Solar Market and Policy

Solar Energy Market

Despite financial difficulties for western solar panel producers, solar capacity worldwide continues to grow

Photovoltaics (PV) has seen a 50-fold increase in its share of the electricity generation market worldwide between 2006 and 2016. 375 TWh (375 billion kWh) were generated in 2016, which is 1,8% of all electricity. The highest percentage of PV penetration of the national electricity market was in Honduras (12.5%), followed by Greece (7.4%), Italy (7.3%), Germany (7.0%) and Japan (4.9%).

New installed PV capacity around the world grew by 50% to 75GW from 2015 to 2016, bringing the total installed PV power generating capacity to 312 GW. 48% of this is in Asia, 34% in Europe (down from 42% in 2015), and 16% in the Americas. And this was achieved with a fall in worldwide investment in solar energy – from $156.7 billion in 2015 to $112.4 bn in 2016, indicating plummeting costs and improved efficiencies, in both the technology and the market.

At this rate of growth, by 2020 there will be more electricity generated by photovoltaics than from all nuclear power stations put together. And they said it could not be done!

Despite the success of the inclusion of solar PV into the energy transition plans of the EU, and technological leaps forward, there are several hurdles yet to be overcome if the rate of development is to continue as hoped. The most efficient solar cells rely on metals, such as silver, whose price and rarity mean they place a limiting factor on growth of the sector, unless alternatives can be found. China produces more than half of the world’s solar panels and exports them at a price that makes local industries, such as in Germany, uncompetitive.

Global solar growth 2008-16

Global solar capacity growth 2008-16

The EU had a total of 102 GW in solar PV capacity in 2016. This faster than anticipated growth is due to policy-driven demand creation, very high levels of investment in manufacturing capacities, and improvements in all fields of related technologies.

From 2010 to 2017, the cost of electricity generation from PV fell by 75%. In the USA, solar parks offering PPA (Power Purchase Agreements) of 4.2 euro-cents/kWh (5 US cents) is standard, and some countries have such favourable conditions that project tenders have offered a price of 2.5 euro-cents/kWh (25 USD/MWh). Peru awarded PPAs at the beginning of 2016 as low as 48 USD/MWh, a record-low level without financial incentives, beating the previous record set by UAE. This demonstrates clearly that solar, like wind, can compete with fossil and nuclear in price. When, as is inevitable, the to-date externalised costs of fossil fuel, such as health and environmental damage, are internalised, solar will be far cheaper.

PV installed capacity connected to grid /GW

Year 2015 Added 2015 2016 Added 2016
World 227.1 50 303 75
China 43.5 15.2 78.1 34.5
USA 25.6 7.3 40.3 14.7
Japan 34.4 11 42.8 8.6
India 5.1 2.0 9.0 4.0
EU 138 8 144 6
Germany 39.7 1.45 41.2 1.5
UK 8.8 3.5 11.6 2.0
France 6.6 0.88 7.1 0.6
Spain 5.44 0.06 5.49 0.06
Italy 18.9 0.3 19.3 0.37
Switzerland 1.36 0.3 1.64 0.25
Austalia 5.1 0.94 5.9 0.84

Data source: IEA International Energy Agency:

Snapshots of global photovoltaic markets
2015 and 2016.

By way of comparison, at this rate of expansion, PV looks likely to overtake nuclear power in installed capacity by 2020. Nuclear power worldwide has an installed capacity of about 370 GW from 450 reactors, and only a limited growth is expected. The growth in PV, on the other hand, although uneven, is becoming more widespread. In 2016 24 countries exceeded the 1GW PV capacity threshold. Asia accounts for two-thirds of the growth worldwide, and China alone accounted for two-thirds of the Asian growth, or nearly half of world PV growth.

    Top Ten Photovoltaic in Europe /kWh per person

  1. Germany 465
  2. Italy 372
  3. Greece 364
  4. Belgium 260
  5. Malta 237
  6. Czech Republic 202
  7. Bulgaria 180
  8. Switzerland 174
  9. Spain 171
  10. Luxembourg 170
    Top Ten Wind in Europe /kWh per person

  1. Denmark 2240
  2. Sweden 1441
  3. Ireland 1294
  4. Portugal 1215
  5. Spain 1080
  6. Germany 971
  7. Austria 656
  8. UK 570
  9. Finnland 559
  10. Netherlands 491
    Top Ten Solar and Wind in Europe /kWh per person

  1. Denmark 2390
  2. Schweden 1453
  3. Germany 1436
  4. Ireland 1295
  5. Portugal 1293
  6. Spain 1251
  7. Greece 837
  8. Austria 780
  9. UK 727
  10. Belgium 720

European Solar 2017 Q1

In the first quarter of 2017, the EU collectively installed 1.8GW of new solar (down from 2.4GW Q1 2016).