This year we will cross the threshold of 10 gigawatts of photovoltaic solar installed globally in a single year -- a record-setting and once-inconceivable number. The analyst community sees the total number for 2010 in the 12 gigawatt to 15 gigawatt range. Expectations for next year are close to 20 gigawatts.
Rewind to ten years ago: the total amount of photovoltaics installed in the year 2000 was 170 megawatts. Since then, the solar photovoltaic industry has grown at a 51 percent annual growth rate, and 170 megawatts is now the size of a healthy utility installation or a small solar factory. Suntech has a single building with a one-gigawatt capacity.
Photovoltaic module pricing has made radical progress, as well, moving from $300 per watt in 1956, to $50 per watt in the 1970s, to $10 per watt in the 1990s, to $2 per watt today. It's not exactly Moore's law, but it is that drop in pricing, chicken-or-egg with policy and technology, that is driving this industry. Pricing of $1 per watt is not that far off.
Ten gigawatts is a significant milestone for the PV industry, but it warrants some perspective:
- That's the total power that five or six nuclear power plants generate -- and there are about one hundred nuclear plants in the U.S. alone.
- The wind industry installed 27 gigawatts in 2008, 38 gigawatts in 2009 and has a total installed base of more than 158 gigawatts compared to PV's installed base of about 20 gigawatts. 2010 will see more than 200 gigawatts of installed wind and the Global Wind Energy Council expects that to double to 400 gigawatts by the end of 2014.
A few more points about today's PV market: From a demand standpoint, it's healthier, with less reliance on "savior" markets and feed-in tariff hot spots. Note the diminishing reliance on Germany as solar savior in the chart below and get many more details in Shayle Kann's recent PV demand analysis.
From a supply standpoint, the market is less healthy -- over-supplied and ripe for consolidation.
Still, the 10-gigawatt-PV-installed mark will occur, barring disaster, sometime in October. Our calculations put it at 2:15 PM on October 13. It's a milestone worth noting and a stepping stone, as Jeff Wolfe notes below, on the way to 100 gigawatts installed in 2020.
Here are some reflections on the achievement from some of the technologists, entrepreneurs and investors making it happen:
Steven Strong, President Solar Design Associates
My first ‘big opportunity’ out of engineering school in 1973 was landing a job working for the oil companies as an engineer on the Alaskan pipeline. In early October (of 1973), the Arab/Israeli Yom Kippur war broke out and, within days, precipitated the first world oil embargo. The Western world was broadsided and convulsed with the stark realization of how dependent we were on OPEC oil. At that time, the U.S. imported ~15% of its oil. Today that figure is ~70%.
The very next week, as the war raged on and gasoline lines grew in every Western city, the scientists, engineers and researchers who had perfected photovoltaics for space-based power systems came together in Cherry Hill, New Jersey to begin to explore how this life-affirming technology could be used for terrestrial electric power. This first world colloquium on “Photovoltaic Conversion of Solar Energy for Terrestrial Applications” was planned for months and just happened to take place as the world was gripped by the first OPEC oil embargo.
The convergence of these two events was an epiphany for me as the stark contract of these two energy sources and the future they portended became clear: Clean, Inexhaustible, Free, Life-Affirming v. Polluting, Finite, Costly and a Devil’s Bargain. I could not stop thinking about it. The prospect, however nascent, of leveraging my engineering skills to build a career in solar energy became increasingly compelling.
As the world price of oil skyrocketed from $3/bbl to over $12, ALYESKA (the pipeline consortium) furiously threw money at the design and construction effort. The pipeline was attractive at $3/ bbl, and now ‘their’ Alaskan oil would fetch over four times that amount! It was a heady time in Alaska -- greed stoked with patriotism marshaled a military-like campaign to Get the Pipeline Done and get “our oil to market.” With unlimited overtime and performance bonuses, our weekly pay exceeded most people’s regular monthly salaries.
