to 50% for the third consecutive year.
Rapid growth in the demand for PV solar installations has been concentrated in those markets where the incentives were greatest, including Germany, Spain, Czech Republic, California, Japan, Canada and more recently, in Brazil and Mexico. One negative effect of the industry’s reliance on subsidies, is that demand has been seen to swing very rapidly in both directions in response to politically motivated shifts in the FiT.
There are serious concerns that changes being discussed now in Germany could reverse the massive demand surge of late 2009 and that other markets will not be able to take up the resulting oversupply. World production of PV solar modules peaked at 9.34 GW in 2009 and overshot demand for that period by 23%.
As recently as 2005, the cost of PV electricity was above €0.40 per kWh, 10 times higher than grid power-generated from fossil energy and without large subsidies or special circumstances, offered very little prospect for market growth.
The main cost element of early PV modules was the price of crystalline silicon panels and the silicon raw material maintained a price level of $400/kg through until 2008. Since then the silicon price has crashed to $50/kg, allowing PV modules to be sold at dramatically lower prices.
Competition from alternative materials of construction, including Amorphous silicon and thin film semiconductor panels, has also helped to lower prices. But possibly the strongest depreciating factor has been the market surplus of silicon raw material caused by project cancellations during the global recession, and sharp declines in demand triggered by policy shifts and reduced subsidies.
Despite recent improvements in conversion efficiency and attractive pricing, it is interesting to note that the production of thin film modules represented only 18% of the new capacity manufactured in 2009. Another innovation that complements PV solar technology and allows surplus energy to be stored for use at night is the thin film battery. These are likely to power electric vehicles or be ground-mounted adjacent to homes and apartment buildings.
While players can be expected to come and go, and growth trends to fluctuate, sustainable solar energy is now a worldwide reality. PV technology has captured the imagination of consumers, vendors, governments, politicians, oil producers, and the utility industry alike.
The technology works; the useful life of solar panels is estimated to exceed 25 years and the payback on initial investment depends on what form of energy it replaces. If used to recharge an electric vehicle, it can be as short as eight months.
PV solar technology promises the cheap, clean, dependable energy source needed to drive industrial growth, but as yet the total capacity is still insignificant compared to global electricity demand. It has been estimated that by 2050, up to 11% of global electric power will be provided by PV solar installations.
If installed capacity continues to grow at the recent rate of expansion, then PV solar power could become the dominant energy source within a few decades and expected future gains in conversion efficiency will also accelerate progress.
Before PV technology can achieve its full potential and be integrated on a large scale into the envisaged flexible, efficient smart power grids of the future, power management and energy storage issues will require attention. Future technical developments need to be guided by appropriate standards and existing regulatory frameworks will need modification.
Ironically, the manufacture of PV solar panels requires the use of many toxic and dangerous materials that unless managed with care, can pose environmental risks to offset the benefits of clean renewable energy.
The pioneers of electronic semiconductor manufacturing in places like Silicon Valley (US) and Germany have coped with these hazards competently for many years. Globalisation is driving more and more production capacity into recently industrialised zones, where regulatory and safety management practices are relatively undeveloped.
Recent tragic incidents involving silane that occurred in Taiwan and India have underlined the enormous responsibility carried by this fledgling industry, to ensure that safe manufacturing practices are always implemented.
Silane is a particularly dangerous compound, referred to as pyrophoric because its autoignition temperature is lower than ambient and therefore it spontaneously combusts when exposed to air.
It is widely used to deposit silicon molecules by chemical vapour deposition (CVD) in the manufacture of not only PV panels, but also flat panel displays, semiconductors and coated glass.
Silane is not the only toxic or reactive molecules that the PV industry uses, but it has been involved in 10 fatalities in the last 20 years and it has been linked directly to the only deaths recorded in the solar industry. Companies like General Electric have decided to invest in competitive thin film technology in order to avoid the obvious risk involved in silicon processing with silane.
Implications for the gases industry
All of the world’s major industrial gas companies are long standing suppliers and partners in the manufacturing of silicon-based devices, having served the electronics industry for the past 30 years and more.
Now they are extending their network of service and expertise to provide reliable, continuous supplies of a range of high-tech gases, to support the rapidly maturing PV manufacturing industry. Gases are critical to the production of solar cells, and can account for up to 20% of the total cost of thin film silicon manufacturing.
Whether a project is planned for California, Germany, China, India or Taiwan, the same level of commitment to providing the right gases certified to the right specification is available to ultimately ensure success for PV manufacturers.