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WEResources Solar 2016
WEResources Solar 2016
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Solar | 2016
1
TABLE OF CONTENTS
KEY FINDINGS 2
INTRODUCTION 3
Focus area & rationale 3
Global trends 3
Resource potential 6
1. TECHNOLOGIES 10
Current technologies 10
Efficiencies and physical constraints 14
Technological advancements 16
3. SOCIO-ECONOMICS 38
Government policies 38
Socio-economic impacts 45
4. ENVIRONMENTAL IMPACTS 49
Land use 49
Water usage 49
Hazardous materials 50
Life-cycle emissions 51
Other impacts 52
5. OUTLOOK 54
Challenges 54
Opportunities 58
6. GLOBAL TABLE 62
1
Japan building world's largest India investing $1.8 billion on
floating solar power plant lines to transmit solar power
Four-junction solar Saudi Arabia eyes mega Solar plane makes history
cell claims efficiency solar energy project in after completing round-
record Turkey the-world trip
Solar
World’s largest solar power plant World's first solar panel road opens
online in United Arab Emirates in Normandy village
KEY FINDINGS
1. Global installed capacity for solar-powered electricity has seen an exponential growth,
reaching around 227 GWe at the end of 2015. It produced 1% of all electricity used
globally.
2. Germany has led PV capacity installations over last decade and continues as a leader
followed by China, Japan, Italy and the United States.
3. Major solar installation has been in regions with relatively less solar resources (Europe
and China) while potential in high resource regions (Africa and Middle East) remains
untapped.
4. Government policies have contributed to the development of the most mature solar
markets (Europe, United States and Australia).
5. Costs for solar power are falling rapidly – “grid parity” has been achieved in many
countries, while new markets for the solar industry are opening in emerging and
developing nations. Policy and regulatory incentives, oversupply of installation
components, and advancements in technology are driving down the reduction in cost.
6. Government incentives for the solar energy sector are being gradually scaled back in
mature solar markets. There is now a need for a new electricity market design and for
novel methods of financing solar projects in the absence of government support.
While there has been continuous improvement in the conversion efficiency of PV cells,
concentrated photovoltaics (CPV) may hold the key in enabling rapid increases in solar
energy efficiency, with recent progress reaching 46% for solar cells.
9. In order to prevent environmental damage from solar PV, there is a need for strict and
consistent regulation on processes over the entire life-cycle of infrastructure. Disposal
and recycling must be considered as more modules reach the end of their lifespan.
1
Perovskite cells include perovskite (crystal) structured compounds that are simple to manufacture and are
expected to be relatively inexpensive to produce. They have experienced a steep rate of efficiency
improvement in laboratories over the past few years.
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INTRODUCTION
Focus Area & Rationale
Investments in solar PV capacities are now rapidly growing in both grid connected and off-
grid mode. Solar generation has been a reliable source for supplying electricity in regions
without access to the grid for long. However, the penetration of solar energy as a grid
connected power source has increased significantly only in the last decade. Thus the
overall share in net energy generation still remains low at only 1% (2015) globally and is
bound to only increase in future.
Costs of energy production are continually falling, technology is improving and a diverse
and growing range of applications are open to the solar energy sector. Hence, solar energy
is going to be a competitive energy or power source in future with huge investments being
drawn into this segment. Competitiveness can be a challenge where energy storage is
required to address the demand, as energy storage technologies are a little behind in
learning curve, and commercial acceptability is yet to be achieved. Though, there are many
locations where grid peak is experienced during solar generation hours (day time), so
broadly, solar power is currently very competitive.
GLOBAL TRENDS
PV is mainstream technology. Global installed capacity for solar-powered electricity
reached around 227 GWe at the end of 20152, while total capacity for solar heating and
cooling in operation in 2014 was estimated at 406 GWth3. Photovoltaic (PV) has been the
mainstream solar power technology as shown in Figure 1 below.
5000 250000
4000 200000
Solar PV
3000 150000
CSP
2000 100000
1000 50000
0 0
2
IRENA, 2016
3
IEA solar heating and cooling programme (2015)
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China is a leader in PV installations, followed by the USA, Japan, Germany and Italy as
shown in Figure 2 below.
