Clean Power

Published on April 7th, 2015 | by Giles Parkinson

18

Solar PV Already Impacting Business Models Of Utilities Around The World

April 7th, 2015 by  

Originally published on RenewEconomy. (Editor’s Note: click on any of the images to see a much larger and clearer version.)

Here is an interesting fact: Solar PV is already upturning the business models of utilities around the world, yet right now it contributes just 1 per cent of global electricity demand. Imagine what its impact will be when it grows another tenfold in the coming decade.

In 2014, according to the International Energy Agency Photovoltaic Power System Programme (IEA PVPS) new document  Snapshot of Global PV Markets 2014, a total of 38.7GW of global PV capacity was added in 2014, just above 2013, as a steep decline in Europe was offset by sharp gains in Asia.

This took total capacity to 177GW, a tenfold increase since 2008. This total is expected to grow by nearly one-third in 2015.

In the coming decades, solar PV is forecast to make an even greater impact. Last year, the IEA updated its forecast to suggest that solar PV’s share of global electricity will reach 16 per cent by 2050, with around 4,600GW of installed PV capacity.

Even so, the IEA is still regarded as highly conservative on solar’s potential. Deutsche Bank expects solar to become a $5 trillion market by 2030, when its share of the global electricity market will have risen more than 10-fold as fossil fuels struggle to compete, particularly in new generation.

According to the latest data, already 19 countries around the world, including Australia, source more than 1 per cent of their electricity needs from solar PV.

In the first established markets in Europe, the totals reach more than 7 per cent in countries like Germany, Greece and Italy. Another nine countries, including Australia and Japan, source more than 2 per cent of their electricity needs from solar PV.

Theoretical PV Production

Australia ranks in the top 10 markets for solar PV – both in installations in 2014, and for cumulative totals. What distinguishes Australia is that its market is almost totally rooftop solar – on households and businesses – while other major markets are more focused on large-scale solar.

China, Japan and the US dominate the market now, while Germany still leads on total capacity – although it could be overtaken by China in 2015, which has set a target of 17GW of new solar PV for the year.

top 10 solar countries

This next graph seeks to illustrate the changing focus of global solar PV markets – Europe to Asia and the Americas. Asia accounted for nearly two-thirds of installations in 2014 and is expected to dominate again in 2015.

But a series of new markets are also emerging. The UK, France and Netherlands are still growing in Europe, even though the PV market in some countries has almost completely shut down.

The US market continues to grow, and reached 6.2GW in 2014. Canada and, to a lesser extent, Mexico are also progressing, and Chile has installed close to 400MW, becoming de facto the first PV country in South America. Brazil and Peru are following in its footsteps.

Regional PV Installations

Reprinted with permission.


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About the Author

is the founding editor of RenewEconomy.com.au, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.



  • eveee

    Its a strange thing. If the utilities want to save their necks, they will have to lower rates. Since TOU rates are highest when rooftop PV solar is active, their policy is helping their own demise. With high rates, there is every incentive to install rooftop PV and efficiency. There is no stopping that.

  • Great to hear!

  • mikgigs

    somebody should improve requirements of publication. Those copy-pasted plots are awful. BTW, it is not very good practice to use plots of somebody. If you want to make a comment, do it hourself.

    • Reposted image requirements just updated.

      And I updated these too. Click on them to see even better/larger versions.

  • jburt56

    Could be as much as 5 TWp / year installed by 2050.

  • Will E

    quote—Fossil Fuels struggle to compete, particularly in new generation—- Fact is , they can not compete.
    And it will not be a 10- fold increase,
    It will be a 1–2–4–8–16–32-fold increase of renewables world wide.
    I say Solar is not only impacting utility business,
    Solar is disrupting, happening now.

  • Hans

    How is “utility” defined here? Traditionally, a utility was a vertically integrated electricity monopoly, that generated and distributed electrical power. In many countries and even in some U.S. states utilities do not exist in that form any more. For example in Germany renewables are a threat to the conventional power generation industry, but not to the company operating the grid.

    I agree with GCO that the title does not cover the content of the article, and even then it uses a concept that does not exist anymore in the described countries.

  • GCO

    I read the article twice, and still have no idea how those pretty numbers and catastrophically fuzzy unreadable graphics demonstrate that the utilities business model has been “upturned”. Can someone enlighten me?

    Plus (and that too isn’t clear from the article), isn’t the bulk of this solar capacity installed by utilities in the first place anyway?

    • Hans

      I agree with your first point the article only says: PV is growing fast. Hardly new information for CT readers.

      Regarding your second point: depends on where you are. In Europe PV systems and wind turbines have been built mostly by citizens, co-operations and private investors.

      • On 1: I’ve updated the images by getting screenshots straight from the report. Click on them to see them much bigger & very clear.

        • Bob_Wallace

          I think the problem might be that Giles is using jpg images.

          I see a lot of sites using gif formats

          “JPG does not work well on line drawings, lettering or simple graphics because there is not a lot of the image that can be thrown out in the lossy process, so the image loses clarity and sharpness.”

          ” GIF is better than JPG for images with only a few distinct colors, such as line drawings, black and white images and small text that is only a fewpixels high.”

          http://www.webopedia.com/DidYouKnow/Internet/JPG_GIF_PNG.asp

          • nakedChimp

            should be starting to use SVG for this..

          • As long as the image is sharp enough, jpg is fine. My guess is the screenshots are taken at a small size and then the images don’t expand well.

    • mike_dyke

      As I understand it, before Solar PV came along, the business model of utilities was something like “we’ve (the utilities) have got the monopoly on power generation and distribution so there’s going to be no extra competition. That’s going to continue and so we will need to replace our generators in 10-20 years with new/better ones.” With Solar PV, it’s now all changed – There is a lot of extra competition (New utilities and lots of households are generating their own power) and instead of 10-20 years, new (more efficient/cheaper) generators are coming to market in months.

      The word “upturned” I think means “Turned on it’s head” which really describes the utilities problem – They aren’t geared up to changing their business every few months.

      There’s two sorts of PV generation – utility scale which are the big arrays of panels in the fields and residential scale which are the one’s on people’s roofs. It’s the residential ones that are causing the most headaches as the utilities haven’t had to deal with lots of little competitors before as there’s only been big power stations before Solar etc came along.

      People are waking up to the fact that they can get cheaper electricity for a very small outlay by installing panels on their roof and the utilities can’t do much about it. Bad news for the utilities.

    • Matt

      Yes poor graphics and article, with no support for the headline. Germany has been impacted, seeing impact in California also; but no information here to see that.
      On you second point, a lot depends on the policies in that location. In the US the policies are set up to promote large scale solar, so DG has been slower to pick up. In places like Australia (as mention above) is mostly rooftop (DG). Then you get places like Germany where government is trying to slow growth.

      • Just FYI: I’ve updated the images by getting screenshots straight from the report. Click on them to see them much bigger & very clear.

    • I’ve updated the images by getting screenshots straight from the report. Click on them to see them much bigger & very clear.

  • Shiggity

    Many older managers aren’t trained to deal with exponential trends. Future business models across all realms will start showing these exponential curves. It’s pretty scary stuff if you’re unwilling to accept the truth or don’t know how to analyze this data on your own.

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