Navigant is latest to predict cost-competitive solar PV by 2020

22 Jul 2015

Analyst report mirrors recent comments by First Solar CEO and suggests that annual market for PV installations will exceed $150BN in less than a decade.

The annual global market for solar photovoltaic (PV) installations will exceed $150 billion by 2024, as the technology shifts from a high-cost, subsidized source of electricity to one that is genuinely competitive with conventional fuels on a retail basis.

That is the latest outlook from Navigant Consulting, whose new report Distributed Solar PV is published as the UK – ranked as the largest European solar market in 2014 - plans cuts to its subsidies for the technology.

The Navigant report also echoes recent comments by First Solar’s CEO Jim Hughes, who reportedly predicted at last month’s Edison Electric Institute meeting in New Orleans that “community solar” would play a dominant role in utilities within just five years.

Roberto Rodriguez Labastida, a senior research analyst at Navigant, said: “The distributed solar PV generation market continues to transition from being dependent on lavish feed-in tariffs and environmentally conscious wealthy homeowners to a cost-effective source of electricity that is gaining traction across market segments and customer types.”

He added: “The successful adoption of new business models is expected to continue to further drive the industry in its transition to a post-incentive world in most major markets.”

Over the course of the coming decade, the expanding solar industry is expected to create more intense competition - putting continued pressure on profit margins, but encouraging further vertical integration and driving mergers and acquisitions.

Subsidy-free by 2020?
As is evidenced by many recent market studies, PV activity has already shifted dramatically from Europe to the Asia-Pacific region and the US, where “grid parity” is being approached in many locations.

Navigant also identifies Chile, South Africa and the Middle East as particularly promising geographies as PV becomes commoditized. Last month analysts at Greentech Media said that they believed solar PV would account for half of all the new electricity-generating capacity added globally over the coming five years, and that by 2020 the PV market would be “almost entirely unsubsidized”.

The Navigant report echoes that sentiment, concluding: “By the end of the decade, solar PV is expected to be cost-competitive with retail electricity prices without subsidies in a significant portion of the world.”

One of the keys to achieving that is increasing the conversion efficiency of PV cells and modules, for which several approaches are being pursued with both established and novel technologies.

For example last month First Solar announced that it had increased the efficiency of a full-size module based around its cadmium telluride (CdTe) cells to a world record 18.6 per cent. That compares with an average module conversion efficiency of just under 15 per cent for its current production output, while the firm’s best research-grade CdTe cells have now reached 21.5 per cent efficiency - indicating further headroom to improve module performance.

And while rival crystalline silicon modules are unlikely to register that kind of efficiency improvement on their own, the emergence of potentially very cheap perovskite cells that could be used in tandem with crystalline silicon suggest another route for cutting the cost of PV-generated electricity in dramatic fashion.

• Navigant’s new report Distributed Solar PV is available now via the analyst company’s web site.