Solar Energy to Triple by 2018
Solar energy will triple to 430 GW by 2018, delivering the equivalent of 500 coal or nuclear plants, according to the latest “high scenario” from the European Photovoltaic Industry Association (EPIA). Even the low scenario of 321GW is impressive. With the price of solar modules 80 percent lower than in 2010 and complete systems half the cost of four years ago, it is not surprising that solar capacity is expected to quickly triple.
139GW of solar photovoltaic (PV) global capacity was installed by December 2013. This is more than triple the 2010 capacity of 40GW.
China has quickly grown to 34 percent of the global solar annual market; the rest of Asia 27 percent; all of Europe, 23 percent; the Americas, 15 percent. Thirteen of the world’s 15 top solar cell suppliers are now Asian.
At the Intersolar 2014 Conference it was clear that the growth of solar is being lead by China, Japan, the United States, and Germany. China is leading with in ground-mounted utility-scale solar and in large commercial rooftops. The USA is leading in solar bundled with innovative energy management and financial offerings.
China invested $56 billon in renewable energy in 2013. Last year, China installed more solar in 12 months than the United States has installed in 40 years!
In 2013, for the first time, there was a 29 percent drop in new thermal coal plant capacity. In the pipeline, however, are 70 new more efficient coal plants being built as older plants near large cities are scheduled for decommissioning. China uses over 4 billion tons of coal annually; four times the U.S. More energy efficiency and renewable energy is urgently needed.
China targets 15 percent of its electricity to come from renewables by 2020. China has more wind power installed than solar power, but the wind is strongest in remote areas where grid lines have yet to be installed. In contrast, most solar is being installed close to where the electricity will be used.
China is leading the world in volume solar cell and panel production, leading to an 80 percent drop in cell cost since 2010. In 2014, module prices are expected to drop below $.50/kW due to volume manufacturing, improved efficiency, and intense competition. Now, China also leads in ground-mounted utility-scale solar and in large commercial rooftops.
China’s western regions lead in ground-mounted large solar farms, especially in Gansu, Xinjiang, Inner Mongolia. In east coast population centers commercial rooftops are the fast growing solar segment. In China, high growth segments also include highways covered with solar, fish farms, and agriculture. A major opportunity in China is 5 million new buildings planned by 2030.
China will have 70 GW of solar installed by December 2018.
In the wake of the Fukushima nuclear disaster, Japan has an urgent need for energy efficiency and renewable energy. Japan installed 6.9GW of PV in 2013, more than any other nation except China.
Japan’s continued growth, however, is challenged by the utilities that favor central power plants, not distributed generation. Ten utilities control their own grids. Securing new grid connections will be difficult for solar users until grid transmission and distribution is upgraded. Also challenging in Japan is expensive land and half of existing roofs not being able to support the weight of PV.
Japan, however, will continue to experience strong solar growth. Japan now has one of the most generous solar tariffs in the world at $0.38/kWh Japan’s Ministry of Economy, Trade, and Industry (METI) has approved over 19 GW of PV project applications under its FIT scheme, Mercom Capital reports. METI targets 28GW of installed solar capacity for Japan by 2020.
Solar United States
The United States installed 4.8GW of PV in 2013, more than Germany or any other European nation, yet trailing China and Japan. California installed more solar in the past 18 months than in the previous 18 years, achieving over half of all new solar in the U.S.
In the U.S., 16 states have RPS requirements for more solar. Utility-scale solar will lead and in some areas accelerate with the use of large-scale storage, and smart grid technology, which can manage distributed variable renewables like a virtual power plant.
Although other countries lead in using feed-in tariffs (FIT), the United States leads in financial innovation that removes the barrier of large upfront capital expenditure. Residences to utilities use power purchase agreements (PPA). Shayle Kann, Sr. Vice President Research, GTM Research, forecasts a shift from only 34 percent of residential customers owning their solar. Non-PPA leases and other financing will be increasingly used. Kann also sees a shift from vertically integrated (e.g. SolarCity) to partner model (e.g. SunPower). GTM and SEIA Solar Market Insight Report.
