Wednesday, April 4, 2012

Solar Industry around the world: A brief analysis

Sarfaraz A.K. (2012)

Subsidies by several European countries on photovoltaic cells have increased their demand in Europe. Production has therefore increased causing a decrease in average cost of a single cell by as much as 50% over the past year. A small solar-power system that cost around $900 a year ago can now be bought for $500. Chinese manufacturers are now giving even cheaper solar power solution to homes and businesses. Rising energy needs, unstable fuel prices and other geo-political factors are pushing the governments of even developing countries towards solar power solutions. As a result, the demand for solar-energy has shown consistent increase over the past few years.

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In India, the Ministry of New and Renewable Energy is working with the private sector to set up domestically manufactured solar power plants. The Ministry is targeting production of 4000 MW to 10,000 MW in the first phase of the project. The first solar energy plant of India, owned by billionaire Anil Ambani of Reliance Power, started operations in March, 2012 and is now generating 40MW of electricity. The Pakistani Prime Minister has recently held meeting with the Chairman & CEO of Suntech Power Holdings of China, the biggest PV manufacturer of the world, who is expected to visit Pakistan sometime this year.

The production and consumption of photovoltaic cells in Asia are primarily centered on the developed countries, such as China, Japan, South Korea & Saudi Arabia. The US has recently imposed duties on Chinese PV manufacturers but their sales in Japan to households have increased tremendously owing to the Fukushima Plant Disaster. In South America, Brazil has introduced pro-solar-energy legislation, giving tax benefits to solar energy consumers.

In Canada, the President of Canadian Solar Industries Association Elizabeth McDonald could see solar energy contributing 20% of all the Canadian energy needs in the coming 20 years. The Ontario power authority’s feed-in-tariff program can serve as a role model for developing countries to follow. In Europe, Germany is leading the way by covering 15% of its energy needs through solar power. On the other hand, the government in the United Kingdom was in a legal battle with the solar industry over subsidy cuts. The French PV market continues to grow, despite being ignored by the government. Feed-in-Tariffs in France have been reduced by as much as 70% whereas tax credits given to those purchasing solar PV systems have been halved. The French PV market, along with the Italian, has accounted for more than 75% of the total PV market growth for Europe in 2011. 
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In North America, governments, rights groups and members of civil societies are debating on ascertaining the true cost of solar power plants i.e. the opportunity cost of the plot of land utilized for solar power generation. The primary problem faced by emerging markets of developing countries over solar energy production is poor infrastructure and lack of availability of funds while mature markets of developed countries are facing problems related to strategic decisions on power generation.