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What’s been happening in the PV market?

There is excitement building in the PV market as PV’s with the aid of continuing subsidies known as feed in tariffs and incremental improvements in technology begin to approach parity with the grid cost of electricity. Germany has held a leadership role accounting for 55% of industry demand recently and although it is not a particularly sunny place it has relatively high electricity costs to start with in addition to it feed in tariffs (a feed in tariff is a premium price per unit of electricity generated over the 20 year life of a project.) Geopolitically Germany is highly dependent on Russia for its natural gas. Germany became increasingly uncomfortable when Russia temporarily shut off the natural gas supply to the Ukraine in 2009. In spite of that Germany reduces somewhat its subsidy for new projects each year maintaining a balance the need for subsidies and the continuing improvements in technology. Spain provides a cautionary tale having offered a an enormous subsidy to PVs and other energy projects resulting an many projects that were uneconomic, withdrawal of the subsidies because of a negative reaction from the voters and a subsequent crash in cell prices and industry layoffs as well as useless infrastructure. Going forward Italy, the US, Japan and China are expected to drive 60% of the installation growth in 2010 and overall the market is expected to achieve a 33% growth.

PV ‘s already have grid parity in isolated areas of Italy. The US is driving the market forward with renewable energy portfolio standards, China has its Solar Rooftop Program and Golden Sun Program expected to begin impacting the market next year. Japan will be reinstituting its rebates and feed in tariffs.

We are approaching the turning point where PV technology is less dependent on economic incentives and during 2012 and 2013 unsubsidized PV technology may be viable in places where electricity rates traditionally have been high. Stay tuned, PV has arrived.

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