Over the past decade, the photovoltaic (PV) market has experienced unprecedented growth. In particular in the last year, the photovoltaic market has reached a cumulative installed capacity of roughly 40 GW world-wide, with an annual added capacity of 16.6 GW. The photovoltaic power is well on the way to becoming a fully competitive part of the electricity system in the European Union (EU) and an increasingly important part of the energy mix around the Globe. But much of the progress in recent years has been very heterogeneous, varying from country to country, due to several factors, the most important being different national regulations and incentive schemes as well as varying availability of financing facilities.
We anticipate another doubling of U.S. PV installations in 2011, in part aided by the steep drop in demand during the first quarter in Italy and Germany. In particular, Italian market uncertainty from February through early May brought the market to a virtual standstill, leaving suppliers and distributors with gigawatts of unshipped inventory.
Over the next 10 years, PV system prices could decline by up another 50% in all countries and over all segments according to leading industry outlooks. Based on PV efficiency, economies of scale and the development of mature markets for PV, and the further growth trend in the generation cost of electricity from all power sources, PV is expected to be competitive in what are potentially the five largest EU electricity markets before 2020. Dynamic grid parity could occur as early as 2013 in the commercial segment in Italy and then spread out in Europe to reach all types of installations considered in all the selected countries by 2020 (EPIA, On the Road to Competitiveness, Sept 2011).