PV technology has expanded rapidly in the last few years as it has found a wide number of applications. As a stand-alone system, PV can power lights, appliances, water pumps, and water purification and desalination systems. The system includes a charge controller and optionally a battery for power storage.

PV systems are also connected to the grid for power generation and distribution. They can be found in residential and industrial sites and are used by utility companies as well. PV power generation works in parallel to the grid and includes a DC-to-AC inverter. The inverter disconnects the PV from the grid, if the grid experiences a fault.

PV power plants produce from a few hundred kilowatts to several megawatts and are usually integrated within fossil power plants to address peak load demand.

A stand-alone PV system is a single module generating around 50-100 W or multiple modules generating more power usually in remote areas, where distributed power generation is essential to power lights and other essential equipment, including water purification units that generate potable water. In such applications PV systems are cost-competitive with diesel generators and batteries and even with utility power because of the higher cost of such alternatives at remote locations.

Stand-alone systems are reliable, durable, and incur no fuel cost. However, the power is variable depending on solar insolation and the capital cost remains significant.

One particular application of interest, especially in developing countries, is water pumping. PV systems are appropriate for small tasks, as shown in the diagram, at locations receiving at least 3 kWh per square meter of solar insolation. Wind power is more appropriate for larger tasks, whereas diesel power generation is used for large tasks.

Although PV power and wind power are intermittent so not continuously available, water can be stored in inexpensive water tanks for use when needed. The combination of PV and wind increases the reliability of renewable energy generation.

PV systems can be connected to the grid via an inverter. No power storage is necessary, since the system will provide power to the grid only when it operates. PV power helps address peak load demand. The applications of grid-connected PV vary from residential size of a few kW to industrial of a few hundred kW and to utility scale of several MW.

More specifically, residential systems in the US average around 5 kW, but their popularity varies from one state to another depending on incentives and net-metering policy. Overseas, Japan has promoted the use of PV in residential areas.

Commercial scale units average around 100 kW, but can also exceed 500 kW, whereas utility scale systems generate from several MW to over 1 GW. Overseas, the countries that lead the sector are Germany, Italy, and Spain.

Interestingly, in some countries the PV power generation potential from already installed capacity is close to the country’s minimum load, meaning that if PV power was generated at a maximum, it could almost meet just by itself the minimum power demand of those countries calculated at mid-day peak from May to September. For example, in Greece installed PV capacity amounts to 1.98 GW, which is very close to the country’s minimum load that corresponds to a capacity of 2.22 GW.

Source: “Global Market Outlook for Photovoltaics 2014-2018”, European Photovoltaic Industry Association (2014)

Hybrid PV-wind power finds applications in minigrids designed to power small communities or facilities. PV can also be used in conjunction with other forms of renewable energy, such as small-scale hydro and bioenergy. Usually a battery is used to store power and make it available on-demand. A diesel or gas generator can act as a back-up system.

The capital cost of PV systems has been steadily decreasing, which captures the cost of installed PV systems of various scales. Between 1998 and 2011 the drop in cost has averaged 5-7% per year.

Prices are shown in dollars per W of installed PV power. The lower line shows the cost of the PV module itself, whereas the upper lines show the installed cost of complete PV systems. Larger-size units, in excess of 100 kW, benefit from economies of scale compared to small units below 10 kW and medium units between 10 and 100 kW. Overall, costs have been cut in half from around $12 per W to below $6 per W of installed capacity. This remarkable progress is expected to continue and render PV systems cost competitive with fossil within a short period of time.

Source: “Photovoltaic (PV) Pricing Trends: Historical, Recent, and Near-Term Projections”, DOE Technical Report, NREL/LBNL (2012)

Looking now at the operating cost, which is the cost of the electricity produced, again we see an impressive decrease, this time from 21.4 cents per kWh in 2010 to almost half of it, 11.2 cents per kWh, in 2013. This progress provides good reason to believe that a target of 6 cents per kWh can be met by 2020.

The graph also shows the cost breakdown among the various components of a PV system. Roughly speaking, about only 1/3 of the cost of PV electricity in 2013 was due to the cost of the PV module itself and even less was due to the cost of the inverter and other hardware. The largest component of the cost, close to 40% was associated with the cost of permitting, inspection, and installation, the so-called soft costs.

Source: NREL (accessed 2014)

The dropping cost has spurred an increase in worldwide PV capacity, which increased to 139 GW by 2013 from just 2.6 GW ten years earlier. Growth is particularly impressive in Europe and China.

Source: “Global Market Outlook for Photovoltaics 2014-2018”, European Photovoltaic Industry Association (2014)

Here we see a quick overview of the current PV sector status on each continent, superimposed on a world solar irradiation map. Europe leads the way with a current capacity of 81.5 gigawatts, followed by Asia at 37.3, North America at 13.5, and Oceania at 3.3 gigawatts. Despite their strong solar resources, Africa, the Middle East, and South America lag significantly behind. Adoption of renewable energy policies and economic stability will be needed to attract more PV investment into those parts of the world.

Photograph Source: “Global Market Outlook for Photovoltaics 2014-2018”, European Photovoltaic Industry Association (2014)

The market performance and prospects for PV is shown in this graph. Capacity has grown quickly since 2007 and is expected to continue its growth as more countries realize the value of solar power as a domestic, clean, and sustainable resource. Global capacity in 2013 was 139 GW, which represents a 15-fold growth over the course of just 6 years. The forecasts call for a 3-fold further increase by 2018 according to a high-growth-rate scenario or a 2.3-fold increase according to a low-growth-rate scenario. In either case, significant investment will flow into the PV sector.

Source: “Global Market Outlook for Photovoltaics 2014-2018”, European Photovoltaic Industry Association (2014)

Countries located close to the equator, so called sunbelt countries, have particularly strong potential for PV power generation, as shown here. The diagram is interesting as it captures not only a country’s PV attractiveness on the vertical axis, but also its investment attractiveness. China provides an example of a country with a relatively high mark on both criteria, whereas Pakistan and Cambodia, although they rank higher than China in PV potential, suffer from significantly higher investment risk. In between lie many developing countries, including India, Indonesia, and several southeast Asian and north African countries.

Source: EPIA 2014, Unlocking the Sunbelt Potential of Photovoltaics, 2010

Commercial development of PV faces a number of challenges. Ownership, construction, operation, and maintenance need to be clearly sorted out. Long-term power purchase agreements with either a utility or a private customer will need to be in place for financing to be approved. Part of such an agreement will be grid connection issues, quality of renewable power and service, and contractual obligations. The project should take advantage of any favorable policies in place by the State of the federal government to improve its financial outlook. Project financing will need to be secured, likely through a combination of debt and equity. The surrounding community should be educated and involved through a community outreach effort in order to address any potential issues before they escalate. Cultural sensitivity should be demonstrated in overseas projects with the help of local experts. Finally, given that energy projects are public-private partnerships, cooperation with all stakeholders will be essential all the way from the design phase of the project.

The future for solar power looks promising. Combining photovoltaics and concentrating solar power the sector’s capacity in the US is expected to grow to over 48 gigawatts by 2040, a significant increase thanks to the anticipated growth primarily of PV.

Source: US Energy Information Administration “Annual Energy Outlook 2014” (2014)

In terms of power generation, it is projected that solar will be the fastest growing renewable source of energy at an average annual rate of 7.5%. Again, most growth will be from electricity generated from PV systems.

Source: US Energy Information Administration “Annual Energy Outlook 2014” (2014)

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