Solar financing is now big business for securitization, green bonds, yieldcos, REITs as billions are invested in solar projects with predictable cash flows for 20 years and more.
California is the dominant installer of residential solar, which will be 33 percent renewable by 2020. California’s sever multi-year draught has reduced available hydroelectric power from within California and from imported hydroelectric power from the normally rainy Pacific Northwest. The draught has also raised costs for water-dependent nuclear and natural gas plants (California has no coal power plants). California is in an official draught emergency, which impacts the water/energy nexus.
Across the USA, commercial solar is fast growing with 100kW to 1MW installations representing half the commercial market, but 1MW+ being the fastest growing.
Utilities are seeing bids of 6 cents to 7 cents per kWh beating natural gas under the rules of PURPA. Georgia awarded 725MW of solar power, North Carolina 427MW, and Colorado 427MW.
The electric utility industry is being disrupted. There was a time when 10 percent annual growth was met with new centralized coal and gas plants. Now, in a more efficient USA, electricity demand is only growing one percent, solar can completely meet this incremental demand.
Solar, wind, biomass, geothermal, and hydropower provided 55.7% of new installed U.S. electrical generating capacity during the first half of 2014, notes Ken Bossong, Executive Director of the SUN DAY Campaign. For the first half of 2014, new generation capacity added was solar 32.1% (1,131 MW), wind 19.8%, biomass 2.5%, geothermal 0.9%, and hydropower 0.5%.
Forty-four percent (1,555 MW) of the new generating capacity was provided by natural gas. No new coal or nuclear power capacity for the U.S. was reported in the “Energy Infrastructure Update” FERC report.
The U.S. will also lead the world in energy storage everywhere from large-scale utility dispatched to transmission to distributed generation. Meeting of the Minds Energy Storage Article. With more storage, energy management, and smart grid, renewables will be able to meet 100 percent of U.S. new generation needs.
By the end of 2018, the United States could have 40GW to 60GW of installed solar capacity, as a nation second only to China.
Germany has long lead the world in installed solar power. Germany continues to lead in residential solar that includes storage. Even with declining FIT rates, German homeowners save money by installing solar. In 2013, Germany installed 3.3GW of PV, over double other leading European countries such as the UK, Italy and Romania.
While Japan still struggles in the wake of the Fukushima disaster, Germany has shutdown eight large nuclear reactors and replaced the output with added renewable energy and energy efficiency.
Renewables have gained increased importance, given Germany’s and much of Europe’s dependency on Russian pipelined natural gas for central power plants, peakers, industry and heating.
Residential storage plays a key role in Germany’s growth of solar power. EuPD Market Research expects solar power storage systems to rise in Germany to 100,000 units in 2018, up from 6,000 in 2013. Wind and solar, coupled with energy storage, can increasingly be used as virtual power plants. Renewable biomethane can replace some Russian natural gas. Energy efficiency further reduces the need for Russian fossil fuels.
Franz Untersteller MdL, Chairman German Conference of the Ministers of the Environment, stated that Germany intends to reduce GHG by 25 percent by 2020 over 1990, just six years into the future. In his State of Baden-Württemberg, they are moving even faster with near net-zero buildings and retrofits to add solar, and make HVAC and hot water more efficient.
Efficient solar homes and buildings are leading to efficient low-GHG neighborhoods, which are leading to entire cities with ambitions to be carbon-neutral. Germany plans to reduce GHG by 80 to 95 percent by 2040. Germany could be carbon-neutral by 2050.
Solar energy’s global installed capacity has tripled in the past four years, thanks to falling module prices and improved approaches to large-scale ground mounted, large commercial rooftop, and residential systems. Global solar capacity will again triple in the next four years with the added advantage of storage to use solar power when it is of greatest value. Leading the way are China, Japan, the United States, and Germany.
Solar energy is the fastest growing source of renewable energy. Wind, water, and sun (WWS Report) having the long-range potential to meet the world’s energy needs.