Wednesday, March 4, 2009

Europe Continues to Outshine US with Solar Leadership

Electronic News/Suzanne Deffree/March 4, 2009

Thanks to an early and enthusiastic embrace of solar energy, more than 80% of new worldwide photovoltaic capacity installed in 2008 was in Europe, according to iSuppli.

The United States may have helped to pioneer solar technology, but it has fallen behind nations like Germany, China, and Japan in producing it.

According to iSuppli Corp, these countries have moved ahead of the United States, with Germany holding the lead in this fast-growing alternative energy market due the nation’s and Europe’s long-term commitment to solar power.

“Europe’s early and enthusiastic embrace of solar energy is paying off, with the region leading in production of photovoltaic (PV) cells, potentially paving the way for a 300 billion Euro savings in electricity costs,” said Henning Wicht, senior director and principal analyst for photovoltaics at iSuppli, in a statement.

According to iSuppli's data, European companies supplied 27.4% of global PV cells in terms of wattage in 2008, just besting China’s total of 25.8%, and exceeding Japan's 16.2% and the United States' 13.7%.

The market research company reported that more than 80% of new worldwide PV capacity installed in 2008 was in Europe. Germany and Spain accounted for 84% of Europe’s installed PV capacity during the year.

“Beyond leading in the production of PV cells, Europe is by far the world’s largest market for solar installations,” Wicht said. “This hasn’t happened by accident, as European governments, research institutions, and industry players during the last two decades have worked in close coordination to reach this point.”

Behind the collaborative effort was an aspiration to move the European economies away from hydrocarbon-based electricity sources while creating jobs and establishing a new industry capable of competing on the global stage.

The US Recovery Act, endorsed by semiconductor industry groups including the IPC and the SIA, takes a similar approach in its alternative energy strategy and is expected to in part spur tech job growth while making the US a more formidable competitor in such spaces as solar energy.

ISuppli suggested that when looking for ways to boost the US solar market the Obama administration consider what the company called the "main factor behind Europe’s leadership in this area," feed-in-tariffs. Feed-in-tariffs -- incentives that allow entities that feed the grid with solar energy to receive premium pricing, making the return on investment on PV installations more attractive -- are starting to slow in 2009, iSuppli said, noting this is especially true in Spain. However, such incentives have successfully served their purpose by driving down prices and building a large-scale, competitive PV supply chain, according to Wicht.

ISuppli also noted that during the recent Sustainable Energy Week event in Brussels, the EU Commission further presented a plan for renewable energy in which solar plays a strategic part and will generate 15% (12% by PV electricity and 3% by concentrating solar thermal systems) of the region’s electricity demand by 2020.

According to iSuppli, the world’s top producer of PV cells in 2008 was Q-Cells of Germany. As PV demand expands around the world in the coming years, iSuppli said it expects European companies will continue to play a major role.

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