| The Global Environment |
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The present Climate change and a resistance to rely on conventional methods of energy supply has changed the world energy scenario to focus on the importance of Renewable Energy sources for augmenting power production worldwide. Of these, Solar and wind power are the most important sources. The Solar photovoltaic (PV) industry experienced a healthy growth rate of over 40% in the last 5 years. The production of PV systems increased from about 77 MW in 1995 to about 400 MW (revenue of US$ 2 billion) in 2001 and to 1,195 MW in 2004, 1,700 MW in 2005 and 2,540 MW in 2006 (revenue of US$20 Billion) representing a phenomenal rise of more than 6 fold growth in production and 10 fold in revenue from 2003 to 2007. According to the Photon International magazine of April 2007, in 2006, in spite of the silicon shortage constraint the growth is 40% over 2005 to 2540 MW. According to independent market reports, the global PV market is expected to continue its healthy growth at least till 2050. Now solar production is on the scale of doubling every year through at least for another 10 years. Another prediction says a conservative figure of 35% growth for the next 35 years. The actual growth witnessed during the past four years has been significantly higher than those predicted (43% in 2000, 38% in 2001, 44% in 2002, 33% in 2003, 57% in 2004, 44% in 2006, 40% in 2007). In 2007, the global market for PV systems is around 2540 MW in spite of the silicon shortage. According to Michael Rogol of Photon Consulting reported in SOLAR ANNUAL 2006 sector production will reach at least 10 GW by 2010 (revenue US$ 70 Billion) which is a 6 fold production growth vs. 2005 figure. Our estimation says a 12 GW by 2010 (revenue over US$100 Billion) as silicon supply position will be better. In recent years, the distributed on-grid PV systems are accounted for 70% of the market share. Off-grid applications which were the major usage in the past have been replaced by the on-grid application because of tariff concessions given to users in Europe. Constraint on silicon supply chain will ease out by 2008 as high purity silicon feedstock manufacturers will increase the production from 32,000 tons in 2005 to 85,000 tons in 2010. Our estimation for 2010 is over 110,000 tons. This is because of many new manufacturers are entering. China is going a large expansion on silicon feedstock and India is also planning 10,000 tons of silicon in near future. Increase in Cell efficiency, technology up gradation on manufacturing, decrease of silicon usage (from 12 grams per Watt in 2005 to 7 grams per Watt in 2010) will enable a further increase in production apart from the thirst for Green Energy from the public and Government support. Demand is still growing faster than supply. Today, global demand is approx. 5 GW against the supply of 2.54 GW in 2006. By 2008, demand will expand to 8 to 10 GW against the production of 5 GW. With demand outstripping the supply, the price will remain firm and the revenue will expand to US$ 27 Billion in 2007 and US$ 70 Billion by 2010 as per the report from experts. We expect the revenue would reach above US$ 100 Billion by 2010. At a Module price of $ 2.5 per Watt, Solar is at par or near residential grid price in several market including Japan , Italy and Portugal etc. This huge market of power will be driven by economics alone. Rising grid price, Environmental compliance cost, rising carbon price and Global Warming up situation will improve Solar competitiveness further. Even otherwise today Solar power is economically attractive to end customers in European market because of large subsidies offered on the electricity by way of buyback (buy back rate of US$ 0.50/KWh). Government support is expanding quickly around the world. Zero energy home each having 4KW building integrated solar systems are pre installed in Japan . There are also many customers willing to pay a “Green premium” for Solar. Policy of Government spending is rising by leap and bounce. California is spending around $ 3.2 Billion for next 10 years. Bank of America recently announced $ 20 Billion environmental initiative to supply the growth of eco friendly sustainable activities to address global climate for next 10 years through lending, investing and creating new products and services covering Green economic growth, carbon emission neutrality and green mortgage program in home business. More and more Chinese and Indian companies are entering into the manufacturing of solar products. This will enable the competitiveness of solar verses the conventional energy based on fossil fuel and will drive by economics alone in near future. |