Bright Outlook for Solar
By Jenny Bieksha, Bishop & Associates Inc.

Recent worldwide developments have highlighted the security, economic, and human costs we pay for relying so heavily on fossil and nuclear energy. Japan’s Fukushima nuclear catastrophe has led many countries to rethink the role nuclear energy plays in providing low-carbon electricity. Even prior to this disaster, numerous countries, particularly in Europe and Asia, had already made the decision to invest in alternative energy sources. Despite losing some momentum as a fall-out of the economic crisis, these countries still intend to diversify their energy mix. The push to deliver a secure energy supply suggests a continued robust outlook for the renewables market.

Renewable energy sources grew to supply an estimated 20% of final global energy consumption in 2010. Total global investment in renewable energy reached $211 billion in 2010, up 32% from $160 billion in 2009. Wind farm development in China and small-scale solar PV installation on rooftops in Europe played a key role in this growth. Developing economies are also strongly considering renewable energy sources.

The balance of power in renewable energy has been moving toward developing countries for several years. The biggest reason for this has been China’s drive to invest in cleaner energy sources to power its phenomenal growth. In 2010, China alone was responsible for $48.9 billion of financial new investment. In addition, there was growth of 104% to $5 billion in the Middle East and Africa regions, and by 39% to $13.1 billion in South and Central America.

Solar Photovoltaic Power
Photovoltaic power is becoming an increasingly important part of the energy mix around the globe. The PV industry experienced significant growth in 2010. Capacity additions grew to 16.6 gigawatts (GW) in 2010 from the 7.2 GW installed in 2009. The total installed capacity now amounts to around 40 GW worldwide. The EU dominated the global PV market, led by Italy and particularly Germany, which installed more PV in 2010 than the entire world did the previous year. Beyond Europe, the largest PV markets were Japan (1.0 GW), the United States (0.9 GW), and China (0.6 GW). 

The top 15 solar cell manufacturers produced 55% of the 23.9 GW of global production. Cell manufacturing has continued its shift to Asia, with 10 of the top 15 manufacturers located in the region. Crystalline silicon production continued to dominate the market. While thin film’s market share declined to 13%, production of thin-film increased in 2010 by a record 63%. Thin-film production has diversified, and is now spread among a larger number of firms.

Thin-film technologies may follow a different pattern, with manufacturers locating in or near to key end markets. Thin-film manufacturing is highly automated, so the cost of labor is a relatively minor factor, while the cost of materials is a more critical factor. The U.S. is a good example, where in recent years the market share for thin-film has been much higher than the global average. For example, 44% of total U.S. PV installations in 2010 used thin-film technologies.

Weak European PV market demand in the first half of 2011 has created a global surplus of solar module inventories, which are now forecast to reach a record 8.6 GW by the end of Q211. Recent price reductions from Tier 2 Asian manufacturers will place enormous pressure on others to follow suit. The collapse in prices is driving downstream companies to focus on inventory reduction in order to avoid write-offs. The global PV market size has been revised to increase to only 20.3 GW in 2011.

Much of the progress in recent years has varied by country because of assorted national regulations and incentive schemes, as well as availability of financing. Germany, the most mature market today and with the lowest prices for PV systems, will continue to decrease its Feed-in-Tariffs (FiTs) to follow the declining PV prices. In Italy, the past year has seen inaccurate information and speculation about the country’s market volume, causing authorities to react with emergency measures that may risk PV development in the country.

The solar industry responded to price declines and rapidly changing market conditions by consolidating, scaling up, and moving into project development. As an example, Japanese manufacturers have become involved in direct retailing, installation, and after-sale service. Some traditional energy companies have diversified by expanding their operations into renewable energy.

Solar Hot Water and Heating
Solar water heating technologies are becoming widespread and contribute significantly to hot water production in several countries. Solar hot water collectors alone are used by more than 70 million households (most of them in China), as well as in many schools, hospitals, hotels, government, and commercial buildings. In 2010, existing solar water and space heating capacity increased by an estimated 25 gigawatts-thermal (GWth). China has dominated the world market for solar water heating for several years. Almost all installations in China are for hot water only. There is a trend in Europe toward larger combined systems that provide both water and space heating.

Concentrating Photovoltaics (CPV)
The CPV market is making headway in the renewable energy landscape. The trend toward utility-scale PV plants continues, with almost 9.7 GW of capacity by the end of 2010, accounting for almost 25% of total global PV capacity. The EU continued to lead with 84% of the global total by year’s end; however, the U.S. dominates the CPV pipeline with over 92% of the total contracted projects. CPV is competing against flat-plate PV and CSP. With a lower levelized cost of electricity (LCOE), CPV systems are cost-advantaged in high solar resource locations. A number of large U.S. projects were announced in 2010, and other projects are planned in Australia, Egypt, France, Italy, Jordan, Mexico, Spain, and South Africa.

