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Posted on 07 August 2019

Moving to a New Direction

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The Photovoltaic market suffers in Europe but fares better in the MENA region

What will the future bring for the solar industry? Definitely severe changes. Photovoltaic will be an important pillar of our future energy supply, but on the way to this, the industry has to face lots of challenges, especially in Europe. The trade show Intersolar Europe 2013 reflected the turbulences of the industry with fewer exhibitors and a smaller exhibition area.

By Marisa Robles Consée, Corresponding Editor; Bodo’s Power Systems

Fairly unusually this summer, the sun shone on the 22nd edition of the Intersolar trade show that took place in Munich from 19th to 21st of June, 2013. With about 35 °C this was one of the hottest shows ever held. However, the bright sun could not hide the fact that the industry is suffering, especially in Europe. Some 50,000 visitors from more than 150 countries flocked to Intersolar Europe 2013 at Messe München. A total of 1,330 exhibitors (2012: 1.870) from 47 different nations (2012: 48) presented technologies and services in the fields of photovoltaics, PV production technologies, energy storage systems and solar thermal technologies in 12 exhibition halls and an outdoor exhibition area, together 121,000 m² (2012: 171.600 m²) of exhibition space. This year, 53% of Intersolar Europe’s exhibitors came from abroad. With 608 exhibitors present (2012: 870), Germany was the best represented country, followed by China with 242 (2012: 385), Italy with 59 (2012: 78), Austria with 40 (2012: 46) and Spain with 29 (2012: 45) companies. In terms of visitors, 44% made the journey to Munich from outside Germany, beating last year’s figure.

In 2013, Intersolar Europe had a dedicated exhibition segment for energy storage systems in hall B5, which attracted a lot of visitors. A total of more than 200 exhibitors had registered for the area of energy storage systems, making Intersolar Europe the largest platform for the combination of photovoltaics and energy storage systems worldwide. The role of storage systems for on-site consumption and for the grid integration of solar power was one of the exhibition’s, and the conference’s core topics. This year, some 400 speakers and 2,000 attendees from all over the world participated in the Intersolar Europe Conference and Side Events.

Finding new markets

On the way to find new markets, the industry is moving to a new direction. Although the economic crisis and some excessive cuts in funding have currently brought about a downward trend in the European solar market, and many manufacturers of solar cells and modules in particular are facing great challenges due to tough competition, demand is up in Asia and America. Some examples: In 2013, experts are forecasting growth of around 30% relative to the previous year for newly installed photovoltaic capacity in the USA, and over 50% for China, while in Japan the photovoltaic market is expected to at least triple compared to 2012. The solar industry expects the newly installed annual solar power capacity to increase from 31 GWp in the year 2012 to around 50 GWp by 2015. This would mean more than a doubling of the installed photovoltaic capacity around the world within three years, to over 200GWp. In Germany, solar power already covers 5% of the electricity demand. The solar industry has set the target of increasing that share in Germany to at least 10% by 2020 and at least 20% by 2030.

"More and more countries are recognizing the fact that there is no alternative to a rapid expansion of solar power, and that this is significantly less expensive than holding onto fossil and nuclear energy sources. All around the world, the skyrocketing costs of climate change and the costs of importi../moving-to-a-new-direction/ng fossil fuels are driving this realization home_rdquo.css;, explains Carsten Körnig, Managing Director of BSWSolar, the German Solar Industry Association. The export quota of German companies grew from 50% in the year 2010 to 60% in the year 2012, and the industry association expects that it will continue to grow within the next years.

Revenue forecast is for PV systems installed with energy storage only. Source: IHS/Solar Promotion

Despite struggling companies: Germany is still strong…

One in ten people in Germany already produce solar power, and more and more people are taking the “Energiewende”, Germany’s energy turnaround, into their own hands. Today, already 8.5 million people live in buildings that use their own solar power systems to generate electricity or heat. The active use of solar power provides greater independence from rising energy prices and additionally prevents large amounts of carbon dioxide from being released into the environment. In the year 2013 alone, solar power systems installed in Germany will achieve savings of around 24 million metric tons of carbon dioxide emissions.

In the past two years, solar power has played the leading role among all other technologies in the German Energiewende. The past five years have seen a virtual doubling of the number of people in Germany who live in buildings supplied with heat or electricity from solar power. "People support the Energiewende, and they are increasingly taking it into their own hands. It’s now up to the politicians to resolutely move the Energiewende forward and to utilize the significant readiness of citizens and entrepreneurs to invest in the transformation of the energy supply system," explains Carsten Körnig. Focussing on Germany, Carsten Körnig is convinced that a “strong domestic market is indispensable for a successful solar industry. Following federal elections, political stakeholders must therefore ensure that renewable energy sources form the core of the energy supply system, that their rapid expansion is once again given priority, and that citizens and the industry have solid investment security."

