Solar Energy Markets Solar Energy Markets an Analysis of the Global Solar Industry
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Solar Energy Markets Solar Energy Markets An Analysis of the Global Solar Industry Philip G. Jordan The Economic Advancement Research Institute Wrentham, MA, USA and BW Research Partnership, Inc. Wrentham, MA, USA AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK • OXFORD PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO Elsevier 32 Jamestown Road, London NW1 7BY, UK 225 Wyman Street, Waltham, MA 02451, USA Copyright © 2014 Elsevier Inc. All rights reserved No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without permission in writing from the publisher. Details on how to seek permission, further information about the Publisher’s permissions policies and our arrangement with organizations such as the Copyright Clearance Center and the Copyright Licensing Agency, can be found at our website: www.elsevier.com/permissions This book and the individual contributions contained in it are protected under copyright by the Publisher (other than as may be noted herein). Notice Knowledge and best practice in this field are constantly changing. As new research and experience broaden our understanding, changes in research methods, professional practices, or medical treatment may become necessary. Practitioners and researchers must always rely on their own experience and knowledge in evaluating and using any information, methods, compounds, or experiments described herein. In using such information or methods they should be mindful of their own safety and the safety of others, including parties for whom they have a professional responsibility. To the fullest extent of the law, neither the Publisher nor the authors, contributors, or editors, assume any liability for any injury and/or damage to persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions, or ideas contained in the material herein. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress ISBN: 978-0-12-397174-6 For information on all Elsevier publications visit our website at store.elsevier.com This book has been manufactured using Print On Demand technology. Each copy is produced to order and is limited to black ink. The online version of this book will show color figures where appropriate. Acknowledgments I would like to offer my very special thanks to my colleague and friend Dr. Edward A. Cunningham. His advice has been a great help in the development of this book. I am particularly grateful to Barry Friedman of the National Renewable Energy Laboratory, Andrea Luecke of The Solar Foundation, and Tom Kimbis and Justin Baca from SEIA for their deep understanding of the importance of solar labor mar- ket issues and the assistance that they have given me in developing my career. I also wish to acknowledge Ryan Young, our research analyst at BW Research Partnership, who provided exemplary data collection and analysis for this text. I would also like to express my deep gratitude to Professor Zygmunt Plater and Professor Benjamin Sachs. Each played a pivotal role in my professional develop- ment and instilled within me a deep drive to discover, to learn, to teach, and to act. This book would not have been possible without the constant, patient support that I received from my wife, Anne. Thank you for the late night read-throughs and gentle nudges along the way. 1 Introduction: An Overview of the Solar Industry The 2007 US banking crisis was the first of a series of shocks to the global economy with trillions of dollars of wealth evaporating from the globe and years of scandal and upheaval to follow. Economic markets have been slow to recover, and labor markets even slower. Few industries have grown, let alone thrived. Despite these unprecedented downward global pressures, the solar industry has experienced a global revolution with profound implications for business, government, and the environment. This text is intended to provide a unique, global perspective of the US solar industry, exploring the differences between the solar industry today and previous growth spurts such as the 1970s brief solar boom. This book relies on information from the nation’s first comprehensive solar industry survey, pioneering survey work from adjacent industries, and insights from key thought leaders in the energy sector in the United States, and from international leaders in solar development. At its most basic level, solar power is a broadly defined term for harnessing the power of the sun to generate heat or electricity, which humans have been doing for at least 5000 years! There are many different technologies at use in the commercially available products that capture solar energy, from passive design features of buildings to advanced thin film photovoltaic (PV) panels. Each of these products share similari- ties, such as shared incentives and market drivers, as well as many differences from their technological innovations to their economic viability. Generally speaking, the solar industry is categorized by the various technology- driven product lines that make up the array of choices for the global consumer. The three largest categories by technology are PV (electric power generation), solar thermal (electric power generation), and solar water heating. Solar space heating and cooling are also growing areas with particularly strong potential in the northeast United States, though such applications are clearly well behind the other uses in terms of market penetration. Solar thermal products use solar energy to heat water or other liquids. These can be used for heating water for domestic/commercial use or to produce electricity through the use of a steam turbine system. Solar water heaters employ a simple design utilizing aluminum fins and insulated storage tanks to supply hot water for pools or domestic use. To generate electricity, however, much more heat is needed, and the most common mechanism for obtaining this heat is through concentrating solar power (CSP). CSP uses mirrors to focus solar rays to provide intense heat that generate significant steam, which can then be passed through a variety of steam turbine systems. The majority of this book will focus on the largest segment photovoltaics, but will also include pertinent details in each chapter regarding solar thermal technologies. Solar Energy Markets. DOI: http://dx.doi.org/10.1016/B978-0-12-397174-6.00001-5 © 2014 Elsevier Inc. All rights reserved. 2 Solar Energy Markets Due to recent price declines in photovoltaics and the much lower maintenance required (PV panels have no moving parts!), many projects throughout the southwest United States that were planned to use CSP have been changed to PV projects. Across the globe, recent significant price drops in traditional PV panels have signif- icantly changed the solar industry, shifting interest away from producing more efficient products towards producing traditional photovoltaics even more efficiently. With price declines of approximately 70% over a 2-year period, the economics of PV power sys- tems have improved dramatically and far outcompete rival solar technologies. PV products represent the lion’s share of the solar industry. In a recent survey of solar employers in the United States, over 90% of all solar installation companies work with PV products.1 Photovoltaics operate by using arrays of semiconductors, typically made of monocrystalline or polycrystalline silicon, to produce direct cur- rent (DC) energy from solar radiation.2 The global rise in PV panel installation has led to significant growth of solar electric power in Europe and the United States, and dramatic increases in panel manufacturing throughout the globe.3 The United States has installed approximately 4 GW of solar power through 2011, tying it with Spain for fourth place in total generation, behind Germany, Italy, and Japan.4 Though the total amount of energy generated by photovoltaics has increased dramatically over the last 10 years, the overall demand growth over the first part of that period has meant that PV merely kept up with other technologies, as the percent- age of electricity produced by PV systems had not changed significantly over time.5 This inability to capture increasing share of the electrical profile shifted in 2009, when the solar capacity of the United States experienced incredible growth, with no signs of a slowdown. During this solar boom, for the first time in generations, the United States experienced energy demand declines due to the great recession and accompanying slow recovery. And the pace continued to quicken; utility-driven PV installations increased 109% alone in 2011 representing an additional 758 MW of solar power.6 Installations only tell part of the US solar story. Despite widespread miscon- ceptions, perpetuated by media stories, the United States is a net exporter of solar products, meaning that US manufacturers produce more solar components than are installed domestically. Historically, only 30% of the photovoltaics installed in this county are domestically sourced, but the United States exports large quantities of solar products to other nations. In 2010, for example, the United States imported $3.7 billion of solar products, while exporting $5.6 billion, resulting in a net export of nearly $2 billion in the industry.7 Every mainstream discussion on photovoltaics eventually leads to China, but it is becoming increasingly apparent that it is for the wrong reasons. Though it is true that Chinese contribution to the global industry has been primarily related to production 1 The Solar Jobs Census 2011. The Solar Foundation, October 2011. 2 See http://science.nasa.gov/science-news/science-at-nasa/2002/solarcells/. 3 http://www.eia.gov/cneaf/solar.renewables/page/solarphotv/solarpv.html. 4 BP Statistical World Energy Review 2011 (retrieved 8.08.11).