By the end of last year, annual contribution of photovoltaic power systems (PVPSs) to electricity demand has passed the 1% mark in at least 22 countries, where Italy was at the top with close to 8%, Greece reached 7.6% and Germany was above 6%, International Energy Agency said in its international publication ‘Trends in Photovoltaic Applications’.
After years of fast market development, last year saw reduced growth, with Japan and the United States driving it. Overall, 34.3 GW of photovoltaic capacity was installed in the IEA PVPS programme’s member countries during 2014, compared to 33 GW the year before, while combined with other major markets the yearly addition was 39.8 GW. Prices have seen a slower decline than in the years before, or even small increases, confirming that the speed of future cost reduction is likely reduced, the report said.
Beating the world average
Global capacity is estimated to have been at 177 GW at the end of last year, or over 1% of world’s electricity demand. As for the other markets followed by Balkan Green Energy News, photovoltaics met almost 4% of electricity demand in Bulgaria and between 2% and 3% in Romania and Slovenia, according to data from the publication. On the other hand, Turkey’s capacity is neglectable compared to its demand. Turkey, having photovoltaic capacity’s penetration at just 0.1% with 0.1 TWh generated last year, actually more than tripled overall installations in 2014, adding 40 MW to bring them to 57.7 MW. At the end of 2011 the country’s cumulative capacity was at 6.7 MW.
Implosion in three markets
Romania added 72 MW last year, raising the cumulative capacity to 1.23 MW. Greece and Bulgaria added very little installations last year, 17 MW and 2 MW, respectively. The overall capacity in Greece was 2.6 GW and Bulgaria had 1 GW. All three countries dropped out of the list of top ten markets by addition, after rapidly growing for several years.
After installing 912 MW in 2012, Greece added 1,04 GW in 2013. Since then the market went down to 17 MW in 2014. It was driven by feed-in tariffs, which were then cut several times. The installations are mainly concentrated in the rooftop segments (commercial and industrial in particular). With dozens of islands powered by diesel generators, the deployment of photovoltaics in the Greek islands went quite fast in 2012 and 2013. Due to the rapid market uptake, grid operators asked in 2012 to slow down the deployment of photovoltaic systems, in order to maintain the ability of the grid to operate within normal conditions.
Bulgaria experienced a very fast boom in 2012 that was fuelled by relatively high feed-in tariffs. Officially, 1 GW was installed in the country with 7 million inhabitants in a bit more than one year, creating the fear of potential grid issues. In addition to possible retroactive measures aiming at reducing the level of already granted tariffs, Bulgarian grid operators have opted for additional grid fees in order to limit market development. The consequence is that the market went down to 10 MW in 2013 and 2 MW in 2014.
Romania experienced a rapid market development with 1,1 GW installed in one year, driven by an renewable portfolio standard (RPS) system with mandatory quotas paid during 15 years. Financial incentives can be granted but reduce the amount of green certificates paid. In 2014, the government decided to freeze two out of six green certificates until 2017 in order to limit the decline of the green certificates price on the market. In addition, the number of certificates granted for new photovoltaic installations went down to three. Romania illustrates the case of an RPS system with green certificates where the level was not adjusted fast enough to cope with the growth of installations, according to IEA’s paper.
Trends for remote islands
In some countries, off-grid systems with backup (either diesel generators or chemical batteries) represent an alternative in order to bring the grid into remote areas. This trend is specific to countries that have enough solar resource throughout the year to make a photovoltaic system viable. In most developed countries in Europe, Asia or the Americas, this trend remains unseen and the future development of off-grid applications will most probably be seen first on remote islands. The case of Greece is rather interesting in Europe, with numerous islands not connected to the mainland grid that have installed dozens of megawatts systems in the previous years. These systems, providing electricity to thousands of customers will require rapid adaptation of the management of these mini-grids in order to cope with high penetrations of photovoltaics, the report said.
Asian countries represented the first regional market for PV for the second year in a row, with China (stabile at 10.6 GW) and Japan (9.7 GW) representing 50% of all installations in 2014. American countries progressed, where the United States added 6.2 GW, while the market went down for the third year in a row in Europe (7 GW). Feed-in tariffs remain the dominant driver for photovoltaic capacity market development with 59% of installations in 2014. However, the share of new business models, including competitive power purchase agreements, tendered feed-in tariffs and installations driven by own consumption rose to more than 22%.
The 20th yearly paper within IEA’s PVPS programme includes information confirmed by national governments; membership includes 24 countries, including Turkey and ten members of the European Union, and five supranational organizations: EU itself, solar associations and the International Copper Alliance.