Talking point: Solar PV under discussion: PV-SEC Milan, Solar Power, SEMICON Europa

Three recent solar events showed a purposeful, innovative industry that is transforming the production of electric power. But it needs the right policy decisions to be made now if it is to grow as it could. Jackie Jones reports.

The solar PV industry took advantage of the last of the summer sunshine with several key events squeezed into September and the first days of October. In Europe, photovoltaics-only PV-SEC took place in Milan, Italy, featuring a large and stylish tradeshow plus an extensive programme of scientific presentations as well as policy and industry sessions. The semiconductor event SemiCon Europa hosted a large PV manufacturing tradeshow and small conference in Stuttgart, Germany. In the United States, the solar industry – largely, but not exclusively PV – massed in Long Beach, California, for SolarPower, hosted by SEPA and SEIA. This was an upbeat event that attracted around 10,000 participants onto a lively exhibit floor that promises to be at least three times larger next year.

While the events were different in mood and scope, the same themes came up on both sides of the Atlantic: how to achieve grid parity on cost (where not already achieved); up-scaling of manufacture – particularly for thin-film; and the key, essential, role that policy plays and the necessity of getting it right within the coming weeks and months. Underlying all was the ongoing theme of the urgency of curbing carbon emissions.

If you aren’t scared, you don’t understand

At SemiCon Europa, SEMI reported that 200 or so of its members are now involved in PV manufacturing technologies, and another 300 are considering entering the market. These companies often have decades of experience in semiconductor manufacturing, and, in many cases, plenty of funds to invest in a fast-growing new sector. They have expertise and good practice to offer, but are also in need a new ‘playground’ to continue expansion – PV offers them a perfect space alongside the existing players.

Addressing the conference audience, one speaker said his company expected the PV market to be in the 5 GW range ‘within five years.’ Another said his company was now in PV but ‘we wish we had got into solar a couple of years earlier!’ A speaker from Flextronics cited his CEO on the subject of growth in the solar sector saying: ‘if you aren’t scared, you don’t understand.’

Among the many developments presented, two large-scale developments in thin-film manufacturing stand out – both Oerlikon and Applied Materials are companies with track records outside PV, but which now have substantial solar businesses and were present at all three events.

Jeannine Sargent, CEO of Oerlikon Solar, says her company’s vision is for ‘solar power, everywhere.’ Oerlikon has been working for several years in developing turnkey solutions for PV manufacturers, and is now convinced that the company’s micromorph tandem cell production expertise, announced at PV-SEC in Milan and also presented at both other events, is the next milestone to achieving grid parity. While gigawatt-scale manufacturing is not yet reality, Oerlikon says that over the next two years the industry will start to see gigawatt-scale plans announced, for implementation in the next two to four years. First will be 60 MW–80 MW plants, then early adopters will take it to 120 MW in 2009 or so, says Sargent.

The PV hall at SemiCon Europa

Also thinking big is Applied Materials, a company with a 40-year history and which entered the LCD market in the early 1990s. Now with revenues of US$9 billion, 14,000 employees, and 3000 field engineers, Applied Materials is also stepping boldly into PV – thin film but also standardized manufacturing for crystalline silicon. With PV industry heavyweights Winfried Hoffmann and Charles Gaye on board, Applied first announced its new SunFab product in Milan. SunFab is an entire, end-to-end production line that will take a 5.7 m2 piece of glass and process it into a 5.7 m2 solar panel. As with LCDs, this can be cut into half or quarter sizes, to best suit the market. ‘This is the first time that the customer has been able to purchase an entire production line that is able to make panels of different sizes’ says Applied Materials. By mid-October, seven contracts had been announced around the world including deals with T Solar, Signet, Schuco-E.On, Moser Baer, Sunfilm GreenEnergies and SolarMorph. Though it was expected that the 5.7 m2 panel would be most appropriate for BIPV applications, its size is also appealing to the ground-mounted, utility-scale applications, reports Applied Materials.

How boldly do you go?

The solar PV industry is confident that it can deliver on a much larger scale, and that costs will decrease. At the EPIA Industry Day that took place during PV-SEC in Milan, the question of just how bullish to be on both these subjects was, once again, a hot topic. EPIA Chair Winfried Hoffmann (Applied Materials) agreed that production volumes of 15 GW by 2010 may well be achievable, but warned that if by 2009 only 5 GW had been achieved it could have a very negative impact on finance and investment, so caution is needed. Photon International Editor Michael Schmela explained that his Photon Consultancy colleagues are very bullish on production volumes – 20 GW by 2011 – but expect that high demand for PV will prevent a dramatic reduction in system prices, keeping profit margins high. Other speakers pointed out that high demand and new markets shouldn’t be taken for granted. They do not occur automatically, and even with the right conditions they take time to develop. Analyst Paula Mints of Navigant recommends caution – the reality is that solar PV markets do depend on incentives, and getting incentives right needs very smart policy.

Setting incentives at just the right level to maximize uptake is critical to their success and in established markets, in which support can gradually be decreased, it’s important to find a level that will ensure no market momentum is lost. In Germany – still the most important market, though being chased hard by Spain – the government has a long-term commitment to solar, but is considering reducing feed-in tariffs with a so-called ‘digression rate.’ Industry is also being asked to predict reductions in prices and some PV companies say they can match a 7%–8% digression rate.

Experts at the conference had some concerns. According to Paula Mints, ‘If incentives decrease too rapidly, then growth will decrease as well.’ And Hoffmann further warned the industry against rushing to commit to a price reduction of 8% or 10% in the future. ‘It is important to remember dependency on materials such as aluminium, the price of which is beyond the control of the industry, and installation. The overall installed price is what matters,’ he said.

In Milan, eyes were on the growing Italian market, described by Giovanni Silvestrini of the Energy Ministry as ‘booming,’ with over 200 MW being installed this year, four times what Italy has installed in past 20 years. ‘Programme Energy 2015’ was launched in May. This follows on from a previous solar roof programme and feed-in law introduced in 2005 that favoured large installations. The new legislation requires all new buildings to have PV and they will also qualify for a feed-in tariff. Most installations for the next few years in Italy will be on buildings – ‘We are trying to create a solar industry in Italy,’ says Silvestrini. Several manufacturers exhibiting in Milan announced plans for expansion or sales operations in Italy. Q-Cells, for instance, introduced several of its new Italian industry partners.

Shaping the future

Looking beyond national markets in Europe, EREC’s Oliver Schaefer was also keen to point out in Milan the importance for the PV sector of the new European Framework Directive currently under consideration in Brussels. This will outline just how the 2020 targets – that renewables should make up 20% of Europe’s primary energy requirement by then – will be allocated to different countries, and what support mechanisms will exist. Member of the European Parliament Mechtild Rothe told the opening session: ‘The new Framework Directive will shape Europe’s energy future… the right decisions have to be made now for the necessary energy switch. A challenging time is ahead of us. Let’s make this century the solar century.’

In California, SEPA’s Julia Hamm (née Judd) and SEIA’s Rhone Resch were encouraging everyone to push their representatives in Washington to vote for the Energy Bill, which someone at the event said would ‘turbocharge’ the US solar industry. Resch said the Energy Bill currently under discussion is the ‘best ever proposed for solar energy.’ He went on: ‘Solar is going to become a political force and dictate outcomes in Washington. It’s our time.’

Jackie Jones is Chief Editor of Renewable Energy World

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