Was going to the end of the earth to extract the last of the fossil fuels the best use of my budding skill set? Despite the bonanza, I resigned from my pipeline position and, not really knowing any better, founded Solar Design Associates in the spring of 1974 to offer design services in energy-autonomous buildings and the engineering and integration of the renewable energy systems to power them. About this same time, Dr. Joseph Lindmeyer was founding Solarex -- one of the first U.S. PV companies. Crystalline PV was < $30 / Wp, and the Japanese government inaugurated their “Project Sunshine,” a high-level, coordinated, 25-year program with the goal of commercializing PV for widespread, cost-competitive terrestrial use by the year 2000.
In 1975, the U.S. government authorized NASA’s Jet Propulsion Laboratory (JPL) and their Lewis Research Center (LeRC) to pursue a major development program for terrestrial PV, Bill Yerkes launched Solar Technology International, and Ishaq Shahryar founded Solec International. Tyco labs grew crystalline EFG ribbon and Exxon expanded operations at Solar Power Corp. By 1977, PV modules had come down into the $20 / Wp range and total annual PV production exceeded 500 kWp worldwide, which was heralded as a major milestone.
In 1978, we designed and fielded the world’s very first utility-interactive PV system (outside the fence of the government labs) -- a 5 kWp system here in Quincy, MA that was used to power the pumps and controls of a 7,500 sq.ft. solar thermal system -- and went on to design and constructed the world’s very first zero-net energy, solar-powered, utility-interactive residence here in Carlisle, MA in 1979. The rest, as they say, is history.
Julia Hamm
President & CEO
Solar Electric Power Association
It's hard to believe that I've been involved with the solar industry for 11 years now. What makes me a veteran in the solar realm still leaves me as a newcomer to the larger electric industry. But in those years, I've seen the U.S. solar market blossom and believe we are just now on the verge of the true mainstreaming of PV.
When I first started working with electric utilities back in 1999, the topic of solar almost never reached the executive level. Today, many large utilities across the U.S. have a Vice President of Renewables, and solar is an important part of their energy supply strategy for the near- and long-term. Solar is now a frequent topic of discussion in the utility boardroom and office of the CEO. PG&E, a single utility, has already announced plans for more than 1.5 GW of utility-side meter PV projects to come online between now and 2016. That does not take into account other future large-scale project plans yet to be announced and the significant amount of PV that will continue to be integrated into PG&E's grid by its customers. Most exciting about what is now happening is that it's no longer only California utilities that are recognizing the value and importance of PV. Utilities from New York to Oregon to Hawaii are preparing for PV to represent a significant portion of their energy supply in the not-too-distant future. To successfully integrate a high penetration of this intermittent resource will require utilities to alter the status quo when it comes to business, technical, and regulatory matters, but they are stepping up to the plate to prepare for this challenge.
Historically in the U.S., the relationship between the utility and solar industries has been an adversarial one, but today that is changing. In order for PV to make a significant contribution to the world's -- and the nation's -- CO2 reduction challenge, the actions of homeowners and business owners alone installing rooftop solar won't get us there fast enough. Utilities are the key to wide-scale installation and integration of significant levels of solar electricity on both the small-distributed-rooftop scale and the large-central-station-power-plant scale.
Barry Cinnamon, CEO Akeena Solar
In 1985, according to Doc Brown in Back to the Future, you needed a nuclear reactor to generate 1.21 gigawatts (pronounced "jiggawatts").
So what's changed since then, or since 2001, when I got back into solar?
1. Except for First Solar's success with thin film for large ground mounts, the basic technology hasn't changed. Crystalline panels were working in 1985, and are still working great now. It's an evolution of technology, not a revolution. I expect forms of crystalline panels to continue to dominate the market -- particularly for Distributed Generation.
2. Now that prices for panels have come down and are no longer the biggest cost factor, increased attention is being paid to installation costs. There are enormous improvements that can be made in this area (such as our Westinghouse panels) -- and in the amount of paperwork that is required. It's a hell of a lot easier to save $0.20 per watt on installation/paperwork costs than to reduce panel costs by the same amount.
3. In the words of George Westinghouse, AC is better than DC. To keep the metaphor going, it's Back to the Future, with AC panels becoming the dominant technology for rooftop solar -- for both cost and safety reasons. No more High Voltage!
