A look at the global solar power market shows us that electricity-generated solar power includes technologies such as photovoltaic (PV) and concentrating solar power (CSP). The main difference between these two technologies is that PV uses solar cells or solar photovoltaic arrays to convert light from the sun in a direct manner to generate electricity, whereas CSP systems use a heat-transfer fluid or a gas to generate a turbine or an engine to produce electricity.

Solar PV systems have, over the last 50 years, evolved into a mature, sustainable, and adaptive technology. PV technology is improving as solar cells increase in efficiency, with the modules having a better aesthetic appearance. As a result, solar power is gaining more acceptance and becoming an increasingly cost-effective and clean alternative to the conventional energy sources.

The solar PV industry has experienced an increase in customer demand. PV systems installation reached 14,730MW of Photovoltaic installed capacity in 2008.

The use of CSP technologies in North America can only be justified in places where the highest efficiencies are obtainable. Low cloud coverage, high solar density, and the availability of inexpensive desert land make these regions most suitable for the establishment of thermal solar power plants. Energy generators are mainly interested in using the technology as compliments to the existing plants, to supplement peak electricity supply and meet their renewable portfolio standards (RPS) requirements in the most cost-effective way.

It is expected that the solar market will be driven by government incentives and subsides, increasing oil imports and volatility of oil prices, and technological improvements and advances in efficiencies. Besides the continued growth that the market has experienced in the last years, and the bright future that this technology features, there are some challenges that manufacturers must overcome in the short and medium term, such as the lack of local transmission infrastructure capabilities, technical efficiency constraints, and higher capital costs than conventional power plants.

CSP Segment Forecast

• There were 490MW of CSP installed in the world in 2008. The technology with the higher base is Trough technology, which accounts for 95.7% or 469MW during the base year.
• The global CSP market is expected to continue growing during the forecast period at a CAGR of 88% from 2008 to 2010, reaching 1,732MW in 2010.
• Spain and the United States were the main markets for CSP installations in 2009, with 62.3% and 37% respectively.
• It is expected that these two countries will continue to lead CSP project development activity during the forecast period due to a combination of resource and policy support.
• Other countries, such as Greece and Italy, are projected to show a significant increase in their market share during the next five years.
• PV SEGMENT FORECAST
• There were 14,730MW of solar PV installed globally in 2008.
• The global PV market is expected to continue growing during the forecast period at a CAGR of 36.5% from 2008 to 2010, reaching 27,440MW in 2010.
• The first generation of PV cells has experienced the highest increase in production volume, as manufacturers have scaled up well-defined manufacturing technologies.
• The second generation of PV cells are expected to gain market share during the next five years mostly due to their lower cost and the ability to be used in building integrated applications.
• The third generation of PV cells envisions a bright future due to their lower cost. However, these are still in the R&D stage.
• CPV technologies have developed the fastest commercially although it remained in latency for the last two decades.

Global Wind Power Market
The global wind power market has experienced tremendous growth during the last three years because of the increasing government concerns about energy security and independence. In addition, other factors such as the rising energy prices, volatility of fuel costs, and government incentives on renewable energy have contributed to the acceleration of market growth.

In 2008, the global wind power industry faced restraints such as component shortage and increasing price of wind turbine generators (WTG). Moreover, at the end of the year, financing for new projects and new orders for turbines and components slowed, as the financial crisis began to hit the wind sector.

These restraints are expected to reduce their impact during the forecast period, as it is projected that the reduction in commodity prices will reduce the cost of WTG. Additionally, the decline in industry growth is projected to ensure that quality components, materials and services are delivered on time, thereby strengthening the supply chain. As a result, the average price of WTG is expected to decrease over the forecast period.

Forecast Highlights:
Wind power, with government handholding and financial incentives, is on its way to becoming the renewable energy source that is currently most competitive with other forms of conventional energy. By the end of 2008, there was about 121,287MW of wind power installed capacity in the world.

The majority of this capacity was installed in the European region, which represented more than 50% of the total market in 2008. Offshore installations represented only 1.1% of the total market. The United States was also the world’s largest market in terms of new installations with 8,545MW added in 2008. The global wind power market is expected to increase during the forecast period at a CAGR of 22.6% from 2008 to 2010, reaching 182,374MW in 2010. Although the current recession is expected to curtail electricity demand in the short term of the forecast period, as the global economy recovers to its past levels, growth in wind power demand is likely to return to trend at the end of 2010.

All the regions are expected to experience higher growth during the forecast period, though some are projected to grow more than others. The North American and Asia Pacific regions are projected to become the main locations for new wind power installation, increasing their share of the market above that of Europe in the next five years.

Furthermore, growth in offshore wind farms is expected to increase beyond 2008 with new projects in Europe, Asia Pacific, and North America starting during the next seven years. The total offshore installed capacity is projected to represent about 4.1% of the total global wind market by 2015.

Frost & Sullivan
Mountainview, CA
frost.com