Concentrating Solar Thermal Power (CSP)
After years of inactivity, the CSP market has rebounded. Nearly 478 MW was installed during 2010, bringing the global total to 1,095 MW. While most industry activity occurred in the two leading markets of Spain and the U.S., markets also grew in Algeria, Australia, Egypt, Morocco, and China. Parabolic trough plants account for 90% of CSP plants worldwide, and for nearly all of the existing capacity in operation. Globally, nearly 2.6 GW of additional CSP capacity was under construction by late 2010, with all plants expected to be operational by 2014.

A new CSP facility in Nevada is scheduled to come online in 2012, with a capacity of almost 400 MW, making it the world’s largest CSP plant currently under construction. Environmental impact, always a major concern, has been addressed by a system design that almost eliminates the need for extensive land grading and concrete footpads. The tower uses air-cooling rather than water cooling, resulting in 90% less water usage. With the inclusion of multiple stakeholders (developers, utilities, and environmental groups in the initial planning), this project will likely be used as a template for future CSP developments.

The CSP industry also saw several acquisitions by major energy players. The value chain remains vertically integrated, but may see a change as markets expand and companies specialize. There are emerging market opportunities in developing countries with a poor or non-existent grid and power infrastructure. Despite an upsurge in activity, there are warning signs that the dramatic reductions in PV costs are challenging the growing CSP market, at least in the U.S. During 2010, there were several cancellations of projects where utilities switched from CSP to utility-scale PV technologies. According to industry experts, substitutions toward PV may represent a growing trend.

Balance of System (BOS) Costs

PV market analysts are forecasting that by 2012, balance of system (BOS) costs will pass PV module costs on a cost-per-watt scale. While the PV module will remain the most costly single part of a PV system for the near future, the combined cost of BOS components will create greater activity and innovation across the BOS value chain. Attention will shift to include more economic gains for BOS components and services. Expectations are for BOS supply chain consolidation, integrated business models, and increased supplier competition as companies see the BOS as a major revenue opportunity in the PV market.

Rapid Growth in Solar PV Drives Junction Box Innovation
Amphenol Industrial, a supplier of solar interconnect systems, has introduced its Helios Hercules junction box series. The junction box features standardized exterior box geometry for automated assembly, making it ideal for use on rigid silicon panels used throughout PV applications. It also features rear alignment with tape and tabs to maintain a low breakage rate during robotic assembly. Hercules can be used in conjunction with Amphenol’s H4 self-locking connectors.



Molex has introduced its new SolarSpec™ smart Junction Box. The smart box features a series of interchangeable covers embedded with a SolarEdge™ optimizing chipset to provide varying levels of electronic integration. Functionalities of the smart box will include system safety, shut-off and arc detection, security monitoring and theft protection, performance tracking on output levels and panel efficiencies, remote diagnostics, and power optimization. The unique modular concept allows for maximum flexibility and easy upgrade of the PV-panel functionality, since the electronic PCB always resides in the removable cover.

TE Connectivity has expanded its product range for photovoltaic installations with three new junction boxes. The SOLARLOK automated junction box is suited for fully automated mass production, allowing manufacturers of crystalline solar modules a shorter assembly time and increased reliability. It also features protection for the plug contacts throughout the process up to final assembly. In this way, the product offers a high degree of mating safety. Also released for thin-film photovoltaic modules, are the SOLARLOK micro junction box and the SOLARLOK one-rail junction box.

Yamaichi Electronics has developed a new photovoltaic junction box, Eco-Si, for crystalline solar modules in the Y-Sol® product family. It offers the advantages of hermetically-sealed overmolding technology. The cables and electronics of the junction box are overmolded in a single, highly efficient work step. This overmolding process gives the junction box its shape and ensures absolute freedom from leaks. The Eco-Si junction box is the first junction box for photovoltaic modules with an IP protection class of IP68.


Emerging Technologies
There is a great deal of research and development taking place in the various segments of the solar industry, much of which is still in varying stages of lab-level development. Research institutions and companies are pursuing new approaches, such as the use of silicon ink, innovative etching and coating processes, multilayer solar cells, and new contacting methods. With the speed that solar is moving at today, it is easy to believe these technologies may break into the commercial sector faster than even the scientists working on them imagine.

Today, more people derive energy from renewable energy resources as capacity continues to grow, prices continue to fall, and shares of global energy from renewable energy continue to increase. PV markets are stronger than ever and appear on the energy map of several countries as a real alternative to conventional electricity sources. In several countries, grid parity for residential systems will be reached in the coming years. Continued strong growth is expected in all renewable energy sectors in the coming years, with projects at various stages of development around the world.

Jenny Bieksha Director, Renewable Energy, Medical, and Military, Bishop & Associates Inc. Jenny Bieksha joined Bishop & Associates in 2008 as its market segment director for the renewable energy, and the test, measurement, and instrumentation markets. She is currently a management consultant specializing in strategic business planning, with an emphasis on the development of program, market, and product plans. Bieksha has more than 20 years of experience in the electronics industry, with a background in market management, business development, channel sales, product management, and operations for ITT Corporation, Delphi Connection Systems, and Hughes Aircraft Company. Bieksha has a bachelor of science degree in marketing from the University of Wyoming, and has since received heralso holds a certificate as a project management professional.