Hype and Disenchantment

There was truly no lack of bad tidings in the summer of 2011: The bankruptcy of the former US flagship manufacturer Solyndra, insolvency of Evergreen Solar, and offshoring by the German manufacturer Q-Cells are just a few of the latest headlines. And even the internationally operating suppliers of equipment to the solar cell and module manufacturers, who are so accustomed to success, have encountered setbacks this year: Although German suppliers of photovoltaic production equipment could substantially increase sales volumes up to the second quarter of 2011 – the German Engineering Foundation (VDMA) reported a plus of some 28 percent – incoming orders plummeted abruptly this summer. The cause is to be seen in the sharp decline in investment activity by the operators of solar factories in Asia. And there are good reasons for this lack of investment: Funding cutbacks in the buyer countries have led to a substantial decline in demand for PV modules compared to 2010. Moreover, recent years have seen a huge build-up of production capacity – above all in China – with present overcapacities far outstripping current market demand. This has already led to a dramatic fall in prices for modules: Between January and August 2011 prices declined by more than 40 percent. One Chinese vendor at the recent EU PVSEC trade show was offering modules for 68 eurocents per watt. Whoever is going to dare to invest hundreds of millions of euros or dollars in new factories in such a business environment?
Is the solar party over at last? A comparison with other industries could be helpful in answering this question. A prime example can be seen in the development of the car industry in the course of more than 100 years: At the beginning of the 20th century, numerous workshops producing horse-drawn carriages or bicycles evolved into companies building hand-made cars. Industrial manufacturing processes, such as were introduced by Henry Ford (assembly line production), led to a significant drop in prices which forced many of these companies out of business. At the same time, low-cost production opened up a mass market. Today, there remain just a few automotive brands, yet most of them are large global players. And nobody can seriously claim that carmaking is not a lucrative industry.

The PV industry is retracing car industry developments in fast motion

What parallels can be drawn for the photovoltaic sector? And: Do solar energy and photovoltaic electricity generation really have long-term prospects compared to other energy sources such as wind, uranium, oil, gas, and coal? From a policy standpoint, the answer to the second question is an unequivocal “yes”. For example, the German Advisory Council on Global Change (Wissenschaftliche Beirat der Bundesregierung Globale Umweltveränderungen, WBGU) reckons that solar energy will be the major primary energy source, alongside natural gas, as soon as 2050 – with a share that is twice and large as that of wind power, for example. In 2100 solar energy i

A driving force in this scenario is electromobility- which will only become really meaningful on use of regenerative energy sources, including photovoltaics, for power generation. If electric cars were to be powered by electricity generated from fossil fuels, the overall efficiency of about 32 percent would be significantly poorer than that of modern petrol or diesel engines. Electromobility will only make se…s predicted to supply two thirds of energy needs.