China
23%
Rest of World
30%
USA
14%
Concentrated Solar Power (CSP) remains with very limited capacity (4 GW today and 70 to
256 GW in 2040 according to the IEA scenarios), i.e. less than 3% of global capacity. As
shown in Figure 3, Spain is the leader in CSP deployment with 2,362 MW installed capacity
in 2016, followed by USA with 1,804 MW, India 454 MW and all other countries have a
small contribution to the total capacity installed across the globe. According to the Climate
Investment Fund, the largest CSP project in the world until January 2016 is Noor in
Morocco and global operational power stands at 4,705 MW.
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Spain 2,362
India 454
Chile 220
China 204
Morocco 183
UAE 100
Australia 48
Algeria 25
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RESOURCE POTENTIAL
One of the most important factors in solar energy technologies’ applications is the amount
of solar energy incident at a location. The amount of solar energy incident per unit area per
unit time is referred to as irradiance (measured in kWh/m2 per day or kWh/m2 per year) and
is the most suitable criteria in the assessment of the solar resource at a geographical
location. Solar radiation consists of a direct (direct beam radiation) and a diffuse
component. For the purposes of different types of applications, solar radiation data is given
as Global Horizontal Irradiance (GHI) and Direct Normal Irradiance (DNI). The various
components of solar radiation are illustrated on Figure 5.
Source: http://rredc.nrel.gov/solar/glossary/gloss_g.html
Some of the solar radiation entering the earth's atmosphere is absorbed and scattered.
Direct beam radiation comes in a direct line from the sun. Diffuse radiation is scattered out
of the direct beam by molecules, aerosols, and clouds. The sum of the direct beam, diffuse,
and ground and surroundings reflected radiation arriving at the surface is called total or
global solar radiation.
GHI is the total amount of solar energy incident on a horizontal surface. DNI is the amount
of radiation incident on a surface that is always kept perpendicular (normal) to the direct
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solar beam. Part of the solar radiation that arrives on a horizontal surface, called diffuse
horizontal irradiance (DHI), is due to scattering of sunlight in the atmosphere and reaches
the horizontal surface from all directions of the sky. These three quantities are related via
the expression𝐺𝐻𝐼 = 𝐷𝑁𝐼𝑐𝑜𝑠𝑍 + 𝐷𝐻𝐼, where Z is the sun zenith angle. GHI is the important
parameter for photovoltaic applications (PV), while DNI is the most important parameter for
CSP plants and Concentrating Photovoltaic (CPV) plants. The amount of GHI and DNI vary
due to variation in geographical location and due to local climate effects. Table 1 provides
ranges of the solar resource data for the WEC geographical regions.
It is to be noted that all solar technologies can use trackers to increase the overall output.
Trackers are mechanical parts that facilitate solar modules to track sun. Tracking could be
for over a day only or can also include seasonal tracking.
Middle East & North 1700 – more than 2700; 1100 – 2800;
Africa
Lowest: Caspian region of Iran Lowest: Caspian region of Iran
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Source: SolarGIS
Source: SolarGIS
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1. TECHNOLOGIES
CURRENT TECHNOLOGIES
The solar PV market is currently dominated by crystalline silicon (c-Si) technology, of which
two types are used. The first is monocrystalline, produced by slicing wafers (up to 150 mm
diameter and 200 microns thick) from a high-purity single crystal boule. The second is
polycrystalline, made by sawing a cast block of silicon first into bars, and then into wafers.
The main trend in crystalline silicon cell manufacturing involves a move toward
polycrystalline technology. However, it may be noted that PV manufacturers are reducing
the price for producing monocrystalline, which might get close to the current price for
polycrystalline and be much more competitive in the future.
Aside from crystalline silicon cells, other PV cell technologies including amorphous silicon
(a-Si), thin-film and organic cells are commercially available. Amorphous silicon solar cells
require only 1% of the material (the silicon) needed for the production of crystalline silicon
cells. It can be grown in any shape or size, and can be produced in an economical way.
Amorphous silicon cells were the first type of solar cells to be used in the application of
consumer products such as watches, calculators and other non-critical outdoor
applications; and given their low cost, they have been adopted by other larger scale
applications.
