But PV Won't Turn That Fast

Implications: I am finding a slight case of irrational exuberance seeping into the photovoltaic prediction industry.  The latest is a prediction reported in the Financial Times of a fivefold increase of photovoltaic production by 2010.  The industry will grow nicely, but not at this frenetic rate.

Analysis: I do expect photovoltaic solar (PV) to reach a production level of 15-20 gigawatts (GW) a year.  The upper level of that rate would supply about 1% of global nameplate capacity.  If one assumes a 20% capacity factor globally, one would need up to 100 GW of production to generate each percent of electricity.  Fundamental increasing demand and cost of electricity, especially daytime peak electricity suited for solar, will provide a bedrock that any sizable, well run PV company will benefit from, subsidies or no subsidies.

I just don't expect it to be reached by 2010.  A global growth rate of 40% per year will be hard enough to sustain.  In looking at Prometheus Institute's numbers of output from 2006 to 2007 that were published last March, to go from 3,700 MW to 15,000 MW by 2010 would require a PRODUCTION, not CAPACITY, annual increase of 167%.  Prometheus reported one German company (Ever-Q) five Chinese companies (Yingli, JA Solar, Solarfun, Gintech and Trina) and one Taiwanese company (Gintech), who achieved that production percentage increase, and they have done it once.  Only Yingli's increase involved over 100 MW more year to year.

Huge increases of production rates are minefields of quality issues.  Underwriters of long term installations will likely be nervous about the durable (20 years or so) quality of quickly expanding crystalline production, especially with significant amounts of metallurgical feedstock in them.  Underwriters are also just accepting the long term performance of the two primary thin films, cadmium telluride (CdTe) and amorphous silicon (aSi).  Whatever the output of copper indium germanium diselenide (CIGS) or the other new technologies will be, the jury is likely to be out on their long term stability for a while.

One only has to look at the wind power industry to see a slowly declining increase of production due to limitations of skilled labor and materials.  A 40% growth of photovoltaic production will result in almost 5,200 MW in 2008, 7,200 MW in 2009 and just over 10,000 in 2010 and almost 20,000 MW in 2012.  That is a more likely scenario, if one assumes an overdue shakeout in 2009.  Those numbers are nothing to sneeze at.