Rising energy and oil prices in light of the economic slowdown, and a heightened awareness of the
environment, have led to an increase in global incentives for the diversification of energy sources and
greater utilization of renewable energy segments. In this context, one of the important renewable energy
segments is solar power, which at present is witnessing a stupendous growth in installed base as well as
a doubling of demand.
The total installed capacity for solar photovoltaic cells (SPVC) in the moderate scenario (as outlined by
GreenPeace), wherein commitment from country governments is assumed to continue albeit at a low
level, is expected to exceed 5,200 MW by 2010. Developing economies such as China, India and Taiwan
are expected to contribute the maximum to this capacity addition. However, there is some risk of the
utilization levels plummeting in the event of incentives being discontinued or reduced, given that capacity
already exceeds demand and heavy initial investments can deter demand.
High competition and achieving cost effectiveness through innovation are the broad characteristics of the
SPVC industry. At the end of 2008, there were more than 150 manufacturers of solar cells and modules,
in the global SPVC industry. Companies such as Q-Cells, Sharp and Kyocera are major participants in
the industry and the top 10 players in the industry account for over half of its production. Competition is
also equally rife between crystalline silicon solar cell manufacturers and thin film solar module
manufacturers. Thin-film technology is expected to dominate the production of SPVCs in the coming
years, judging by the cost advantages and increasing acceptance levels. From the demand perspective,
most of the consumption of SPVC came from Europe in 2008 with Spain and Germany being the largest
consumers.
Government initiatives have been the major growth drivers as well as responsible for driving investments
in the field. Notable among these is the German Feed-in Law introduced in 1999, driving photovoltaic
system installations in Europe. The Japanese government has encouraged technology development in
the area of SPVC to combat the shortage of natural conventional energy sources. Despite the lack of
uniform incentives for the implementation of solar PV systems in the US, the California Public Utilities
Commission (PUC) has begun to offer performance-based incentives since 2007.