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Source:http://www.sustainabilityoutlook.in/
In case of organic solar cells, there are several different technologies, including dye-
sensitized solar cells, antenna cells, molecular organic solar cells and completely polymeric
devices. The dye cell is closest to market introduction, while the other possible organic
solar cell concepts are still being researched.
In case of solar PV systems, the solar energy is directly converted into electrical energy
limiting PV to work only in daylight unless it is integrated with battery system for storage.
However, solar thermal technologies, with a medium for thermal storage, can operate
through the day, making it attractive for large-scale energy production. Heat can be stored
during the daytime and excess daytime heat can potentially be stored and converted to
electricity when required. Work is in progress towards development of such thermal plants,
which will improve storage capacities to optimise the economics and the dispatch-ability of
solar electricity.
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TVP solar, applications such as water and space heating, and swimming pools; where the
loss of heat will not be as significant as with higher temperature panels. Figure 9 shows a
typical picture of these types of solar thermal systems.
There are mainly four different types of high temperature solar thermal systems as
described below. Figure 10 depicts the various technologies.
4
IRENA 2013, Concentrating solar power technology brief
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almost all parabolic trough systems, synthetic oil is used as the heat transfer fluid
(HTF) to generate superheated steam.
Linear Fresnel reflector: The reflectors are similar to parabolic trough reflectors, but
are flat (or slightly curved) and configured to reflect sunlight onto a receiver tube
suspended above the mirrors. The compact linear Fresnel reflector (CLFR) uses two
parallel receivers for each row of mirrors and thus needs less land than parabolic
troughs per unit output energy. However, due to less efficiency of such type of
reflectors it is costly to enhance the storage capacity.
Parabolic dish: Solar radiation is concentrated to a focal point at centre of the dish.
Most dishes have an independent engine/generator (such as a Stirling machine or a
micro-turbine) at their focal points. This design eliminates the need for a heat transfer
fluid and for cooling water. Each dish produces electricity independently, with
capacities limited to tens of kW or less.
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Photovoltaic (PV)
The major concern about photovoltaic technologies is the efficiency, life and performance
with time. Commercial PV modules convert less than 20% of the solar energy incident on
them to electricity. The efficiencies of PV panels also have a temperature coefficient, and
generally degrade with rising temperature. Figure 11 shows the reported efficiencies of
current best-performing commercial PV modules. Monocrystalline solar panels have the
highest efficiency rates, typically 17-21%.
Monocrystalline solar panels are the most efficient commercially available modules, and
have the longest life. They are also the most expensive to produce, since four sides of the
silicon ingots are cut off to make high-purity silicon wafers. A significant amount of the
original silicon ends up as waste.
On the other hand, polycrystalline and thin-film solar modules are economical with little less
efficiency (14-16% for polycrystalline, 13-15% for thin-film). From a financial standpoint, a
solar panel that is made of polycrystalline silicon (and in some cases thin-film) can be a
better choice for several applications. The process used to make polycrystalline silicon is
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simpler and hence economical since amount of waste silicon is less compared to
monocrystalline. Mass production costs of thin-film modules are lower than for crystalline
silicon modules, and also have a higher heat tolerance.
At research level, efficiencies of the best-performing solar PV cells are fast approaching
50%, utilising new technologies including multi-junction cell configurations and
concentrated photovoltaics. Figure 12 shows the trend in maximum achieved efficiencies of
different solar PV cell technologies, from 1975 to the present day.
Solar Thermal
The variation in CSP technologies comes in terms of their optical design, shape of receiver,
nature of the transfer fluid and capability to store heat. On the other hand, tower technology
ranks second only to parabolic dishes with respect to concentration ratio and theoretical
efficiency, and offers the largest prospects for future cost reductions. Broadly, the efficiency
of such types of systems varies between 70-80%.
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With regards to solar heating, the efficiencies of solar collectors can be improved by making
them spectrally selective. A spectrally selective surface has maximum absorption for short
wavelength solar radiation (0.3 – 2.5µm) and minimum emission for long wavelength
thermal radiation (3.0 – 30.0µm).
