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| Country
Comparisons |
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The most significant country markets for solar PV are Japan,
the USA and Germany. In recent years, the major national
market incentive programs have further boosted installations
in both Japan and Germany. One result is that Germany has
now overtaken the USA. Most of the Japanese and German sales
have been to grid-tied applications, mainly for residential
roof mounted systems and building integrated PV. US demand
has a higher proportion of rural off-grid demand than these
other two markets. The following graphs show data for the
IEA reporting countries.
On
a Watts per Capita basis (graph below), Japan overtook
Switzerland in 2000 with the most PV installed per person.
Germany is poised to overtake Switzerland in 2002. Australia
and other European countries demonstrate high levels of
use of solar PV systems. The strong position of Switzerland
arises mainly from the application by utilities of innovative
"solar energy exchanges" to provide a market mechanism
matching the aggregated demand of customers willing to
pay premium prices for solar electricity with solar power
generators on long term supply contracts.
Source:
IEA PVPS
This
data is brought up to date in our most recent Annual World
PV Market report, Marketbuzz
2006.
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| Driving
Forces of Growth in Country Markets |
Amongst the industrialized countries, the Japanese
and German Governments have led the way in legislating for
the use of high subsidies to stimulate development of their
domestic solar markets. This has caused evolution of
the industry structure in each country and led to strong distributor
and dealer networks with well-trained installers and good
customer support capabilities. Underlying government
policy has been the desire both to reduce CO2 emissions via
solar deployment and to develop a strong national solar industry
creating high technology jobs. Japan in particular now
has a much stronger PV manufacturing base, developed in response
to domestic demand. In the USA, utilities have played
a stronger role in market development.
Overall, the drivers of regional solar energy demand in applications
where the solar energy is connected to the electricity grid
are:
- regional
programs led by national or state governments and the
extent of subsidies within these
- the
enthusiasm of customers for green energy especially solar
- local
electricity tariffs (high electricity rates encourage
alternative sources of energy)
- solar
(sunlight) conditions (solar electricity prices fall as
sunlight levels increase)
- marketing
strategies by solar companies
- the
extent of the "delivery infrastructure" (the
number of local suppliers and qualified installers)
There
is evidence that Corporations may install solar for "brand
value" and some premium may be available from residential
users to access a clean energy source. However, during
the period that solar costs more than fossil fuels, some
fiscal stimulation is required to secure on grid sales.
The quid pro quo from the solar industry is a continuation
on the path to a self sustaining industry. Most forecasts
suggest that such an outcome will be realized within the
next decade.
In
developing countries, markets have benefited from the steady
decline in solar PV prices but they have also been stimulated
by continued multi-lateral and bi-lateral development aid.
This has meant that solar has been employed increasingly as
an enabling technology behind developmental programs for education,
water supply and healthcare. There is an increasing
focus on micro-finance to improve the affordability of solar
PV systems which may be economical over their life but have
high initial costs. Such credit schemes have been effective
at a small scale, but a culture of credit does not exist yet
in many developing countries. The notable country that
has a strong commercial (un-subsidized) market is Kenya, where
customers opt for low power (10-20W) entry level modules.
Across
all regions and applications, customer awareness of what
solar PV can offer is one of the biggest factors limiting
market growth. Here at Solarbuzz, we are aiming to
make our contribution to addressing this challenge!
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| Government
Funding Programs |
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The
gap between solar and fossil fuel sourced electricity,means
that short term on grid market demand is driven by the extent
of government or utility funding programs.
Graph source: US Department of Energy
Governments that have supported budgets have done so for
the environmental and economic benefits. This funding
can bring forward the point the solar becomes economic in
on-grid markets, since a key success factor for the industry
is the lower costs that will come through high volume manufacturing.
Breakdown
of Annual Budgets 2001
Source: IEA PVPS
|
Japan |
USA |
Germany |
| Research
and Development |
51.0 |
35.0 |
26.7 |
| Demonstration |
16.5 |
0.0 |
5.5 |
| Market
stimulation |
188.4 |
84.6 |
29.6 |
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