…but MENA is getting stronger (soon)

The solar industry in the Middle East and North Africa (MENA) is geared up for growth: By 2015, the regional market for photovoltaic and solar thermal power plants is expected to grow to a total output of 3.5 GW. Saudi Arabia in particular is planning to move away from generating electricity using crude oil in favour of photovoltaic and solar thermal technologies. A study conducted by GTM Research, Boston, USA, puts this development down to high solar irradiation, rising electricity prices and requirements that arise from an increasing population size. By 2017, the expansion of solar energy is expected to exceed a combined output of 10GW in the MENA region. With a share of 70%, the majority is set to be implemented in Saudi Arabia and Turkey.

The sun also ranks among the most valuable resources in North African countries. Egypt benefitted from crude oil exports in the 1990s; however, current reductions in yields produced by oil fields and increasing energy subsidies are forcing the Egyptian government to take action. In the financial year 2012/2013, subsidies reportedly account for a quarter of the entire Egyptian state budget. As the largest energy resource in the country, the sun offers an ideal alternative to dwindling oil and gas. Every year, each square meter in Egypt receives more than 2,200kWh of solar energy. The Egyptian Solar Energy Development Association (SEDA) in Cairo sees potential application areas for solar energy in the form of solar installations for producing drinking water and intelligent lighting concepts for hotels. In Morocco, solar plants with a combined output of 2GW are set to be installed by 2020, which means that the share of renewable energy in the Moroccan power grid could reach a total of 42%. Alongside solar energy, wind energy and hydropower are also expected to form part of this share. Under the supervision of MASEN (Moroccan Agency for Solar Energy), the construction of a large, impressive project has already begun in the Moroccan province of Ouarzazate, which will be the world’s largest solar thermal power plant. A capacity of 160MW will be installed in the initial expansion phase alone. Once completed, the power plant will reach an output of 500MW.

For the first time Intersolar 2013 had a dedicated exhibition segment in hall B5 for energy storage systems, which attracted a lot of visitors

Giants war

Solon, Q-Cells and now Conergy are insolvent, big companies like Bosch or Siemens are closing their solar divisions. Last year Germany installed more than 7,600MW photovoltaic output. This year this will shrink to about 5,000MW of new installations. Germany will remain as a big solar market with high potential growth, states VDMA, the German Engineering Federation. But the turnover of manufacturers of photovoltaic components, equipment and plants in Germany has decreased by almost 50% in 2012 compared to the previous year reports VDMA. This means that times of rapid increase in photovoltaic production capacities are definitely over. Already since the end of 2011, the PV equipment industry has suffered from large over capacities. This development continuously got worse in the course of 2012.

"In addition to market turbulences we have to cope with continuing trade conflicts in the solar sector. We clearly feel the uncertainty which this development means for our clients. The willingness to invest in newest machinery and production technology in order to thus maintain their own competitiveness has considerably decreased", explains Dr. Peter Fath, CEO of RCT Solutions and Chairman of the Board of VDMA Photovoltaic Equipment.

The benchmark with their international market partners, however, remains positive. With a share of 55% of the world market, German companies could consequently expand their competitive position in 2012. "German PV manufacturers and technology suppliers continue to benefit from being innovative, solution oriented and close to their customers. When it comes to competitive capacities as well as to replacement and upgrade of existing production capacities, top performers choose "Made in Germany" relying on competitive cost structures and top quality", stresses Dr. Florian Wessendorf, Managing Director of VDMA Photovoltaic Equipment.

That may be the reason why the PV-machinery industry is strongly against anti-dumping measures. The European Commission has decided to impose punitive tariffs of almost 12% on imported Chinese solar modules and their core components (i. e. wafer and solar cells). In the first instance these protective duties will be valid for two months. During that time negotiations with China are intended in order to find a solution. If that does not lead to satisfying results, then import tariffs of 47.2% will come into effect in August 2013. This has been passed although several member states, especially Germany and Great Britain, have expressed serious concerns.

The manufacturers of components, machines and equipment of PV in Germany strongly disapprove of these measures and fear an escalation of the current trade conflicts. "We want to avoid a useless trade conflict with one of the most important target markets of the machinery industry and we have been supporting a more diplomatic solution in Brussels until the very last minute", says Dr. Hannes Hesse, Executive Director of VDMA.

However, this is one of the most important decisions in the history of the solar industry. Some say it will bring salvation, others fear it will decimate the European solar market. Ironically, EU tariffs may help some segments of China’s PV industry even in the short run. But without cheap Chinese modules, European developers and installers will be forced to look for new ways to cutting costs, and some may turn to Chinese inverter makers – which have struggled in the EU, and would not be covered by the tariffs – as part of the solution.

China will not stand by idly and watch while the Europeans are planning to impose anti-dumping duties on importe../moving-to-a-new-direction/d PV cells_ wafers and modules. The _ldquo.css;Middle Kingdom” is also investigating countermeasures against polysilicon imports from the EU, US and South Korea. China filed a complaint to the World Trade Organization charging the European Union with violating rules governing subsidies to its solarcomponents industry, in the latest move in a global spat over the solar industry. China is complaining that power generated in Europe using solar-energy components made in the EU receives a subsidy.

 

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