Japan retains global lead in solar PV capacity

ST URSEN, Switzerland, 2004-12-08 Refocus Weekly

Japan remains the leading country in the world for solar PV, both in terms of new installations and per-capita capacity.

It installed 222,781 kW of new panels last year, to boost its cumulative total to 859,623 kW, according to a survey of selected countries by the PhotoVoltaic Power Systems program of the International Energy Agency. That compares with the 410,300 kW cumulative total in Germany and the 275,200 kW in the United States.

Of the total in Japan, 777,830 kW is distributed grid-connected power, with another 2,900 kW in centralized grid-connected capacity. In off-grid applications, 1,101 kW was in domestic and 77,792 kW in non-domestic use.

On a per capita basis, Japan has 6.74 watts per person, ahead of 4.97 per capita in Germany, 2.88 in Switzerland, 2.83 in the Netherlands and 2.29 kW in Australia. The two lowest per-capita countries are Israel at 0.09 watts per person and the UK at 0.1.

Of the cumulative total of 1.8 GW of PV capacity in the PVPS members, 85% is based in just three countries. The annual rate of growth has varied between 20% in 1994 to 40% in 2000, but the growth between 2002 and 2003 was 36% and similar for the last three years, it explains.

Japan, Germany and U.S. account for 88% of total installations last year and, “not surprisingly, these are the countries with the continuing generous levels of grant or tariff support for projects that concentrate on grid-connected installations in the urban environment.” New support measures in Italy and Austria have resulted in high levels of activity while, in contrast, “those countries without such incentives tend to have a lower level of growth which is mainly concentrated in the off-grid market.” The Netherlands recorded a surge in growth in 2003 amounting to 43% of the total size of its PV market.

Since 1999, most of the PV capacity has been connected to utility grids although this is not the case in half of the reporting countries. In Sweden, Norway and Finland, the most common off-grid applications are vacation cottages, while Australia, France and Mexico use off-grid PV to provide rural electrification. In Canada, Israel and Korea, commercial and telecommunications applications are the dominant application.

“Due to the impact of the large-scale support measures available in some countries, the proportion of capacity that is connected to the grid continues to rise, reaching 78% in 2003, up from 74% the previous year,” it notes. Almost all are distributed systems, while domestic applications account for 39% of off-grid capacity.

Prices for entire PV systems vary widely and depend on a variety of factors, but most countries reported a decline in system prices over 2002 with prices for off-grid applications higher by a factor of two than those for grid-connected applications (the latter do not require storage). Last year, off-grid system prices (less than 1 kW) varied from US$8 to $25 per watt, while the installed price for grid-connected systems was $5 to $7 per watt.

Module prices of $3.50 to $4 per watt “appear achievable in the majority of countries and nearly all of the major markets,” with indications that the current lowest price of modules is below $3.

There are several plans for investment in specialized production capacity for PV solar grade silicon, but the report warns that “the lead times for such investments may be too long to avoid a temporary lack of low cost feedstock in the next two years.” A shortage would increase the production cost for PV modules “but this impact is not likely to be serious if it remains temporary.”

“Permanent shortage of low cost high-quality silicon would have a more negative influence on further growth of the industry and higher prices would be the logical response,” it concludes. “On the one hand, this could have unpleasant political side effects since the PV market still remains strongly dependent on politically motivated subsidies, but a shortage of low-cost silicon may also cause the market structure to alter by changing some of the current cost differentials between various PV technologies.”

“Climate change policies have raised the profile of renewable energy in general and security of supply issues have raised political interest in all domestic and distributed energy supplies, but the implications specifically for PV remain uncertain,” it notes. “The industry development aspects of PV (including the opportunities to provide jobs) have received attention with the publication of a number of ‘technology roadmaps’ and national budgets for PV “remain strong.”

The annual IEA survey of PV applications and markets are conducted in 20 countries, and is limited to PV applications with a rated power of at least 40 watt. IEA claims the national data are accurate to "10%, although production and system prices vary “depending on the willingness of the relevant national PV industry to provide data for the survey.”

This survey is the ninth and provides an overview of PV power systems at the end of 2003, with trends for the period from 1992 to 2003.


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