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Photovoltaics: what future can we expect for Europe?

Gerard Creuzet
Gérard Creuzet
President of Institut Photovoltaïque d’Île-de-France
Key takeaways
  • The global photovoltaic industry is currently concentrated in China. But the unprecedented growth of the market is opening up opportunities for European players, who are benefiting from three trends.
  • After a long period of incremental progress, where the difference was only in price, technological accelerations are being achieved in Europe.
  • In areas such as automotive, agriculture and construction, various niches could open the way to new market segments for highly differentiated products, far from the commodity logic that currently dominates.
  • Finally, European regulations are evolving, with more focus on the life cycle assessment (less carbon-intensive production, recyclability), which is likely to change the situation.

In pho­to­voltaics, what dif­fer­ences are there between offers oth­er than on price?

It is true that, in terms of tech­nol­o­gy, the solar pan­el indus­try is cur­rent­ly char­ac­terised by a cer­tain homo­gene­ity. Most play­ers use poly­crys­talline or qua­si-monocrys­talline sil­i­con tech­nol­o­gy, imple­ment­ed in dif­fer­ent architectures.

This does not mean that there is no inno­va­tion, but rather that inno­va­tion has so far fol­lowed an incre­men­tal log­ic. The improve­ments are nonethe­less sig­nif­i­cant over time, both in terms of per­for­mance and cost. Con­cern­ing the per­for­mance of devices: the first pan­el prop­er, devel­oped in 1954 by Bell Labs (forty years after the first tests of sil­i­con pho­to­volta­ic cells), had an effi­cien­cy of 6%. A few years ago, it was 13 or 14%, and today a good pro­por­tion of the solar pan­els on the mar­ket have an effi­cien­cy of around 20%.

The cost of solar pan­els has fall­en by 80% in ten years for good, and bad, reasons.

As for the cost of pan­els, it has fall­en by 80% in ten years, for good and bad rea­sons: the good rea­sons are tech­no­log­i­cal progress and the scal­ing up of the ener­gy tran­si­tion. The bad rea­sons are mas­sive sub­si­dies, par­tic­u­lar­ly in Ger­many, which instead of help­ing Euro­pean indus­try to take off have led to indus­tri­al over­ca­pac­i­ty and a price war in which only a few Chi­nese man­u­fac­tur­ers have been able to sur­vive; they now exert an over­whelm­ing dom­i­na­tion over the mar­ket. Today, price is the main cri­te­ri­on, well ahead of per­for­mance, both for installers of pho­to­volta­ic parks and for pri­vate individuals.

Does this mean that the game is up for the Euro­pean industry?

No, for at least three rea­sons. The first is that the mar­ket is boom­ing, and there is room for new play­ers. We do not yet have the final fig­ures for 2022, but in 2021, accord­ing to the Inter­na­tion­al Ener­gy Agency, world pho­to­volta­ic ener­gy pro­duc­tion increased by 179 TWh (i.e. + 22%), a record, to exceed 1000 TWh. This growth is dri­ven by the Chi­nese mar­ket, fol­lowed by the US and the EU.  Accord­ing to the Unit­ed Nations Net Zero sce­nario, an annu­al solar PV pro­duc­tion lev­el of about 7400 TWh will have to be reached in 2030. Start­ing from the cur­rent 1000 TWh, this implies an aver­age pro­duc­tion growth of about 25% per year dur­ing the peri­od 2022–2030.

In this huge mar­ket, pro­duc­tion in Chi­na will remain dom­i­nant, and we must look close­ly at what is hap­pen­ing in the US. But the growth of the Euro­pean mar­ket will also be very impor­tant, which opens up prospects for Euro­pean play­ers to get back into the race because – this is the sec­ond rea­son – we are enter­ing a phase of matu­ri­ty of sev­er­al tech­no­log­i­cal inno­va­tions which, with­out being dis­rup­tive in the strict sense of the word, con­sti­tute deci­sive accel­er­a­tions, with tru­ly new technologies. 

