Solar Electricity: Status and prospects

Ole Grimsrud

June 14th, 2013

Sustainable • No fuel, no emissions• No moving parts, no noise• Low to no maintenance

Modular• Standardized components• Short installation time• Easy to expand with

demand

PV produces electricity directly from sunlight

Contents

PV Status: Rapid growth; dramatic price (& cost) reductions

PV Prospects: Still huge cost reduction potential

Conclusion: PV emerging as important electricity source

… industrial scale operations

…PV leap-frogging other technologies, still with vast scope for improvements

… demand increasingly based on commercial fundamentals

… transformational scale and scope in generation, and as an investment area

… to

Small scale, using IT industry residuals …

Continuous discussions on winning technology…

Dependency on subsidies…

Being seen as marginal by mainstream power

PV module monthly spot market prices (USD/Wp)

6/13/136/13/136/13/136/13/136/13/136/13/13

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From …

Solar PV is transitioning from a niche technology to a mainstream source of power

Attractive regulations & cost reductions → strong PV growth; expected to continue

Sources: Solarbuzz; EPIA; GTM; iSuppli; Scatec Solar; McKinsey demand model

2000

0.2

35-50% p.a.1

+48% p.a.

201514131211

25.4

10

17.5+72% p.a.

7.5

08

5.6

07

2.9

06

1.8

05

1.5

04

1.1

03

0.6

02

0.4

01

0.4

09

Annual capacity additions; GWp

Rest of World

Japan

US

Italy

Spain

Germany

0

5

10

15

20

25

30

35

40

45

50

35 – 60 GW1

Historic learning rate of ~20% for PV modules

Doubling of cumulative PV production

~20 % module price reduction

PV becoming less dependent on subsidies

Contents

PV Status: Rapid growth; dramatic price (& cost) reductions

PV Prospects: Still huge cost reduction potential

Conclusion: PV emerging as important electricity source

Source: McKinsey & Co, April 2012

McKinsey, April 2012:«The cost of a commercial-scale rooftop system could be reduced by 40% by 2015, and by another 30% by 2020 – to $1.20/Wp»

Incremental improvements → further substantial cost reductions

Quantum leap potential in today’s PV technology

Ingot/wafer Polysilicon Cells Modules

• Wafer ~1/2 of PV module cost• ~1/2 of material wasted as kerf loss• Wafers could be significantly

thinner

• Kerf-free wafering• Direct wafer crystallization• Epitaxial growth

• Multi → Mono → Super-mono• More sophisticated cell design;

multi-junction Si-based devices• Improved optical properties

• η only ~15-20%• Systems cost increasingly area-

dependent → greater impact of higher η

ISSU

ESA

PPR

OA

CH

ES

Contents

PV Status: Rapid growth; dramatic price (& cost) reductions

PV Prospects: Still huge cost reduction potential

Conclusion: PV emerging as important electricity source

PV: ~ 40% of new power capacity in EU in 2012

Sources: EWEA (European Wind Energy Association); EPIA (EU Photovoltaic Industry Association)

Notes:

1. Capacity ≠ kWh• Wind power: Average yearly load ~

2,000 hours• Solar power: EU yearly load ~ 1,200

hours

2. In some countries, PV is already significant• In Germany, 4.6% of all electricity

production in 2012 came from PV (3.2% in 2011)

2012 share of new power capacity installation in EU

Germany: Significant PV; grid parity reached ~now

Sources: eex; Macquire

Bloomberg: 70% of global power generation capacity added 2012 – 2030 is expected to be renewable

The news right now is dominated by stories of pain caused by overcapacity on the supply side of clean energy, and the lure of cheap shale gas. But this is playing out against the falling costs of renewable energy and of all the technologies required to integrate it into our energy system, and falling costs win.

PV is finally (or already?) a viable source of electricity!

“The perception of renewables as an expensive source of electricity is largely obsolete, given the huge cost reductions achieved in recent years”“Rooftop solar PV is already better than average residential prices in Australia, Germany, Spain, Portugal, and the South-West US and is not far away in other countries”

Citigroup, March 2013

“Key markets such as India, China and the US are experiencing strong demand and solar projects are now being developed with minimal or no incentives.”

Deutsche Bank, February 2013

““Solar has turned from a heavily-subsidised marginal technology into a mainstream source of power generation.” ”Purely based on economics, we believe almost every family home and every commercial rooftop in Germany, Italy and Spain should be equipped with a solar system by the end of this decade.”

UBS, “The unsubsidized solar revolution”, Jan. 2013

Kalkbult, South Africa: 75MW under construction

Key figures ~315 000 modules, approx 156 km of Substructures, 84 Inverters

Project Owners 39% Scatec Solar AS (Norway); 21% Norfund (Norway); 40% S-A

Duration Construction 12 months