TECHNOLOGICAL ADVANCEMENTS
Very low capital intensity (< EUR 0.25 per Wp per year within 2025)
Long module lifetime (> 35 years) and low degradation (< 0.3%/year)
With the solar PV industry currently heavily dependent on silicon, research has gone into
the development of solar cells from new materials. In addition to thin-film and organic solar
cells, compounds such as perovskite are being used in developing the next generation of
solar PV cells. Efficiencies of perovskite cells have jumped from 3.8% in 2011 to over 20%
by 2014. While perovskite solar cell technology is yet to be consolidated for commercial
modules, cells can be very cheap as they are made from relatively abundant elements such
as ammonia, iodine and lead. However, there are severe doubts in terms of environment
safeguarding over the use of lead. Moreover, perovskite5 cells are unstable and deteriorate
significantly when exposed to the environment. Therefore, the replacement of lead with a
more environment friendly element and the improvement of stability will be important
objectives for the researchers in this field.
Recently promising approaches combining perovskites and silicon based solar PV cells
have been proposed to raise the conversion efficiency above the theoretical limit of the
conventional solar cell6. High bandgap perovskite PV cells capture blue and green light and
are transparent to red and infrared light which can be efficiently absorbed by silicon cells.
Developing a tandem solar cell with correct matching of the top perovskite and bottom
silicon cell is expected to increase the conversion efficiency of the solar cells well beyond
25%, while keeping manufacturing costs low.
6
Mailoa et al., (2015)
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Many other new materials and promising methods of fabrication are under development.
Among new materials, graphene could be a successful implementation of future low cost
solar cells, with the possibility of developing high efficiency solar cells on flexible plastic
substrates. However, so far, despite the promising characteristics of the material, it has
been difficult to obtain solar cells with adequate efficiencies and stability. New methods
include fabricating large area thin-film PV cells from high efficiency III-V compounds such
as Indium Phosphide (InP), by using low cost vapour-liquid-solid (VLS) growth of thin-films
on metal foils7.
Nevertheless, it is worthwhile to point out that efficiencies of silicon solar cells also continue
to improve. This has been mainly achieved by developing new cell architectures that
minimise light shadowing, such as back contact cells, or by implementing new contact and
hetero-junction schemes. Today, due to very tough competition to the economy of scale
and partly to global production overcapacity, silicon based solar cells with efficiencies of
20% are available at much lower prices than a few years ago. As matter of fact,
manufacturing costs of higher efficiency silicon PV modules are quite competitive with
those of thin-film PV modules, and it is highly likely that the Si based technology will
continue to dominate the market in the next five years. This will be especially true if new
fabrication techniques are able to process crystalline silicon wafers with highly reduced
thickness (below 50µm), thus strongly reducing manufacturing costs.
In such a timeframe, it will be vital to develop innovative, high efficiency solar cells with
improved thermal stability (low temperature degradation ratio), longer PV module lifetime
and the characteristics of capturing grazing angle and diffused light. Bifacial solar cells will
also be an interesting development because of the possibility of raising the energy gain by
capturing the light from the rear side of the solar cell.
Concentrated PV
While there has been continuous improvement in the efficiencies of PV cells, concentrated
photovoltaics (CPV) may hold the key in enabling rapid increases in solar energy efficiency.
CPV involves the use of optics to concentrate incident solar energy on PV cells, hence
reducing the area of high-efficiency cell required. Concentrating optics used include Fresnel
lenses and mirrors. CPV also employs tracking systems to ensure maximum solar
incidence on the panels at all times. CPV technology is best served in areas with DNI
exceeding 2000 kWh/m2 per year. There are two classes of CPV, based on the level of
concentration used, as shown in Table 2.
7
Kapadia, R. et al., 2013
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As the bulk of the cost of solar PV comes from the manufacturing of the semiconductor
cells, CPV could drive further reductions in cost in the long term. The technology is already
cost-competitive with concentrated solar power in certain sunny areas. Recent progress in
CPV has seen record efficiencies reach 46% for solar cells and 36.7% for modules in
laboratory conditions. CPV has also moved into the commercial space, as a provider of
utility-scale electricity. Efficiencies for commercially available CPV modules currently
exceed 30%8. In addition to higher efficiencies, CPV technologies have lower temperature
coefficients than flat-plate PV and could theoretically be scaled up to the GW range.
