The global photovoltaic (PV) market is growing rapidly, exceeding 500 MW in 2003. Japan has become the largest PV market at 225 MW in 2003, with grid-connected applications now dominating over 70% of the global demand. Key drivers of continued PV market growth include policies supporting renewable energy for reasons such as compliance with Kyoto protocols, energy independence, and rural electrification goals. The document projects the global PV market will have a compound annual growth rate of 18.5% through 2008.

1. PV Market Overview & Implications for Energy
Storage
Paul Garvison
November 5, 2003

2. Market Snapshot 2003
The global market for PV will exceed 500 MW in 2003 (575 MW
estimated).
Market growth of over 30% is expected for 2003-2004
Japan is now the world’s largest PV market – 225 MW estimated for
2003.
Grid connected markets now dominate with over 70% of the global
PV demand.
Many traditional off-grid PV markets are flat, led by the slump in
telecom.
The top 8 companies grew their share of the overall market from 84%
in 2001 to 89% in 2002.

3. Global market estimate
Japan 2002
Germany
Rest of Europe 100
155
USA
RoW 45
2001
33 85
86
115
Total: 418 MW
40
30 75
Total: 346 MW
BP Solar internal estimates All figures are in MW

4. Global market estimate
500
Grid connect 418 MW
Annual shipments in MW
400 Remote habitation
Industrial
300
200
100
0
1996
1997
1998
1999
2000
2001
2002
BP Solar internal estimates

5. Module price vs shipments
18 450
Global shipm ents (MW)
16 400
$/Wp prices @ 2002 $s
Global shipments (MW)
14 350
Module price ($/ Wp)
12 300
10 250
8 200
6 150
4 100
2 50
0 0
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Source: Strategies Unlimited & BP Solar internal estimates

6. Market overview - Japan
The Japanese market is estimated to be 39% of the
global market in 2003, up from 37% in 2002.
Applications for the residential program are increasing at
35 –40% per year.
The residential program accounts for over 80% of the
Japanese market.
Subsidies to residential customers are now less than
$1/Wp – lifecycle cost parity with grid electricity will occur
in the next few years for residential customers.
Growth in 2004 is expected to be 35%

7. Market overview - Germany
The German market will account for 21% of the global
market in 2003, up from 20% in 2002.
2003 is the last year of the 100,000-roof program in its
current form with the combination of concessional loan
and feed-in tariff – approvals were closed in June. 350
MW have been installed.
The new feed-in tariff law for renewables is soon to be
debated in the German parliament – strong support still
exists for solar but wind is under pressure and the
program costs are an issue due to budget deficits
Growth is expected to resume after the new law is in
place

8. Market overview - USA
The US was about 12% of the global market in 2003.
About 1/3 of the market is for grid connected applications
in California.
The funding for commercial (>30 kW) systems in CA is
now secured through 2008, but residential funding will
run out in 2004 without additional approvals
New buydown programs in the Northeast will create
expanding markets in NJ, NY, PA with some in CT and
MA.
Growth is expected to be 25% or more in 2004

9. Market overview - ROW
Other European nations are now adding grid connected
programs: Netherlands, Spain, UK, Italy, etc.
Most of the rest is off-grid with a split between rural
habitation and industrial of about 50/50.
Large rural infrastructure projects such MSIP, MORD
and PRODEEM are becoming more common.
Grassroots markets where users purchase small
systems outright, get microloans, or pay for services are
growing in many less developed or developing countries
like India.
Growth is expected to be about 15% in 2004

10. Global PV Market Projection
Global PVMarket
1400
’02 –’08
1200
CAGR
1000 Global OG 15.1%
800 US GT 24.2%
M
ROWGT 16.5%
600
Germany 12.7%
400 Japan 23.4%
Total 18.5%
200
0
2001 2002 2003 2004 2005 2006 2007 2008
Year

11. PV Market External Drivers
Green influence on national agendas
Kyoto treaty compliance
Energy independence/security issues
Increasing costs of conventional sources
Aging or inadequate transmission and distribution infrastructure
IEA goals: 300 million grid connected homes in developing
countries and 200 million homes in developed countries by
2010
Most OECD countries now have programs to incentivize PV
and other renewables
Acceptance of PV as a viable means of providing rural
electricity in many situations
Wider user of remote electronic or telecom devices
Enabling technologies such as LED lighting, high efficiency
refrigerators, etc.

12. Current PV Storage Market
Estimate & Projection
Off-grid PV market of 155 MW in 2003 translates to ~ 5000
MWh of storage @ $100/kWh = $500 m
Off grid growth to 355 MW by 2008 implies storage
requirement of ~ 11,000 MWh @ $100/kWh = $1.1B
Replacement market by 2008 ~ 5000 MWh of storage @
$100/kWh = $500 m – assuming 1GW installed off grid and 6
year service life
Little near term market for storage in GT sector in Japan and
Europe due to high grid reliability – little perceived need.
Small potential in the U.S. with existing business model -
perhaps 10% of GT applications in 2008: 13 MW translates to
~130 MWh (2 days) = $13 m.

13. Market Directions for PV Energy
Storage
Lower lifecycle costs:
– Longer life/higher reliability/lower maintenance
– Lower capital cost
– Reduced product stewardship costs
Dispatchable power to grid
– Requires reliable control system
– Adds value to PV energy as a “peak shaving” method, but
economics unclear with current technology
Large scale storage – needed to achieve PV energy
contribution beyond 5-10% of total electricity
Energy security - some interest has appeared following recent
grid outages in the Northeast
– But economics of alternatives (eg. gensets) are presently
considerable more attractive than PV/battery