The global solar industry could be be on the verge of a new wave of growth, if recent announcements bear fruit.
In simple terms, most of the world's solar manufacturers are in a much healthier financial position than they were a few years ago and supply and demand balance is about right. This opens the door for expansion and new growth.
Focusing on two of the world largest markets for a moment (Europe and China), the expectations for growth and the burning ambition to create a new industrial superpower is key. In these two markets, the cost projections for solar continue to improve and the prospects for non-renewables just keep getting worse, according to government and scientific sources.
China, for example, installed a whopping 14GW of solar energy in 2014 and its medium-term plans just keep getting bigger – the current one calls for 70GW of installed capacity by 2017. The longer term potential, outlined by the International Renewable Energy Agency (IRENA) in a recent report, goes one step further again.
IRENA said: Reaching a 26% share for modern renewable energy would require investments of $US145 billion per year between 2014 and 2030. Accounting for improved health and reduced carbon dioxide emissions, renewables would bring savings of between $US55 and $US228 billion per year to China’s economy.
What’s important about this statement is that air pollution and electricity demand are huge issues in China, driven by the migration of almost 20 million people each year from rural to urban areas. If the savings projected are right and China’s ambition to strengthen its hold on solar manufacturing supremacy continues, they might just get there.
Meanwhile in Europe, which once dominated the world of solar manufacturing and deployment, interesting plans are emerging. A consortium of scientific and industrial leaders from a number of European countries attended a roundtable last week in Brussels, titled Scientific Support to Europe‘s Photovoltaic Manufacturing Industry.
The event put forward ambitious plans for Europe’s return to relevance in the world of solar PV, using a model that has worked before – with the Airbus. The Airbus Group is a European multinational aerospace and defence corporation that was formed to leverage funding, participation and expertise from a wide range of European member states and the broad plan is to repeat this success with “xGW Solar”.
The plan has some strong merit; the concentration of capacity, research and funding should result in a manufacturing facility that is world class and world-scale. The outcomes they are aiming for are high quality, lower cost European-made solar products and a reinvigoration of the European solar industry which has really been in the doldrums lately.
The importation of Chinese solar products into Europe has resulted in the collapse of dozens of companies who simply couldn’t compete, but the insatiable demand for product in China, the changed supply and demand dynamics and the xGW plan may just create a whole new market dynamic in the next few years.
Luckily for Australia, we don’t have to waste time on such ambitious, forward thinking, cost saving measures that would create future high technology industries because we are swimming in coal. What a relief.
Nigel Morris is the director of Solar Business Services.