The document summarizes the status and prospects of solar electricity. It notes that solar PV has experienced rapid growth and dramatic price reductions. While still having potential for huge cost reductions, solar PV is emerging as an important electricity source. It is transitioning from a niche technology to a mainstream power source due to attractive regulations and cost reductions. The document concludes that solar PV capacity is expected to continue strong growth and that solar PV is becoming a viable electricity source in many places without subsidies.

1. Solar Electricity: Status and prospects
Ole Grimsrud
June 14th, 2013

2. Sustainable
• No fuel, no emissions
• No moving parts, no noise
• Low to no maintenance
Modular
• Standardized components
• Short installation time
• Easy to expand with
demand
PV produces electricity directly from sunlight

3. Contents
PV Status: Rapid growth; dramatic price (& cost) reductions
PV Prospects: Still huge cost reduction potential
Conclusion: PV emerging as important electricity source

4. … industrial scale operations
…PV leap-frogging other
technologies, still with vast
scope for improvements
… demand increasingly based
on commercial fundamentals
… transformational scale and
scope in generation, and as an
investment area
… to
Small scale, using IT
industry residuals …
Continuous discussions
on winning technology…
Dependency on
subsidies…
Being seen as marginal by
mainstream power
PV module monthly spot market
prices (USD/Wp)
6/13/136/13/136/13/136/13/136/13/13
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From …
Solar PV is transitioning from a niche technology to a
mainstream source of power

5. Attractive regulations & cost reductions → strong
PV growth; expected to continue
Sources: Solarbuzz; EPIA; GTM; iSuppli; Scatec Solar; McKinsey demand model
2000
0.2
35-50% p.a.1
+48% p.a.
201514131211
25.4
10
17.5
+72% p.a.
7.5
08
5.6
07
2.9
06
1.8
05
1.5
04
1.1
03
0.6
02
0.4
01
0.4
09
Annualcapacity additions; GWp
Rest of World
Japan
US
Italy
Spain
Germany
0
5
10
15
20
25
30
35
40
45
50
35 – 60 GW1

6. Historic learning rate of ~20% for PV modules
Doubling of
cumulative PV
production
~20 % module
price reduction

7. PV becoming less dependent on subsidies

8. Contents
PV Status: Rapid growth; dramatic price (& cost) reductions
PV Prospects: Still huge cost reduction potential
Conclusion: PV emerging as important electricity source

9. Source: McKinsey & Co, April 2012
McKinsey, April
2012:
«The cost of a
commercial-scale
rooftop system
could be reduced
by 40% by 2015,
and by another 30%
by 2020 – to
$1.20/Wp»
Incremental improvements → further substantial
cost reductions

10. Quantum leap potential in today’s PV technology
Ingot/waferPolysilicon Cells Modules
• Wafer ~1/2 of PV module cost
• ~1/2 of material wasted as kerf loss
• Wafers could be significantly
thinner
• Kerf-free wafering
• Direct wafer crystallization
• Epitaxial growth
• Multi → Mono → Super-mono
• More sophisticated cell design;
multi-junction Si-based devices
• Improved optical properties
• η only ~15-20%
• Systems cost increasingly area-
dependent → greater impact of
higher η
ISSUESAPPROACHES

11. Contents
PV Status: Rapid growth; dramatic price (& cost) reductions
PV Prospects: Still huge cost reduction potential
Conclusion: PV emerging as important electricity source

12. PV: ~ 40% of new power capacity in EU in 2012
Sources: EWEA (European Wind Energy Association); EPIA (EU Photovoltaic Industry Association)
Notes:
1. Capacity ≠ kWh
• Wind power: Average yearly load ~
2,000 hours
• Solar power: EU yearly load ~ 1,200
hours
2. In some countries, PV is already
significant
• In Germany, 4.6% of all electricity
production in 2012 came from PV
(3.2% in 2011)
2012 share of new power capacity installation in EU

13. Germany: Significant PV; grid parity reached ~now
Sources: eex; Macquire

14. Bloomberg: 70% of global power generation
capacity added 2012 – 2030 is expected to be
renewable
The news right now is
dominated by stories of
pain caused by
overcapacity on the
supply side of clean
energy, and the lure of
cheap shale gas.
But this is playing out
against the falling
costs of renewable
energy and of all the
technologies required
to integrate it into our
energy system, and
falling costs win.

15. PV is finally (or already?) a viable source of electricity!
“The perception of renewables as an expensive source of electricity is largely obsolete,
given the huge cost reductions achieved in recent years”
“Rooftop solar PV is already better than average residential prices in Australia,
Germany, Spain, Portugal, and the South-West US and is not far away in other countries”
Citigroup, March 2013
“Key markets such as India,
China and the US are
experiencing strong demand
and solar projects are now
being developed with
minimal or no incentives.”
Deutsche Bank, February 2013
““Solar has turned from a heavily-subsidised marginal
technology into a mainstream source of power
generation.”
”Purely based on economics, we believe almost
every family home and every commercial rooftop
in Germany, Italy and Spain should be equipped
with a solar system by the end of this decade.”
UBS, “The unsubsidized solar revolution”, Jan. 2013

16. Kalkbult, South Africa: 75MW under construction
Key figures ~315 000 modules, approx 156 km of Substructures, 84 Inverters
Project Owners 39% Scatec Solar AS (Norway); 21% Norfund (Norway); 40% S-A
Duration Construction 12 months