28 December 2007

Clean Tech: Solar Cell Production up in 2007, Says Earth Policy Institute

Lester Brown's Earth Policy Institute (EPI) has issued its "Eco-Economy Indicators" for the global solar industry in 2007. And it's positive news. Here are the "top ten points of light" from the report as I see it:

1.) Production of photovoltaics (PV) jumped to 3,800 megawatts worldwide, up an estimated 50 percent over 2006. At the end of the year, according to preliminary data, cumulative global production stood at 12,400 megawatts, enough to power 2.4 million U.S. homes. This represents an average growth of 48 percent each year since 2002 -- essentially doubling every two years.

2.) Among PVs, new thin-film technologies, such as that being developed by Green Skeptic-favorite First Solar (FSLR), is fast-growing taking advantage of the worldwide shortage of polysilicon, which is used in more traditional solar cell technologies. EPI reports that thin film grew from 4 percent of the market in 2003 to 7 percent in 2006. Polysilicon supply is expected to match demand by 2010, but not before thin film grabs 20 percent of the market.

3.) The top five PV-producing countries are Japan, China, Germany, Taiwan, and the United States, according to EPI. After almost tripling its PV production in 2006, China is believed to have more than doubled output in 2007. With more than 400 PV companies, China’s market share has exploded from 1 percent in 2003 to over 18 percent today. Having eclipsed Germany in 2007 to take the number two spot, China is now on track to become the number one PV producer in 2008. The United States, which gave the world the solar cell, has dropped from third to fifth place as a solar cell manufacturer since 2005, overtaken by China in 2006 and Taiwan in 2007.

4.) China is planning a 100-megawatt solar PV farm in Dunhuang City in the northwestern province of Gansu, which would have five times the capacity of the largest PV power plant in the world today.

5.) Despite its skies being cloudy two thirds of the time, Germany has been the leading market for PV installations since it overtook Japan in 2004. In 2006, Germany, adding 1,050 megawatts, became the first country to install more than one gigawatt in a single year. Japan, the United States, and Spain round out the top four markets with 350, 141, and 70 megawatts installed in 2006, respectively. (See EPI data.)

6.) Growth in US installations increased from 20 percent in 2005 to 31 percent in 2006, primarily driven by California and New Jersey. The California Solar Initiative was launched in January 2006 as part of the state’s Million Solar Roofs program to provide more than US$3 billion in incentives for solar power. The goal is to generate 3,000 megawatts of new solar power statewide by 2017. New Jersey’s Clean Energy Rebate Program, which began in 2001, offers a rebate of up to US$3.50 per watt for residential PV systems, contributing to a more than tripling of installations between 2005 and 2006.

7.) Of the world’s PV manufacturers in 2007, Sharp (Japan), Q-Cells (Germany), and Suntech (China) claimed the top three positions. (See EPI data.) But after holding the top spot for more than six years, Sharp, hampered by limited access to polysilicon, is likely to post only a 4-percent growth in production in 2007, well below the 50 percent industry average.

However, Sharp’s annual thin-film production capacity is on track to increase from 15 megawatts today to 1,000 megawatts per year in 2010. Suntech, a relatively new firm started in 2001, was the fourth-largest PV manufacturer in 2006, and eclipsed Kyocera in 2007 to take third place. In the first half of 2007, Suntech produced almost as much PV as it did in all of 2006.

8.) Capitalizing on the polysilicon supply crunch, First Solar in the United States moved into the top 15 global manufacturers in 2006 by producing 60 megawatts of cadmium telluride thin-film PV, triple its production in 2005. In the first half of 2007, First Solar leapt onto the top 10 list, moving up five spots to number eight and continuing its reign as the fastest-growing PV manufacturing company in the world.

9.) The average price for a PV module, excluding installation and other system costs, has dropped from almost $100 per watt in 1975 to less than $4 per watt at the end of 2006. (See EPI data.) With expanding polysilicon supplies, average PV prices are projected to drop to $2 per watt in 2010. For thin-film PV alone, production costs are expected to reach $1 per watt in 2010, at which point solar PV will become competitive with coal-fired electricity.

10.) With concerns about rising oil prices and climate change spawning political momentum for renewable energy, solar electricity is poised to take a prominent position in the global energy economy.

For a more complete report, see EPI Eco-Economy Indicators: Solar

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