The importance of subsidies has been underlined in a new report Analysis of Worldwide Markets for Solar products and Five-Year Application Forecast 2011/2012 authored by Paula Mints and Jessica Donnell. They say the compound annual growth rate of grid-connected photovoltaics between 2006 and 2011 of 69% was driven "entirely" by feed-in tariff programs.
However, since these are undergoing many changes, particularly in the German and Italian markets, photovoltaics has become a less profitable investment prospect and instable. As such, "strong growth going forward should not be assumed. Nor," write Mints and Donnell, "can the solar industry be considered mature, at which slower growth is normal."
They go on to say that without incentives, grid connected photovoltaics cannot profitably grow. "Without support, and likely even with it, prices will be artificially low, and there will be little incentive," they add.
In addition to affecting margins and causing bankruptcies, Mints and Donnell say decreasing photovoltaic prices have led to both low quality products and system designs. Without continued support, they underline the fact that cost cutting operations will continue, in areas like installation. "Cutting costs in this regard will lead to substandard installations along with mind-share damage to a young industry that can ill afford it," they state.
They continue, "Some manufacturers have chosen to truncate the pilot scale phase and have rushed technology into commercial deployment before it is ready. Unlike software, which is always in beta, a solar system should not work out its bugs in the field."
Regarding grid parity, the authors say the solar industry has "ignored the realities of technology development" including R&D, pilot production and repetition. "The assumption has been that solar will reach grid parity without subsidies with conventional energy sources. As conventional energy will likely continue to receive subsidies this cannot be reasonably considered fair competition."
Planning is also said to be difficult in such an unpredictable market, "with little transparency and much obfuscation." With photovoltaic module supply continuing to outstrip demand, and sustained high inventories it is very difficult to obtain an accurate market picture, say Mints and Donnell. To ensure growth, they believe financing mechanisms are needed.
In addition to analyzing the global photovoltaic market, the authors also provided growth forecasts for the installation of photovoltaics (in MWs) taking into account the amount of shipped and installed modules in a calendar year based on 3 scenarios: reduced incentives (RI); conservative (cons.); and accelerated (acc.). See the table below for an overview.
|
Region |
2012 |
2013 |
2014 |
|||||
|
Cons. |
Acc. |
RI |
Cons. |
Acc. |
RI |
Con. |
Acc. |
|
|
North America |
2,943.4 |
3,467 |
3,337.7 |
3,374.4 |
5,058.2 |
3,572.7 |
4,689.7 |
7,170.9 |
|
Latin America |
98.1 |
126.1 |
206.5 |
334.9 |
447.7 |
178.6 |
750.3 |
843.6 |
|
Asia-Pacific-Oceania |
7,009.1 |
9,581.6 |
6,754 |
10,020.3 |
11,705.4 |
6,516.7 |
9,642.1 |
10,993.3 |
|
Europe |
14,122.3 |
17,681.8 |
8,111.9 |
11,385 |
23,802 |
7,256.5 |
11,046.1 |
21,866.3 |
|
Africa & Middle East |
355.7 |
661.9 |
319.1 |
644 |
1,138.1 |
339.1 |
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