The worldwide photovoltaics (PV) market has been growing at over 40% per annum in recent years and the contribution is starting to make a significant contribution to electricity generation.
Photovoltaics are important because of their decentralised/ centralised character, its flexibility for use in an urban environment and huge potential for cost reduction. The PV industry has been increasingly exploiting this potential during the last few years, with installation prices more than halving in the last few years. Current development is focused on improving existing modules and system components by increasing their energy efficiency and reducing material usage. Technologies like PV thin film (using alternative semiconductor materials) or dye sensitive solar cells are developing quickly and present a huge potential for cost reduction. The mature technology crystalline silicon, with a proven lifetime of 30 years, is continually increasing its cell and module efficiency (by 0.5% annually), whereas the cell thickness is rapidly decreasing (from 230 to 180 microns over the last five years). Commercial module efficiency varies from 14 to 21%, depending on silicon quality and fabrication process.
The learning factor for PV modules has been fairly constant over the last 30 years with costs reducing by 20% each time the installed capacity doubles, indicating a high rate of technical learning. Assuming a globally installed capacity of about 1,500 GW between 2030 and 2040 in the Energy [R]evolution scenario with an electricity output of 2,600 TWh/a, generation costs of around $ 5-10 cents/kWh (depending on the region) will be achieved. During the following five to ten years, PV will become competitive with retail electricity prices in many parts of the world, and competitive with fossil fuel costs around 2030. Cost data applied in this study is shown in Table 4.6. In the long term, additional costs for the integration into the power supply system of up to 25% of PV investment have been taken into account (estimation for local batteries and load and generation management measures).