The CPV market is still very young and small in size, limited to locations with favourable
conditions such as China, United States, South Africa, Italy and Spain. The global market
since the mid-2000s has also been marked by specialist companies going out of business
and scrapped projects. Global CPV capacity in 2014 stood at 330 MWp. The world’s largest
CPV plant at Golmud, China has a capacity of 80 MWp, and came online in 20139.
Solar Fuels
There has been much research on the development of ‘solar fuels’ – where fuel is created
from sunlight, water and air (with the aid of a catalyst). This is described as ‘artificial
photosynthesis’, as it is akin to the natural process evident in plant life. The most common
practice of artificial photosynthesis involves the use of sunlight to split water molecules to
create hydrogen fuel. Current solar-to-fuel efficiencies are on average about 7%; this
compares favourably to natural photosynthesis, which has an efficiency of 0.5-2.0%.
However, researchers from Germany and the United States have achieved efficiencies of
14%10. In addition, newer research into solar fuels has identified another method of artificial
8
Fraunhofer ISE, NREL (2015) – Current status of concentrator photovoltaic (CPV) technology
9
http://cpvconsortium.org/projects
10
May et al. (2015)
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photosynthesis, where solar energy breaks carbon dioxide into synthesis gas (which
comprises of carbon monoxide and hydrogen), which in turn can be used to create
hydrocarbons. Efficiencies of this method are estimated at 18%. Hythane, a blend of
hydrogen and methane, can also be created at an efficiency of 20%11.
New Applications
With advancements in solar technology, the range of potential applications of solar power
widens further. The combination of perovskite and graphene to produce semi-transparent
panels could lead to high-efficiency solar windows. Utility-scale solar is already providing
water desalination services in the Middle East, and in Oman solar energy is utilised to
recover oil from the country’s reserves, as the case study below shows.
Solar panels are being built and deployed in ingenious manners, on freshwater dams and
lakes, in order to save land and in some cases water. For example, the 13.7 MW Yamakura
solar power station in Japan will employ 51,000 solar modules built on the freshwater dam,
which will save agricultural land and reduce water evaporation. A similar concept is being
developed in India at a much smaller scale. The project consists of covering a 750 metre
stretch water canal (from the total 85,000 km) in the province of Gujarat with solar panels
that will generate 1 MW of electricity. The project has great potential for expansion given
the long size of the canal, so if only 10% would be covered with solar panels the generating
capabilities would be around 2,200 MW. Using the canals to produce this much energy
would save 11,000 acres of land and would eliminate the loss of millions of litres of water
per year.
To produce the steam for EOR, oil companies burn an enormous amount of
gas—a valuable resource that is in short supply in many oil-producing regions.
Solar-powered EOR replaces burning natural gas with concentrated solar power.
Solar energy can provide a significant amount of an oilfield’s steam needs,
significantly reducing the amount of gas consumed. To maintain steam injection
around the clock, solar steam is injected during the day, and steam produced by
burning natural gas is injected at night. Enclosed trough technology is built to
meet the unique needs of the oil industry. Curved mirrors inside a glasshouse
11
Singh et al. (2015)
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track the sun, focusing heat onto a pipe containing water. The concentrated
sunlight boils the water to generate steam. The glasshouse protects the mirrors
from wind, dust and sand. It has an automated washing machine to maintain
performance in harsh desert environments.
Solar energy produces steam with zero emissions; the gas saved can be
exported or redirected to higher value uses such as power generation or
industrial development. As a result, solar-powered EOR can boost the local
economy and help create jobs too.
Petroleum Development Oman (PDO), Oman’s largest producer of oil and gas,
partnered with solar steam generator company GlassPoint to develop the Middle
East’s first Solar-powered EOR system. The 7MWth pilot began producing steam
in December 2012 and continues to operate successfully, producing an average
of 50 tons of emissions-free steam per day. The solar steam is fed directly to
PDO’s existing steam distribution network. The pilot has achieved above 98%
uptime, maintaining regular operations even during severe dust and sand storms.
The success of the pilot is now paving the way for larger solar EOR projects in
Oman and the rest of the Gulf region. In July 2015, PDO and GlassPoint signed
an agreement for a 6000 t/d facility (equivalent to just over 1 GWth) in the south of
Oman. The project named Miraah (“mirror” in Arabic) is expected to save 5.6
trillion Btu of gas and 300,000 tons of CO2 emissions per year. First steam is
expected in 2017.
