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Solar.Presentation PV market Germany USA


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Comparing the US PV and German Solar Market

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Solar.Presentation PV market Germany USA

  1. 1. Solar PV Market Germany versus USA 3rd Solar Convention Las Vegas October 7th 2010 Volkmar Kunerth, MBA President, Solar Partners International
  2. 2. Agenda Solar PV Market German PV market Germany Conclusions Outlook US PV market U.S.A. Conclusions Outlook German versus US market Economics Grid parity Implications Bureaucracy Challenges Regulatory Environment Federal Resources Global Solar Outlook Future Optimistic signs and challenges Questions Solar Partners International
  3. 3. Why Photovoltaic? -PV can be used anywhere -PV can be used in any size -PV is scalable -Grid connected and OFF-Grid possible -Only one initial investment -PV largest investment -PV has the highest cost reduction potential -PV reduces CO2 production and helps fight global warming Solar Partners International
  4. 4. German PV Market -Installations until 2009: Over 10 GWp -Predicted Installation in 2010 alone: 10 GWp -150,000 people employed in the industry -PV is the largest source of investment: $29 billion -80% of installations are roof installations -Dramatic growth since the introduction of the Renewable Energy Sources Act (EEG) in 2000 -EEG guarantees operators a feed-in tariff (FIT) fixed for 20 years and a purchase guarantee for the electricity produced --> investing in a solar electricity system is a very secure investment for 20 years
  5. 5. German PV Market
  6. 6. German PV Market - German Feed in tariff laws (FIT) - “A feed-in tariff (FIT) is an energy supply policy that offers a guarantee of payments to renewable energy developers for the electricity they produce.” - Under most FIT policies, the government establishes a legal obligation for electric utilities to purchase all of the electricity produced by qualifying developers.
  7. 7. German PV Market
  8. 8. German PV Market
  9. 9. German PV Market Source:
  10. 10. German PV market Advantages Leads to rapid deployment of Disadvantages renewable energy in Germany Cost for German electricity customer until 2008: $48 Billion Reduced investment risk: makes it easier to finance projects (If calculated for 2009 and 2010 we reach $100 Billion!) Faster reduction of CO2 output Prices are set too high, utilities and ratepayers are stuck with Employment for 150,000+ people those costs for the duration of the contracts (20 years). Innovation engine The electric grid can only take so much alternative energy due to high fluctuations in input.
  11. 11. German PV Market Conclusions: -> FIT was a very suitable model to jump-start the German PV industry -> FIT not sustainable business model in the long run because it is too expensive -> Future financial burden for German customers -> Current grid is limited: Smart grid technologies necessary in the future for further growth -> Intelligent storage technologies needed for off-grid installations
  12. 12. German PV Market -Outlook: -After the January FIT decrease, the German parliament finally voted in an additional decrease last July -16% decrease for rooftops, 11% for reconversion areas, 15% for the other installations -No more feed-in tariff for PV installations on agricultural land; the new law is expected to considerably affect the market in the coming years. -Market could stabilize in the 3 to 5 GW annual installations level by 2014, if the present support scheme is maintained, with adequate FIT decreases in line with the expected price decrease.
  13. 13. US PV Market -USA has started to become one of the top PV markets -477 MW installed in 2009; 40 MW of which are coming from off- grid installations -State of California leading the pace in 2009 -2010 could see the market rise from 600 MW to a possible 1 GW of new installations. -By 2014, the market could reach 3 GW installed (moderate scenario) -Policy-Driven scenario up to 6 GW could be installed -Depending on market response to incentives in different states
  14. 14. US PV Market The EPIA Global Market Outlook for Photovoltaics (PV) from 2010 to 2014
  15. 15. US PV Market The EPIA Global Market Outlook for Photovoltaics (PV) by States
  16. 16. US PV Market -Complex, evolving solar policy environment -Overlapping federal, regional, and state regulation -Solar policies are not harmonized -Developers have to think like power companies -Tax driven project financing -Banks and developers are sorting out the new financing structures for US solar projects
  17. 17. US PV Market Source:
  18. 18. US PV market Advantages The US has strong natural solar Disadvantages resources Overlapping federal, regional, and state regulation; Solar Increasing energy prices and policies are not harmonized strong public support Developing a downstream U.S. PV market strategy requires a U.S. peak demand will increase deliberate, highly specified 17.7% by 2017 according to NERC approach to each application, state market and market segment Huge long term potential Funding hurdles U.S. federal government is unlikely to provide level of financial subsidy as in the European markets
  19. 19. US PV Market Conclusions: - Short term conditions challenging and main hurdles are likely to remain - US government’s lack of incentives by comparison to other regions - Overlapping federal, regional, and state regulation - Complicated and long negotiations with utilities -> Long term outlook very promising -The US will become the biggest and most important PV solar market in the world
  20. 20. US PV Market Outlook: - Demand for PV projects in the United States is rapidly expanding as a result of falling system prices - The market is evolving as utility-scale projects gain steam and innovations in project financing emerge - With decreasing prices, a chain reaction will occur causing a decrease in project payback time, finally an increase in attractiveness of solar retail and commercial markets in the US - Global solar market players from all parts of the value chain are seeking strategies to gain access to U.S
  21. 21. US versus German market USA Germany The US has better natural solar resources Germany jump started the solar economy Grid parity reached earlier due to more sun exposure High market penetration already reached. Market growth will slow U.S. peak demand will increase 17.7% by 2017 according to NERC down due to lower state incentives German solar companies are seeking to go international and transfer technology and knowledge to international markets
  22. 22. USA versus Germany -2
  23. 23. USA versus Germany cost of solar Germany: Low Cost per kWh $0.35 (residential and commercial) High Cost per kWh $0.47 (residential and commercial) California: Low Cost per kWh $0.17 (residential and commercial) High Cost per kWh $0.22 (residential and commercial) Source: SGC
  24. 24. Residential electricity rates USA
  25. 25. Grid parity influencers -Grid parity is the point at which alternative means of generating electricity is equal in cost, or cheaper than grid power -High radiation levels + high electricity prices + falling pv system prices=> faster grid parity -Hawaii has reached grid parity already; California will be next -When grid parity is reached market will grow rapidly
  26. 26. Grid parity-Market development
  27. 27. Challenges for market growth -No national market coordination -Bureaucracy -Increasing policy complexity -Various federal, state and local policy types for promoting solar -Various financing options -Private and commercial customers get confused
  28. 28. DSIRE -DSIRE: Database of State Incentives for Renewables and Efficiency -DSIRE lists a total of 616 Federal State, Utility and Local Financial Incentives for Solar - 518 Incentives for PV DSIRE lists a total of 367 Federal, State, Utility, and Local Regulatory Incentives for Solar - 356 Incemtives for PV
  29. 29. Federal Resources DSIRE: Database of State Incentives for Renewables and Efficiency: - US Department of Energy Efficiency and Renewable Energy: - National Renewable Energy Laboratory: - US Energy Information Administration: - Energy Star: - Federal Business Opportunities: - US Department of Energy: - EPA: -
  30. 30. Global Solar Outlook -Currently 20 GW installed -30-35 GW installed by the end of the year -Plunging prices of solar modules -Europe is still leading the market with installations (Germany and Italy) -47 countries have FIT but danger of Solar market bust in countries with FIT -US, China, India, Japan and France will experience significant growth -By 2015 cumulative solar capacity will have reached 65-100GW or more - Demand for PV systems is still heavily dependent on the general economic climate and most importantly on governments’ support schemes. -
  31. 31. Thank you! Questions and discussion Please send e-mail to for presentation and sources