Sectoral Capsule- The Solar PV Market in the UK (2009 - 2018) - Emerging from the Clouds
The world is slowly warming up to the fact that solar PV is not merely a possible option to meet the future energy needs but it is a major component in energy consumption mix. The UK has grown as a Solar PV manufacturing hub with continued support from the government.
The Renewable Energy Directive, 2009 has set a target for the UK to achieve 15 percent of its energy consumption from renewable sources by 2020. Moreover, the government is anticipating that solar PV has the potential to contribute significantly to achieve this target with 20 GW of installation capacity by 2020.
Solar PV deployment continues to grow globally with the European Photovoltaic Industry Association (EPIA) stating that over 38 GW of solar capacity was installed globally in 2013. The majority of deployment took place in China, Japan and the US.
This in stark contrasts in the Europe where Germany deployed 3.3 GW of solar PV in 2013, relatively low compared to 7.6 GW in the previous year. In the UK, Solar PV accounts for 12 percent of renewable electricity capacity and 2.9 percent of renewable electricity generation. At the end of 2013, Solar PV has 3.4 GW of installed capacity in the UK out of which 2.1 GW was under the Feed-in-Tariffs (FITs) scheme and 1.3 GW large-scale under the Renewables Obligation (RO).
According to the UK Renewable Energy Roadmap Update 2012, there is a potential deployment range of 7-20 GW which is equivalent to 6-18 TWh of electricity generation by 2020. This continuous global growth in solar PV sector indicates that the module prices will be reduced drastically in the near future. Further, it will provide excellent export opportunities for the UK solar PV companies. The expansion of the solar PV sector in the UK has led to the generation of significant levels of expertise in terms of the design and deployment of solar PV systems. This is in addition to the innovative solar PV products being developed in the UK. Further, solar PV has the potential to contribute to economic growth of the country. The swift growth in the sector augurs well for the long term investment and job creation in the country.
Though, the country needs a skilled workforce to be able to implement these technological developments. The global solar PV market has been predicted to reach USD 154 billion by 2018, and the UK is projected to get at least 10 percent of this market. This augurs well for the manufacturing and supply chain industries in the country. It is estimated that there could be 63,000 jobs in PV manufacturing and 150,000 in installation and services by 2020.
However, the sector has its long list of challenges to surmount to ensure solar PV can become a sustainable energy resource. Firstly, the cost of deployment for both small-scale and large-scale solar PV has to be minimized to be competitive with the other sources of energy. Through technological innovations and economies of scale, the cost of solar PV has decline globally over a period of time. The DECC estimates that the cost of domestic solar PV have fallen by over 50 percent in the last decade and there is a room for improvement for more reductions in the next five years.
With predictions of the UK becoming the largest solar PV market in Europe in 2014 coupled with the aspirations of the government to reach 20 GW installations by 2020, the onus is on the global component suppliers and manufacturers to align their strategies to enter the market and choose the most attractive project.