Gitika Chanchlani, GlobalData
February 01, 2012 | 3 Comments
Concentrated photovoltaics (CPV) is an upcoming renewable market that promises to provide cost-effective power generation at high levels of efficiency. The performance of a CPV system is dependant on the direct normal irradiance (DNI). Because of this major performance parameter, the number of regions ideal for CPV system installations is limited. According to Prof. Humayun Mughal, the potential market destinations based on DNI for the CPV technology are Southwest US, Mexico, Chile, Southern Peru, Southwest Bolivia, Northwest Argentina, and Mediterranean countries, Australia, North Africa, Middle East, Western India and Western China.
The cumulative installed capacity for CPV systems was around 23 MW in 2010. As the technology is still developing, most of the CPV projects are in the pilot or prototype stage. Guascor Foton’s Navarre power plant and Murcia power plant are the largest CPV plants with installed capacities of 7.8 MW and 2 MW, respectively. Because of the partial installation of the Navarre CPV power plant, the annual installed capacity in 2008 was 8 MW. In 2009, annual additions were reduced to 2 MW as investments were reduced during the economic downturn. However, with the economic recovery, investments gradually increased, which resulted in an annual addition of 7 MW in 2010. In the U.S., the major companies that have emerged are SolFocus, Amonix, EMCORE, and Skyline Solar. European companies such as Concentrix, Abengoa Solar and ArimaEco have also started progressing in the CPV market. In 2010, the cumulative installed capacity increased at a year-on-year (Y-o-Y) growth rate of 44 percent.
The percentage of high concentration PV (HCPV) cumulative installed capacity in 2010 was 94 percent, with around 21.8 MW of installations. However, the low concentration PV (LCPV) and medium concentration PV (MCPV) accounted for 6 percent of the total share with around 1.3 MW of cumulative installed capacity. As HCPV system is a much more developed technology than LCPV and is being installed on a larger scale, HCPV market players dominate the market. According to a research report issued by the CPV Consortium the cumulative installed base for HCPV in 2009 was around 14 MW.
Spain dominates the global CPV market
In 2010, Spain dominated the global CPV market. With around 16 MW of cumulative installed capacity, the country accounts for 70 percent of the global CPV installed base. Most parts of the country experience high DNI, which attracts the CPV installers to make investments in Spain. The US follows Spain with a cumulative installed capacity of around 4.5 MW; thereby accounting for 20 percent of the global CPV installed capacity. Greece and Australia have also attracted the CPV system installers because of the high DNI concentration. These countries account for approximately 5 percent and 3 percent of the global CPV cumulative installed capacity, respectively.
High growth rate in the future
The CPV market is expected to experience drastic levels of growth in the next three years. Companies that are successful in operating CPV prototype systems in the pilot locations are progressing towards multi-megawatt CPV projects. With the increased understanding of CPV in terms of technology and investment, most of the players have plans for large-scale CPV projects. Furthermore, countries such as, Italy, China, Australia, India, and South Korea are emerging as markets in the CPV industry. Italy’s CPV feed-in-tariff (FIT) program and China’s low-cost production and high DNI in Western regions are attracting CPV investors to these countries. Solfocus has planned a 10-MW power plant in Xichnag, China. Guascor Foton and Ya-Fei Green Energy have jointly planned to develop a 60-MW CPV plant in Taiwan. Against this backdrop of high investment plans for large-scale plants and supportive government plans, the cumulative installed capacity of CPV is expected to reach around 3.7 GW by 2015 at a compounded annual growth rate (CAGR) of 176 percent.
|Figure 1. Concentrated photovoltaic, global, installed capacity, MW, 2006-2010. SOURCE: GlobalData, primary research|
The market will be more developed by 2015 and so the CAGR is expected to reduce over the next five years. The target CPV markets globally are very specific to regions of high DNI and so land availability is expected be one of the market restraints during the period. Spain is expected to experience a downturn because of a lack of investment support from the government and the expiration of its solar PV FIT program in 2013. In 2015–2020, the CPV market is expected to grow at a CAGR of 28 percent reaching 12.5 GW of cumulative installed capacity by 2020.
Global CPV market, investment analysis
During 2006-2010, more than $11.6 billion in deals were completed in the global CPV market. As CPV is still an emerging technology, there were around 46 private equity and venture financing deals during the period. Major private equity deals included the acquisition of Sovello AG by Ventizz Capital Fund IV, L.P., Lazard Freres investment in Amonix, Haywood Dorland Energy Capital investment in SolFocus, and the acquisition of a 12.73 percent stake of Guascor by Diana Capital and Fond ICO. There were also around 40 venture financing deals in the global CPV market during 2006-2010.
|Figure 2. Concentrated solar PV market, global, investment analysis. SOURCE: GlobalData, primary research|
Venture financing increased from $81 million in 2006 to $226.7 million in 2007 because of the two major venture financing deals of $101 million by HelioVolt Corporation and $63.6 million by SolFocus Europe. Furthermore, in 2008 the venture financing deal value increased to $333.1 million. The two major venture financing deals in 2008 were $130 million by eSolar and $57 million by Infinia. Venture financing in 2009 decreased to $116.2 million as a result of the impact of the economic downturn as companies looked towards less risky ventures. The major venture financing deal in 2009 was $77.6 million by SolFocus. However, with the gradual recovery of global economic conditions, the venture financing investments increased in 2010 thereby reaching $189.2 million. The major deal in 2010 was $129.4 million by Amonix. Against this backdrop, around $946.2 million worth of venture financing deals have been completed during 2006-2010.
CPV is an emerging solar market with many investment opportunities across the value chain. With the planned large-scale CPV global installations, the market will create an increase in demand for CPV systems and their respective components, such as trackers, inverters, multijunction cells, Si-cells, and optics. The companies that manufacture these components are planning investments to increase their respective production capacities and thus diversify into upcoming CPV market regions such as Italy, China, Australia, and India. The governments of these countries have initiated investment support programs for the CPV marker players in the form of FIT schemes, loan guarantees, grants, and funding through their respective solar initiative programs.
However, as the technology is still developing, and there have been many unsuccessful CPV installations thus far, technological viability and project viability are the major risks for emerging CPV companies. As a result of the restricted access to financing through financial institutions because of a lack of government support when compared to other solar PV technologies, interest rates for CPV project financing are high. The requirements of direct sunlight and high DNI for CPV systems are the major restraints for CPV players. Also, with standard PV prices approaching grid parity, the PV market increases the competitive pressure on the CPV players. Furthermore, the planned large-scale CPV installations are expected to signicantly drive the market demand of CPV equipments such as, trackers, inverters, optics and multijunction cells, thereby making it a lucrative investment option for the PV investors across the globe.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that GlobalData delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such GlobalData can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.
Gitika Chanchlani received her BSc in mathematics from Isabella Thoburn College, and an MBA (oil and gas) from the U. of Petroleum and Energy Studies, and is an analyst in alternative energy at GlobalData, E-Park, Plot No.1, 11th Floor, Jubille Gardens, Kondapur, Cyberabad, Hyderabad-500081, Andhra Pradesh, India; ph: 91 40 6616 6781; email firstname.lastname@example.org
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