Towards an Effective European Industrial Policy for Photovoltaics 20 th EPIA AGM - May 2004 - Athens Dr. Winfried Hoffmann Chairman of the Management Board of RWE SCHOTT Solar GmbH, Member of the Board of the German Solar Industry Association (BSi)

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Towards an Effective European Industrial Policy
for Photovoltaics 20 th EPIA AGM - May 2004 -
AthensDr. Winfried HoffmannChairman of the
Management Board of RWE SCHOTT Solar GmbH,Member
of the Board of the German Solar Industry
Association (BSi) andof the European
Photovoltaic Industry Association (EPIA) RWE
SCHOTT Solar GmbH Carl-Zeiss-Strasse 4 63755
Alzenau, GermanyPhone 49 (0)6023 91-1710
Fax [phone] email
winfried.hoffmann_at_rweschottsolar.com
www.rweschottsolar.com
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The PV Solar Electricity Jigsaw Puzzle
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World PV market size and application
segmentation
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4
Main terrestrial solar electricity market
segments
Consumer
Off-Grid Industrial
Economically viable
On-Grid
Off-Grid Residential
Dependant on market support programs
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PV Competitiveness
Electricity Generating Cost for PV and
utility prices
Photovoltaics Utility peak power Bulk power
Source RWE Energie AG and RSS GmbH
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Daily profile of solar energy production and
energy consumption of an office building
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Electricity Prices in 2000 in Depending on Bulk-
and Peak Power in Victoria, Australia
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Spot market prices in correlation with PV
electricity generation in Germany
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Correlation of overnight stays in Greece (62
million in 2000) with solar input in kWh/m²
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Statistics for 14 million tourists in 2002
Energy per overnight stay 15 60 kWh mean
value ca. 30 kWh Energy Cost 1 4,5
/overnight stay equal to 7 10 ct/kWh Energy
need for typical 24 kWh total overnight stay at
a hotel 69 16 kWh electricity (3,5 kWh
thereof air conditioning)
Data taken from a study by the German-Greek
industry and trade organization Within a project
from the German Ministry of Commerce (BMWA)
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Market growth projection until 2030 and
necessary investments
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Production of Solar Modules using different
Technologies
GW
MW
25p.a.
30p.a.
2010 (Forecast) Jp 1.200 EU 1.000 US 500 SOA
500 ROW 500 ? 3.700
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Market Size in 2030 for the four market segments
Off-Grid Industrial 70 GWp p.a.
Consumer 20 GWp p.a.
Total 300 GWp ? 200 bio Modul Turnover in
2030

• Rural Electrification
• 60 GWp p.a.

• On-Grid
• 150 GWp p.a.

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Price Experience Curve for PV Modules
History
Forecast
20 price decrease by doubling cumulative volume
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Historical Market Growth of the Solar Electricity
Industry by region
Source PV News Strategies Unlimited
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"Market-Pull" in Japan for PV solar electricity

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Example 100,000 Rooftop program / Feed in tariff
(EEG) in Germany
140
Feed-in Law
120
100
80
1,000-Rooftop program (2.500 x 3kW)
100,000 Rooftop program KfW
yearly installed MWp
60
40
20
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
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PV Cell and Module Production Companies
Worldwide
Top Five gt 50MW/a
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Japanese Industrial Advantages

• The interest rates for investments are extremely
  low in Japan.
• The Japanese domestic market has been set at 4.8
  GWp for 2010.
• Economies of scale are already better in Japan
  (e.g. less investment for purchasing equipment,
  lower prices for materials, etc.).
• R D budget is planned constantly on the rise
  and priority is given to the needs of industry.
• The Japanese market is such that more than 95
  of the installed capacity is made by Japanese
  industry due to non-technological barriers.
• The rate of exchange of the Euro versus the
  Dollar and the Yen.

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EPIA Proposal towards an effective European
Industrial policy

• A stable and growing R D policy in the short,
  medium and long-term.
• A sustainable programme for supporting the
  European market and exports.
• Accompanying measures to facilitate European and
  then international normalization and
  standardization, introduction of photovoltaics as
  a component in the building industry, the
  creation of new financial products for these
  projects, promotion and awareness of solar
  energy, etc.

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A sustainable program for supporting the European
market

• Support systems which are ineffective
• Stop-and-go market support programs as obtained
  by investment subsidy programs and tendering
  systems financed by public money
• Quota systems if not specifically differentiated
  between the various renewable energy
  technologies
• The support system which is most effective
• Feed-in tariff payment of delivered kWh from PV
  systems depending on location and system size.
• Decrease of the feed-in tariff by 3 p.a.
• Advantages of the feed-in tariff system
• Focus of customers will be on product quality and
  performance of the systems for a long period of
  time (e.g. 20 years)
• Investors confidence secured
• (Approximately 60 cents/kWh, assuming 1000 sun
  hours, 20 years payment and a typical private
  roof-top system size of 10 kWp)
• (corresponds to about 5 if inflation is taken
  into account)

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Feed-in tariff in Greece

• should by itself allow a competitive investment
• additional supports, e.g. investment subsidy,
  should take any additional bureaucracy
• should not exceed a 10 interest rate on
  invested capital within feed-in tariff period
• total cost not from government budgets but
  dispersed to all electricity customers
• compensation for different output power for the
  same system size in different EU locations
  (insolation dependent feed-in tariff)

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Comparison of the future market development in
Europe and Japan
Additional EU-installations e.g. EU-wide feed-in
tarriff program (not contained in accumulated
curve)
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Market potential until 2010 (2015) assuming a
quick introduction of an EU-wide feed-in tariff
system
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EPIA Proposal towards an effective European
Industrial policy

• A stable and growing R D policy in the short,
  medium and long-term.
• A sustainable programme for supporting the
  European market and exports.
• Accompanying measures to facilitate European and
  then international normalization and
  standardization, introduction of photovoltaics as
  a component in the building industry, the
  creation of new financial products for these
  projects, promotion and awareness of solar
  energy, etc.