4. Incentives. I've never met an incentive I didn't like -- as long as it got traction in the market. The Federal ITC and California rebate programs are the two most successful incentives in the U.S. Other states have tried programs, but their lack of consistency has resulted in a damaging series of starts and stops. So far, here in the U.S., we've been too chicken to establish a long term feed-in tariff that will actually works. Germany did it, Ontario is doing it -- but when we try, we set the FIT at a level that is either too low to gain traction (like in California) or we create a program that is hobbled by inadequate funds (e.g., Gainesville, Fla.).
5. Obviously, I'm a fan of branding -- especially when the underlying product is a commodity. Just about anyone can make a cheap, tasty soda, but unless it's called Coke or Pepsi, it's a struggle to get people to buy it.
Ron Kenedi, Vice President
Sharp Solar Energy Solutions Group
Thirty years ago, the solar industry was a pre-niche market -- a gleam in peoples’ eyes.
It was a market borne of absolute necessity, primarily for use in remote areas or for the space program. There were experimenters and folks who were working off-grid who wanted to use the technology. And a few survivalists, as well -- solar was a technology that could help them live remotely.
My first customers in solar were industries that needed solar for remote applications like off-grid living and working. This included ranching and industrial applications such as monitoring and telemetry of oil platforms and gas flows; lighting, call boxes, signage, water pumping, village power and water delivery. Solar was also used in recreation, to help power RVs and boats. And today, many of those original applications are still going strong.
Back then, we didn’t even contemplate the concept of 10 gigawatts. Solar modules were 50 or fewer watts, and arrays were about 2 or 3 modules. Every thing was so much smaller.
Including the paychecks.
I remember when my business passed the $1 million mark.
Interestingly, a lot of those people who were working in the solar business decades ago are still in the solar business. That’s a credit not only to the technology, but to the commitment of the people in this business. The original believers. People who were drawn to solar because of their lifestyle and their system of beliefs.
Everything was a lot smaller at the outset; there were very few people were working in solar, and everyone knew each other. Today, as opposed to the beginning, we have a gigantic industry with growth that’s got no end in sight. We now have a lot of people in the business who want to make their mark in this industry. People who want to see science in action, further their careers -- and make money.
The uses of solar are quickly evolving. We’re seeing tremendous growth in grid applications. Solar is now powering homes and businesses -- and now it’s providing technology for power plants.
Julia Curtis, Director, Business Strategy and Government Relations for Solar at BP
Solar needs to be more than a small but bright glimmer in our energy mix. Milestones are important, and the U.S. is still behind other countries for solar installations: the United States should achieve 10 gigawatts of installed solar by 2015, and given the solar resources and energy needs of the U.S., this is an achievable goal. The U.S. solar market lacks the level of political consistency that is necessary, and with the Treasury Grant Program set to expire at the end of this year, there is a push to meet the start-construction deadline of December 31, 2010. However, extending this deadline is critical to reaching the 10 GW goal, and will help create jobs in this rough economy. It is through one united voice that solar PV can reach this goal, and begin to take on a significant portion of America's growing energy demand. As with all energy sources, government policy and incentives are critical to growing the market. Solar energy clearly provides clean, reliable energy -- so why can't we do a lot more?
Both China and India made headlines with solar projects in 2009, including BP joint venture manufacturing plants to help expand their solar power capacities to 20,000 megawatts by 2020. However, the largest area of job creation in the energy sector is through the installation of distributed generation solar. It will take policies like net metering, interconnection standards, financing programs like PACE and other state and federal clean energy leading programs, and feed-in tariffs to meet this goal. We need bigger goals,and long-term, consistent policies to help hedge against volatile and increasing energy prices, creating more energy independence.
Paul Maycock, PV Energy Systems, solar pioneer with 40 years in the industry
In 1995, I forecast 8 to 10 megawatts in 2010 with an average price of $2.00 per watt. The sad part is that the world market is 90 percent subsidized, especially in Germany. The real milestone will be when we reach installed costs of $2.00 per watt. This will result in "grid parity," where PV with net metering is equal in cost to retail price in many of the markets of the world (though probably not in Germany). I forecast this will happen in 2015, especially by First Solar.
See Part 1 of this series here.
