German Solar Industry Association (BSW-Solar) &
European Photovoltaic Industry Association

Photovoltaic (solar electric) power generation is on the verge of becoming a crucial pillar within the energy mix of our society. The photovoltaic (PV) world market is growing by 35% annually and the share of PV in the European electricity mix is increasing steadily; in 2007 in Germany it was approx. 60% higher than in the previous year. In a future sustainable energy mix, all renewable energy sources (RES) will be needed and photovoltaics will play a major role. The German Advisory Council on Global Change foresees the “vigorous utilisation” of solar power as a major tool to meet global energy requirements and stresses that solar energy holds by far the largest sustainable potential.

A sensible alternative

While the prices for fossil fuels are skyrocketing and the public acceptance of these sources of energy is declining – photovoltaic technology has become a truly sensible alternative. A mix of different RES is replacing a growing share of fossil and nuclear power. Solar energy plays a major role since it is globally available, flexible with regard to the system size and because it can fulfil the needs of different countries since it offers on-grid and off-grid solutions.
Since 2004, PV markets are developing quickly in Europe. Spectacular growth rates can be observed in Germany and Spain, as well as in Italy and France – and the prospects for the future are even brighter. Companies are spending large amounts of money in research and development; innovative and promising PV technologies are arising; and an increasing number of countries are investing in PV production capacities.

Solar will eventually provide for the largest share of energy in the global energy mix Source: German Advisory Council on Global Change (2003)

Through mass production and economies of scale, the costs of PV technology are decreasing massively, which renders PV not only an ecological but also an economic alternative. The price of PV modules has been reduced by more than 60% since the beginning of the 1990s, making the use of solar electricity already cost competitive in some regions of the world. Within the next few years, grid parity (the point in time when solar electricity is cheaper than retail power rates) is expected to be reached in many countries in Europe.

An essential part of our climate protection strategy

A recent study of the PV Environmental Research Centre (Brookhaven National Laboratory in Upton, New York) has shown that solar power today already avoids 90% of greenhouse gas emissions compared to those emissions of fossil and nuclear sources of electricity generation. In the case of PV, greenhouse gases are only emitted during the production processes of PV systems; if renewable energies are used for these processes, CO2 emissions are zero.

PV must therefore be considered an essential part within our global climate protection strategy. Although its share of today’s electricity production is not yet extensive, PV is needed for its long-term potential. While other means of mitigating climate change may provide for short-term solutions, these efforts will not be sufficient. Solar is the RES technology with the vastest potential and we cannot afford to leave this potential untapped. However, in order to utilise PV’s opportunities, strategies need to be developed.

A long-term strategy needed from governments

When replacing fossil fuels, swift action is needed as climate change doesn’t allow for hesitation. Capacities and expertise must be developed for the planning, production, distribution, installation, and maintenance of PV systems. These processes need time to become established – governments must actively support and initiate the PV market development, since successful strategies need a combination of support programmes, reduction of legal and other obstacles, public awareness campaigns, training of experts and most importantly, a clear goal for the solar policy. The most crucial steps in setting up a PV long-term strategy are:

• To provide a legal framework for the installation of grid-connected PV systems and the production of solar electricity (including the removal of bureaucratic barriers),

• To establish a financing scheme, which makes it financially attractive to invest in PV and produce solar electricity, and

• To guarantee these framework conditions over a long-term period in order to gain the confidence of investors and industry and to avoid stop-and-go markets.

The most effective policy tool for advancing PV in Europe has proven to be a guaranteed feed-in tariff, which has been implemented in over 40 countries, states and provinces around the world so far. The European Photovoltaic Industry Association (EPIA) and the German Solar Industry Association (BSW) are strongly positioned with a wealth of experience in developing solar markets and capacity building. We are happy to share this experience with you.

W: www.bsw-solar.de

W: www.epia.org