The most promis­ing are the ‘tan­dem’ cells that com­bine sil­i­con and per­ovskite. This makes it pos­si­ble to bet­ter exploit the solar spec­trum, adding ultra­vi­o­let light to vis­i­ble light and infrared light (well cap­tured by sil­i­con). Such tech­nol­o­gy shifts the the­o­ret­i­cal bar­ri­er that pre­vi­ous­ly placed the max­i­mum effi­cien­cy at just over 29%. It is now around 40%. In the lab­o­ra­to­ry, we are already going very far: last Sep­tem­ber, Dutch researchers suc­ceed­ed for the first time in cross­ing the 30% effi­cien­cy thresh­old. Indus­tri­al­i­sa­tion is in sight: the IPVF, which brings togeth­er the strengths of many play­ers (includ­ing EDF, Total­En­er­gies, the CNRS and the Ecole Poly­tech­nique), is going to install the first pro­duc­tion line in Alsace using this sil­i­con-per­ovskite tan­dem tech­nol­o­gy with its indus­tri­al part­ner, Voltec Solar. Europe is there­fore at the fore­front of this break­through tech­nol­o­gy, both in research and development.

A third rea­son is that while the com­modi­ti­sa­tion of solar pan­els will con­tin­ue, with stan­dard­ised prod­ucts, we are now also wit­ness­ing the devel­op­ment of a mar­ket with much more var­ied appli­ca­tions, dri­ven by a log­ic of dif­fer­en­ti­a­tion. I will give you three exam­ples. The first is agri­v­oltaics, with semi-trans­par­ent pan­els that make it pos­si­ble to opti­mise the asso­ci­a­tion between crops and pan­els on shades. Here we are deal­ing with fine adjust­ments, as close as pos­si­ble to the mar­ket, needs and weath­er con­di­tions: com­mer­cial­ly and indus­tri­al­ly, there is room for dif­fer­en­ti­at­ed prod­ucts, sup­port­ed by play­ers capa­ble of pro­vid­ing a service.

The sec­ond exam­ple is solar ener­gy on vehi­cles. Today, this is a niche, with a few exam­ples in the plea­sure boat indus­try (the chal­lenge: turn­ing off the engine with­out turn­ing off the air con­di­tion­ing and the fridge). But the rise of elec­tric cars is cre­at­ing a mas­sive need for solu­tions to cool the vehi­cle when it is sta­tion­ary or, con­verse­ly, to keep the bat­tery warm so as not to lose per­for­mance in win­ter. Solar ener­gy is a good can­di­date: man­u­fac­tur­ers and equip­ment sup­pli­ers have projects in the pipeline.

Encour­aged by well thought-out reg­u­la­tions, indus­tri­al play­ers will extend the val­ue chain to the last part of the life cycle: recycling.

Third exam­ple: solar pan­els are good for build­ings, but they are not very ele­gant. A mar­ket for solar tiles is emerg­ing, which again will devel­op accord­ing to more local needs (not all tiles are the same, there are region­al dif­fer­ences) and on the basis of aes­thet­ic qual­i­ty, from nich­es that will grow. Here again, there is room for agile and local play­ers. Recent­ly, we have seen the devel­op­ment of pho­to­volta­ic tiles with a design very close to that of tra­di­tion­al tiles

Apart from these niche mar­kets, which are set to expand, can we imag­ine game chang­ers that would change the sit­u­a­tion for the Euro­pean industry? 

Yes, par­tic­u­lar­ly in the log­ic of the Euro­pean Green Deal, which com­bines indus­tri­al pol­i­cy and eco­log­i­cal require­ments. In terms of pho­to­volta­ic pan­els, Euro­pean stan­dards and reg­u­la­tions have so far paid lit­tle atten­tion to the life cycle issue. How­ev­er, this will become increas­ing­ly impor­tant. Two points in par­tic­u­lar could make a dif­fer­ence: the first is the amount of ener­gy con­sumed (and CO2 emit­ted) to man­u­fac­ture a pan­el. At present, the “ener­gy return” of pan­els is not very good: a pho­to­volta­ic mod­ule has to run for about two to three years to com­pen­sate for the ener­gy need­ed to man­u­fac­ture it. More­over, those man­u­fac­tured in Chi­na have a car­bon foot­print that is not very trace­able, and prob­a­bly not very good. A reg­u­la­tion empha­sis­ing this dimen­sion would change the situation.

In the same spir­it, anoth­er aspect of the life cycle is like­ly to become more impor­tant: recy­cla­bil­i­ty. This could encour­age a form of cir­cu­lar econ­o­my, as soon as, encour­aged by well thought-out reg­u­la­tions, indus­tri­al play­ers extend the val­ue chain to this last part of the life cycle. Here again, it is at the region­al lev­el – that of the EU – that this inte­gra­tion between indus­try and ser­vices will be most relevant.

Richard Robert

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