Published on July 22nd, 2014 | by Guest Contributor174
The Continuing Exponential Growth Of Global Solar PV Production & Installation
July 22nd, 2014 by Guest Contributor
By Mike Shurtleff
For years, I’ve been following the exponential growth of Global Solar PV production/installation, starting with this article in 2007: “PV production up 50% in 2007,” in which it was stated that solar PV production had “jumped to 3,800 megawatts worldwide in 2007” and was “world’s fastest-growing energy source.” There is a good plot of PV production growth from 1975 to 2007 included. A number of commenters suggested the high rate of growth (48%) seen in the preceding seven years would not be as easy to maintain at higher volumes of production going forward. I was not as sure. I was also not sure they were wrong. I made a resolve to watch this. Now, seven years later, they have not been completely wrong, but pretty dang close to completely wrong.
The Problem with Human Perception of Exponential Growth
In his book “Tipping Point,” Malcolm Gladwell points out human beings do not properly perceive exponential growth. This is the illustrative example he uses:
“Consider, for example, the following puzzle. I give you a large piece of paper, and I ask you to fold it over once, and then take that folded paper and fold it over again, and then again, and again, until you have refolded the original paper 50 times. How tall do you think the final stack is going to be? In answer to that question, most people will fold the sheet in their mind’s eye, and guess that the pile would be as thick as a phone book or, if they’re really courageous, they’ll say that it would be as tall as a refrigerator. But the real answer is that the height of the stack would approximate the distance to the sun. This is an example of what in mathematics is called a geometric progression.”
His point in the book is people do not see exponential growth for what it is. As a result, the “tipping point” in new technologies usually takes them by surprise. His book does not mention the “tipping point” in solar PV production/installation, but the concept certainly applies.
Another illustrative example of exponential growth is found in this article from November 2011: “100GW of demand, and the coming inflection point in the US solar market.”
This article may be the most important one on solar PV on the internet (imho). The author, Richard Keiser, points out that decreasing solar PV costs lead to an exponential increase in demand. A continuing decrease in solar PV cost will reach grid parity over an ever increasing number of areas (i.e., for an exponentially increasing number of customers). He too provides an easier-to-understand illustration of the power of exponential growth:
“Non-linear systems are often difficult to understand. The famous ‘penny game’ is a good example. In this game, a hypothetical person is given one penny (or one euro cent) on the first day, two pennies on the second day, four pennies on the third day, etc., and then asked to guess the total value of the pennies at the end of one month. Very few people guess correctly – US$21 million – or appreciate that 75% of that value is created on the last two days.”
“Like the penny game, the solar industry is characterized by a number of non-linear dynamics.”
The Scientific Evidence
The data for these graphs is taken from different Internet articles. The sources are listed further below.
(This is really one set of data collected over time and plotted over Christmas last year.)
The green line is a calculated exponential growth rate of 48% per year, starting with 3.8 GW in 2007 from the original source article mentioned at the beginning. The blue line is a calculated exponential growth rate of 41% per year, starting with 3.8 GW in 2007. The red line is a plot of the data collected from various Internet sources.
The top two graphs are linear plots. The bottom two graphs are exponential plots of the same data. (Note that the calculated 48% and 41% rate projections appear as straight lines when plotted with an exponential vertical axis …as they should.)
The graphs on the left show the actual data collected from the Internet compared to 48% and 41% rates of growth.
The graphs on the right show a projection of 48% and 41% growth rates out to 2022.
Global Solar PV has been growing exponentially, although it has not followed a well-behaved exponential curve. At this point in time, it has been growing faster 41% per year since that original article in 2007. A growth rate of 41% per year is the same as a doubling of production/installation every two years. Like I said, it did slow down from 48%, but not much.
If a growth rate of over 41% continues until 2022, then the world will be producing/installing over 0.5 terawatts of solar PV panels per year and maybe as much as 1.0 terawatt per year. At this rate, solar PV will become THE major source of power throughout the world. Further, when including any additional growth in production/installation, this will happen in a few years, easily within the next decade. Total global power use is less than 20 terawatts. (This is all of the world’s power use, not just electricity.)
The demonstrated exponential growth has occurred in spite of two detrimental events:
1. In roughly 2007 to 2009, there was an under-supply of purified bulk silicon. This was not a shortage of the raw material silicon. There is plenty of silica sand. It was a manufacturing shortage that has since been remedied… and then some. Silicon solar PV panel manufactures learned to produce panels using less silicon. Purified bulk silicon producers scaled up their production and have also dramatically reduced their production costs. Lower-cost purified silicon, and PV panels using less of it, have since resulted in much lower-cost silicon PV panels.
2. More recently, starting in roughly 2011, there was a global economic collapse. (We are still feeling the effects.) This had the secondary effect of causing many countries to reduce their solar incentives. (Germany, Italy, and Spain in particular have scaled back their incentives and reduced their solar growth rate dramatically.)
You can see the respective dips in production/installation during the two pull-back periods mentioned. It would be hard to over-
emphasize the fact that solar PV has continued to maintain a high overall growth rate right through these two hard hits. It is now widely recognized that solar PV is entering a new phase of high-rate growth, an over-demand market. There should be no mistaking of solar PV as other than an unstoppable disruptive technology. Opposition by fossil fuel companies and some utilities will not be successful.
(Note: I’m lumping production and installation together. Initially production was pretty much the same as installation. More recently, during the period of solar PV over-production, this was not the case and I started to see numbers of global solar PV installation instead of production. I’m using them somewhat interchangeably to represent global solar PV growth.)
For the last 14 years, almost a decade and a half, global solar PV production/installation has grown faster than 41% per year (compound annual growth rate, aka CAGR). This means global solar PV production/installation has been more than doubling every two years. (I’m using predictions for 2014, but we are on track.) Predictions for 2015 already suggest a continued high rate of growth. Most predictions going forward beyond 2015 will continue to be of linear growth, as has been the case in the past. This is because humans have a psychological blind spot with respect to exponential growth. I submit this may not be the case at all. Global solar PV growth will eventually flatten out, but don’t bet on this happening in the near future.
If this high growth rate continues for another 8 years, till 2022, then we will be already well on our way to providing most of the world’s power using solar PV.
The next time you ponder the growth rate of solar PV, consider the plots above…. Consider the continuing drop in cost…. Consider the resulting exponential increase in demand. Think about the multi-gigawatt production plans of some of the big solar PV manufactures. Will it really take 50 years for solar PV to provide most of our power?… Or will those plots above continue, so that it will only take 10 to 20 years? Think about it.
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