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Solar Power Experiences Strongest Year of Growth Yet

Posted by Lindy on June 19, 2009


From an article by by Yingling Liu / June 18, 2009

http://www.worldwatch.org/node/6156?emc=el&m=258906&l=4&v=0acf32e1b9

solar-pie chart 2008The year 2008 saw the most phenomenal growth in the solar power market yet, with dramatic increases in installations of solar photovoltaics (PVs), which generate electricity directly from sunlight, and solar thermal plants, which use the sun’s heat to produce power. The latter include concentrating solar power (CSP)—a technology that uses mirrors to reflect and concentrate sunlight to heat water to drive a steam turbine for electricity generation—is expanding in many regions.

Newly added PV power installations amounted to 5,600 megawatts (MW), in one year increasing by more than half  cumulative total of 9,000 MW to almost 15,000 MW by the end of 2008.

Europe remains the leading market for PVs, accounting for over 80 percent of world demand in 2008. Spain overtook Germany to become the number one solar PV market worldwide, with its market increasing in one year from 560 MW to an estimated 2,600 MW in 2008. This 300+ % growth accounted for almost half of all new installations in 2008. Germany followed in second place, with new installations of about 1,500 MW.

The United States came in a distant third, adding approximately 348 MW, followed closely by Italy, South Korea, and Japan.

The phenomenal growth in the top two national PV markets—Spain and Germany—suggests that government support programs are pivotal in the development of the solar market. A feed-in tariff policy in Spain requires utilities to buy electricity generated from solar power projects at premium guaranteed long-term prices that are set by the government, an incentive introduced to encourage the adoption of renewable energy. The lucrative solar electricity rates in Spain fanned unexpected enthusiasm from the industry.

However in September 2008 the government considerably reduced the feed-in tariff payments and put a cap on annual PV installation from 2009 through 2010, aiming at a target of 3,000 MW by the end of 2010. This policy change is expected to slow the PV market in Spain significantly over the next few years.

Germany, which was the number one solar market for years, also has a feed-in tariff program for renewable energy. It aims to reduce the premium solar electricity rates gradually and predictably until solar energy achieves price parity with conventional power. As the result of amendments to the German law in mid-2008, payments for PVs declined considerably starting in January 2009, reflecting a reduction in installed cost. The stability and consistency of Germany’s feed-in tariff has proved beneficial for continuous market development, and the country is expected to regain the top PV market position in 2009.

The Chinese PV industry is leading in silicon-based cell production, primarily to meet soaring demand from Spain and Germany. Combined Chinese and Taiwanese production accounted for 39 percent of the global cell output in 2008, up from only 7 percent in 2004.

On an individual company basis, the German company Q-Cells was the number one producer of solar cells in 2008, First Solar of the United States ranked second, and Suntech of China came in third.22

Cconcentrating solar power (CSP)— has seen considerable development in the United States, with more than 350 MW of CSP built in California between the mid-1980s and the early 1990s. The country also hosts one of the world’s largest CSP plants, the 64-MW Nevada Solar One CSP plant. The Mediterranean region has started to see increasing new CSP capacity as well, making Europe, North Africa, and Middle East a potential global hub for CSP generation. Two new CSP plants came on-line in 2008—the 50-MW Andasol-1 plant in Spain and a 5-MW plant in California. Projects with more than 6,000 MW of capacity are now in the pipeline in the United States, mostly planned for California, Arizona, and Florida. Over 3,000 MW of CSP projects have been announced in Europe, North Africa, and the Middle East; out of these, 2,500 MW are to be built in Spain. Israel and the United Arab Emirates opened tenders for 350 MW projects in the Middle East during 2008, and projects are now planned for Algeria, Morocco, and Egypt.

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