The global solar photovoltaic (PV) installations crossed 480 GW by March 2019. Solar PV has become the fastest growing power source worldwide, overtaking wind power by a fair margin. As per the International Renewable Energy Agency, 94 GW of installations were made in 2018 alone, with 64 per cent of the total capacity having been added in Asian countries – China, India and Japan. These three countries, along with the US and Germany, have the highest solar PV installed capacities worldwide.
However, PV technology trends are not similar across these countries, since the uptake of PV module technologies is highly dependent on a combination of factors such as cost, project location and module specifications. For example, in generic terms, crystalline modules have higher efficiencies and lower degradation rates, and they are less expensive than thin-film modules. However, thin-film technologies have lower temperature-related power losses and better response to diffuse radiation. Thus, each technology comes with its own set of pros and cons; and its uptake in a particular region is determined on the basis of maximising efficiency, while minimising project life cycle costs.
Renewable Watch analyses the recent solar PV technology trends in these five leading global solar markets…
China witnessed 44 GW of new solar capacity addition in 2018, while no other country in the world even crossed the 10 GW capacity addition mark. This solar superpower also accounts for supplying roughly two-thirds of the global cell and module capacities. The announcement of the “531 New Deal” by the Chinese government in May 2018 halted domestic subsidies. This created overcapacity in international markets and led to a decline in global module prices. The country’s influence on the global solar PV module trends is not new, as it is the leading exporter of the highly cost-competitive crystalline modules to all the major solar markets worldwide.
China’s domestic solar market has seen a diminishing demand for polycrystalline (poly-Si) cells due to its efficiencies being lower than monocrystalline (mono-Si). This is evident from bidding results for the third phase of China’s Application Top Runner Program, which saw mono-Si Passivated Emitter Rear Cell (PERC) cells having a majority share amongst all technologies. As per Taiwan-based energy market research company EnergyTrend, development of bifacial cells is expected to increase in the future as they can generate more power. However, the dominance of mono-Si PERC is likely to continue. Other new-generation cell products will see an increased uptake in the long term with a gradual rise in their production. As far as cell and module prices are concerned, a stabilisation trend can be witnessed after the steep decline in costs due to overcapacity, and bouncing back of the domestic solar market.
Of the total solar capacity of 2,125 MW tracked under a study conducted by Renewable Watch Research in January 2018, crystalline silicon accounted for 57 per cent and thin-film for 36 per cent. The remaining 7 per cent was based on a combination of crystalline and thin-film technologies. This is quite different from the rest of the global PV markets, which are solely dominated by crystalline silicon technology. Thin-film technology was more popular in the initial years of solar development in India, and is thus dominant in projects commissioned during 2009-12. This technology type is suitable for the Indian weather conditions having heat and humidity, as it experiences slower degradation compared to crystalline.
However, with the introduction of Chinese modules in the country and the world at large, crystalline technology has become the preferred choice among solar power developers. India witnessed 9.2 GW of new solar capacity addition this year, even after the implementation of 25 per cent safeguard duties on modules imported from China and Malaysia. The majority of these plants were set up with Chinese modules as they are cost-competitive even after application of duty, and also as India’s domestic industry is not equipped to deal with the rising demand.
As India is a highly price-sensitive market, historically, Indian developers have preferred poly-Si modules due to their lower costs. However, with a decline in global mono-Si prices, a significant number of new installations in the country are being based on mono-Si technology, which is more efficient than poly-Si and is less sensitive to high temperatures. The demand for high efficiency products like bifacial is still low in the country and is expected to pick up in the future as prices of these technologies come down.
The US installed 8.4 GW of new solar PV capacity in 2018-19, due to an increase in the pace of investments in the country ahead of the decline in tax credit incentives in the next few years. The current cell and module prices are higher in the US than in the rest of the world, as global crystalline solar imports are affected by Section 201 tariffs (30 per cent duty to decline to 15 per cent in four years). Chinese imports, in addition, are affected by Section 301 tariffs (25 per cent duty). Even then, module prices have fallen in the US, with greater decline in poly-Si than mono-Si.
Most of the installed solar capacity in the US is made of crystalline. However, in high temperature areas like Nevada, thin-film technology is also used significantly. Thin -film has also seen significant uptake in the residential solar segment, which may rise in the near future as thin-film cells are free from the imported tariffs. While crystalline technology continues to dominate the market, the US is also seeing an increase in the uptake of bifacial technology.
Japan installed 6.5 GW of new solar PV capacity in 2018-19. Although Japan is a relatively closed market with very high quality standards, Japanese solar PV developers have also started importing a vast quantity of solar cells and modules from China. This is primarily due to a lack of trade restrictions in the country and improvement in the quality and efficiency of Chinese solar products. Domestic module manufacturers in Japan are also increasingly shifting away from PV manufacturing to higher-value market segments like system integration and power production. The country’s solar market is highly competitive, with the market share not concentrated amongst a few top players and technologies.
An analysis of Japan’s solar imports from China by EnergyTrend indicates a preference for modules rated less than 300 W. The country’s solar market is largely dominated by poly-Si modules in the range of 270-275 W. However, the share of high efficiency mono-Si products is gradually increasing in line with the global trends. Regarding the price of solar cells and modules, Japan has witnessed a decline in prices since the introduction of the feed-in tariff (FiT) mechanism in 2012. However, solar power prices still remain one of the highest in the world, due to the presence of FiTs instead of competitive bidding.
September 2018 marked an end of the minimum import price (MIP) measures in the European Union (EU), which were being imposed on solar PV cells and modules from China in 2013. This led to an overcrowding of Chinese products in the EU, enabled by their declining prices. Germany witnessed 3.5 GW of new capacity additions in 2018-19, mostly in the self-consumption residential, commercial and industrial segments. With the recent reduction in FiTs for rooftop solar systems, the demand for cheaper Chinese solar products is likely to increase in Germany. The country mainly relies on high efficiency mono-Si solar products. However, technological developments by the country’s premier research institutes to decrease the cost and improve the efficiencies of bifacial cells have led to an increased uptake of this technology in recent years.
The year 2018-19 has been eventful for the global solar PV supply chain. While the US and India focused on safeguarding their domestic manufacturers through increased duties on imports, the EU terminated its MIP policy. The uncertainty created by China’s “531 New Deal” impacted PV module prices worldwide. However, in due course of time, these uncertainties will subside and markets will stabilise, with the PV industry set to grow further. Improvement in mono-Si technology will make it the dominant solar technology worldwide. The market share of poly-Si will slowly decrease as it gives way to more efficient technologies. Though its uptake will increase, bifacial technology may remain limited only to areas with high albedo or reflectance.
By Khushboo Goyal