Can Australia regain its photovoltaics status?
By Martin A Green / 08 October 2007
Source: ScienceAlert – Australia & New Zealand
http://www.sciencealert.com.au/opinions/20070810-16428.html
Photovoltaics – direct sunlight conversion into electricity using solar cells – has long been lumped with nuclear fusion as one of the great hopes for a boundless, clean energy future, although recent fusion interest has shifted to the more difficult ‘aneutronic’ version, which reduces fusion’s radioactive wastes but is even further in the future. Unlike fusion, the technical viability of photovoltaics has long been established, with this occurring in applications requiring extremes of reliability and durability. Since the early 1960s, photovoltaics has been the main power source for space missions of any duration. Closer to home, it has been the standard power source for telecommunications in remote areas of Australia since the early 1980s. In the same timeframe, there was the view that the photovoltaics industry would grow steadily to a size where it would suddenly take off, as reducing prices opened up new market sectors. Wise heads debated how large a growth rate an emerging industry could sustain over a prolonged period, with a compounded rate of 25 per cent a year a consensus view.
The photovoltaic industry has now taken off, growing at a compounded rate of more than 40 per cent a year over the past decade, beyond the expectations of even the most optimistic pundits. Moreover, there are no signs of growth slackening. Last year, a milestone was reached where the annual photovoltaic production of 2.5 gigawatts (GW) exceeded the capacity of new nuclear plant commissioned worldwide (1.5GW) for the first time – although still well below total new electricity generation capacity worldwide of about 150GW projected annually over the next decade, with China contributing a third to this figure.
The recent growth has been stimulated by photovoltaic market development programs, initially in Japan but more recently and successfully in Germany. The feed-in tariff scheme adopted in Germany guarantees a premium for renewable electricity generated over a 20-year period, making installation of such a system a bankable proposition. The extra costs involved are spread among virtually all consumers, diluting the burden to an almost imperceptible level.
At present, the German photovoltaic scheme adds less than 0.1 Euro cents per unit (kW/hr) to the average German electricity bill, dwarfed by more than five cents added by unrelated German taxes. The same scheme had stimulated private investment of over €2 billion in German photovoltaic manufacturing facilities by the end of 2006, created 10,000 jobs (at job-creation costs less than the annual dole) and stimulated an international market valued last year at $25 billion. Some idea of the scale of activity can be gauged by events such as the ‘One Per Cent Party’ held in Munich earlier this year. This was to celebrate a photovoltaic contribution of one per cent to the electricity mix in the Bavarian public grid, from almost nothing a few years ago. With a doubling time of less than two years, the 10 per cent party may not be far off.
At the last count, more than 40 other countries or states had adopted the German model, including Spain, France, Italy, Greece, Turkey, South Korea, Uttar Pradesh, Ontario and Washington State. This diversity has added stability to the prospects of the industry, encouraging further investment and growth.
Another promising development has been the growing interest in photovoltaic-based power purchase agreements (PPAs) in the US. The average commercial electricity price in the US increased 8.0 per cent from 2005 to 2006, with the average residential price increasing by 10.1 per cent. This has prompted companies, particularly those interested in a proactive stance on climate change, to sign 10 or 20-year PPAs as a hedge against further price increases.
Generally the company hosts, rather than owns, the photovoltaic system. The system is financed through a project developer by an investment group interested in a low-risk return, as well as being able to benefit from the appropriate tax incentives and credits. Prominent US retailers such as Wal-Mart, Macy’s, Estee Lauder, Tiffany’s and Target have recently signed such agreements for powering their stores or distribution centres, often in conjunction with energy efficiency upgrades.
The new vitality of the industry has created opportunities for technological innovation that were previously missing. Such innovation is essential to drive down costs. Over the past three years, several UNSW-developed technologies have been commercialised, including ‘semiconductor finger’ technology, with five to 10 per cent better performance than standard products reported in side-by-side production by Suntech-Power. Impending production of UNSW ‘Pluto’ technology, with 10 to 13 per cent advantage, is expected to contribute further to Suntech’s already healthy bottom line.
Perhaps even more important has been the commercialisation of next-generation crystalline silicon on-glass (CSG) thin-film technology, where the active silicon layer is deposited directly onto glass. This technology requires less than one per cent of the silicon used in the thinnest commercial cells, based on silicon wafers, and has the potential for very low costs once production is scaled up.
By comparison with overseas developments, things have been quiet in Australia. There is a generous federal rebate for installing a photovoltaic system, upgraded from earlier levels in May. However, this provides little incentive for local manufacturing or product development, due to the lack of assurance of any continuity in the rebate program. In the 1980s and 1990s, as the largest manufacturer per capita, Australia punched well above its weight in photovoltaic manufacturing but has slowly slipped into insignificance as the local market stagnated, with most locally manufactured solar cells now exported.
However, there are signs of a change. Late last year, South Australia announced its intention to introduce a feed-in tariff scheme similar to Germany’s, at about the same time as Queensland, Victoria and the Australian Capital Territory. Any measures such as emissions trading to ensure prices of conventional electricity better reflect actual costs will also help the adoption of cleaner technologies such as photovoltaics.
The next five years could prove to be a turning point in Australian involvement in photovoltaics. The introduction of feed-in tariffs could see increasing local use of the technology in grid-connected applications, revitalisation of the local manufacturing industry and increased opportunities for local commercialisation of Australian innovation. Despite the recent growth rates, the industry is still tiny compared to its likely final size.
Some well-credentialled groups such as the German Advisory Council on Global Change believe photovoltaics could provide the bulk of the world’s primary energy by the end of the century.
It is still not too late for Australia to regain its position as a major commercial player.
Martin Green FAA FTSE is a Federation Fellow and Scientia Professor at the University of NSW and Executive Research Director of the ARC Photovoltaic Centre of Excellence. He is also a Director of CSG Solar, which commercialise the university’s thin-film, polycrystalline-silicon-on-glass solar cell. His group has developed the world’s highest-efficiency silicon solar cells. He is the author of six books on solar cells and numerous papers in the area of semiconductors, microelectronics, optoelectronics and solar cells. His awards include the 1999 Australia Prize, the 2002 Right Livelihood Award (also known as the Alternative Nobel Prize), the 2004 World Technology for Energy and the 2007 SolarWorld Einstein Award.