Intersolar EU: Updating solar trends across Europe

With demand flat, technology prices decreasing and inventory rising, the PV industry was in the mood for positive news, or at least some visibility — and it got a bit of both at Intersolar Europe, writes Paula Mints.

by Paula Mints, Navigant Consulting

June 20, 2011 – Intersolar Munich, the original gargantuan solar trade show, dominated the week of June 8-10 with 15 indoor halls and an outdoor exhibition area. >2200 companies occupying >5000 booths, and ~75,000 visitors crowding the aisles. As usual, attendees rushing from meeting to meeting needed to watch their time carefully, as traveling from Hall A1 to Hall C3 could take 30 minutes — traveled at a dead run while gripping a briefcase and cellphone.

The Intersolar Conference offered a full program to attendees, though, as typical with conferences these days; there were many changes in the speaker lineup. With demand flat, technology prices decreasing, and inventory rising, the PV industry was in the mood for positive news, or at least some visibility — and it got a bit of both.

For Germany, the 9% base degression will remain in effect; biannual degressions based on demand will likely not control the market significantly, given the dearth of available multi-gigawatt markets elsewhere. There will be no tariff for open space installations in national parks and protected areas. Direct consumption tariffs (of significant interest as a method of incentivizing distributed generation going forward) for systems ?100kWp, where the electricity is used entirely for the consumption of the user, will receive a tariff of 16.38 ?cents/kWh. A disturbing push for remote reduction of electricity accepted to the grid is threatening to become a trend, with governments perhaps choosing to control costs by this means.

According to the Australian PV Association, the market in that country may well have topped 350MWp in 2010, driven by the country’s FiT. However, word from system integrators in that country is that the FiT level is too low, and the program uninviting.

Despite an optimistic presentation from CanSEIA along with an aggressive forecast, the fact remains that a conservative win in the October elections would spell the end of the Ontario FiT program. Further content requirements (60%) along with inadequate transmission have held back growth in 2011. Domestic content in PV is particularly difficult to police, and the domestic market needs to be significantly larger in invite technology manufacturing to locate in Ontario. Module assembly, on the other hand, would create local jobs and ensure that the modules were assembled locally.

In Turkey, a 13.3 ¢/kWh for 10 years from start of operation explains the slow domestic PV market. Greece’s generous tariff, meanwhile, is offset by that country’s significant debt and drawn into question by the upcoming austerity measures. Greece’s national renewable energy plan has a goal of 2.2GWp of installed PV by 2020.

Anxious industry observers waiting for optimistic news of the market in Italy received good/not-so-good news. The IV Conto Energia has a goal of approximately 23GWp by 2016 (with some trepidation over the use of approximately to describe this goal). The incentive has a budget of between ?6-7 billion/year, with a revision expected with the budget is reached. Systems using 60% PV content made in the EU will receive a 10% bonus, and ground-mounted systems on agricultural lands are limited to 1MWp in size. Large systems are capped at 10MWp for rooftop and 200kWp for ground-mounted systems. Adding complexity (never a good thing in the world of incentives), large systems can access the FiT on these conditions: the plant must subscribe to the electronic registry and the registration cannot be traded. The latter requirement is obviously to reduce the speculation that has dogged the country’s FiT. Installations must have a certification of completion within seven months after the go-ahead is given, while plants >1MWp have nine months. Grid operators verify completion and the tariff is awarded when the plant is connected to the grid. Rewards for self-consumption continues as a trend, with these systems receiving a premium.

Farooq Abdullah, the Honorable Minister for New and Renewable Energy (MNRE) commandeered the podium to address the market in India, with enthusiasm about India’s solar mission and a commitment to encouraging the growth of the solar industry and market in that country. He made it clear that the off-grid and on-grid applications are important to India’s future, and that CSP and PV are equally important to the country’s future goals. The Minister was pleased to announced that 300MWp of PV contracts have been awarded, and that a further 300MWp will soon be announced. He reiterated that with peak power deficits of 10% to 12%, solar is crucial to the country’s growth (deficit of 10-12GWp a year).

Lighting for rural houses (an off-grid application), reduction of polluting and expensive diesel, and promotion of CSP for energy management are considered critical areas. Though India is committed to grid-connected solar, it is equally committed to off-grid applications of the technology, the minister said. Goals are 200MWp off-grid solar by 2013 and 2GWp off-grid solar by 2022, with 2GWp grid-connected solar by 2013 and 22GWp by 2020. (Concerning these aggressive goals, it is important to remember that a goal is not an installed system, and that many a goal has been derailed by cost overruns, collapsed budgets, debt, and inadequate incentives.)

To encourage manufacturers to locate in India, the government favors incentives over punitive measures, and companies that establish manufacturing in India will receive domestic content perks. The government is particularly interested in encouraging thin-film technology manufacturers to locate in the country.

Abdullah reminded the audience that Germany and India have a close relationship, saying, “we either live together or we perish, but perish we will if we do not help each other make the switch to RE.” He understands the challenges ahead for India — price, awareness, supply affordability, weak implementation of policy and financing — but reiterated that the country has a long-term commitment to creating a strong solar market and industry. Currently, planned installations are in areas with no utility grid, so building the necessary infrastructure will happen in conjunction with installing solar.

India has a PPA-style FiT, and the minister proudly announced bids of 11-12 rupees. During the question/answer period, questions from the audience were primarily about the low PPA levels and the viability of the projects at this level, along with the difficultly for India-based companies to compete. The minister supported the bidding process, by stating that bidding cuts down on corruption and favoritism.

In a session on the inverter market, the problem of double ordering in 2010 and current high inventory levels was noted. Micro-inverters currently hold <1% of the total market for inverters with the fasting growing segment small 3-phase units.


Paula Mints is principal analyst, PV Services Program, and director in the energy practice at Navigant Consulting. E-mail: pmints@navigantconsulting.com.

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