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Recent global investments in the clean energy sector have exceeded those in conventional
or fossil fuel based power generation technologies. This has been driven by an availability
of a variety of solar technologies catering to different needs (power generation, lighting,
heating etc.) and recent efficiency advancements achieved in those technologies. Figure
14 below shows trend in solar power investments over the last decade. It can be seen that
overall there has been increasing trend which has resulted into huge capacity addition in
this technology.
US $ Billion
180 161
154.8
160 146.2 143.8
140
119.1
120 103.7
100
80 61.6 64.4
60
38.9
40 22.2
11.9 16.1
20
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
This section will cover the trend in solar markets across the globe, identifying key drivers
that have ensured good returns for investors while contributing towards larger policy
objectives of governments – energy security, energy poverty & access and adaptation to
climate change strategies.
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SOLAR PV
Historically, solar PV was not considered to be a mainstream energy source, and was
characterised by very low cell efficiencies and high prices of polysilicon. Most of the
polysilicon produced before 2005 was used by the IT industry and hence, there was a
supply constraint. Policy targets to combat climate change and addition of significant
capacity of solar PV by many developed countries such as Germany, the United States and
Japan pushed investments in polysilicon gradually and by 2008-09 there was a glut in
polysilicon market. This resulted in drastic fall in polysilicon prices and hence overall solar
PV prices, attracting huge investments in the sector. In fact, the glut in market was so big
that many big industry players had to shut down their polysilicon manufacturing facilities,
12
IEA-PVPS (2015)
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It is also very important to mention that improvement in cell efficiencies lately has also
played a vital role in qualifying solar PV as an important source of energy.
Cost of Technology
The solar PV sector is so dynamic that today’s cost of generation may become tomorrow’s
benchmark. Prices for the offtake of solar PV electricity have reduced dramatically in the
last decade; and with the availability of economic financing and policy / fiscal pushes, it is
expected to drop further in the future. Cost of major equipment does not vary much across
the globe; however, it is the financial engineering that is defining these prices in current
scenarios. Since the terms of financing and solar resources vary across countries, so does
the yield or output of energy and returns from solar PV projects. Hence, the focus of this
section will be on the cost of the PV equipment.
The capital cost of a PV system is composed of the PV module cost and the BoS cost. The
cost of the PV module – the interconnected array of PV cells – is primarily determined by
raw material (polysilicon) costs; while the BoS cost includes items such as the cost of the
structural system, the electrical system costs, and the soft costs of system development
(e.g. customer acquisition, permitting, labour costs for installation). The cost of the battery
or other storage system, if any, in the case of off-grid applications also needs to be added.
The detailed breakdown of solar PV cost components is shown in Table 3.
Component Costs
Semiconductor Capital & equipment cost + raw materials (e.g. silicon, saw slurry,
saw wire) + utilities + maintenance & labour + manufacturer margin
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Modules Capital & equipment + raw materials (glass, ethylene vinyl acetate
(EVA), metal frame, junction box) + utilities + maintenance & labour
+ margin + shipping + retailer margin
As solar PV module prices have declined, the importance of the BoS cost is increasing,
particularly the soft costs. This has important ramifications for policy-makers, as price
declines for solar PV modules will now be more modest in absolute terms and will no longer
be a major driver of cost reductions for solar PV systems in the future. Policy-makers must
now turn their attention to driving down BoS costs. This will bring a new set of challenges,
as a much more diverse range of cost drivers have an important role in the BoS, from
permitting procedures and costs, to installation labour, to customer acquisition costs.
Between 2007 and 2014, PV module prices declined by around 79%; the biggest yearly
reduction was seen in 2011, of around 40% from 2010. Within this period of declining
prices, there was a slight increase in Chinese module price in year 2013 due to exchange
fluctuations and trade disputes. In 2014, the downward trend was restored to a range
between 7% for thin-film modules and 22% for German modules. In 2013-14 higher cost
module manufacturers in Germany and China experienced more reduction than average
Chinese modules. The slowdown in the rate of price reductions in 2013 and 2014 was
driven by solar PV module manufacturers consolidating margins and, in many cases, trying
to return to positive margins after a period of manufacturing overcapacity and severe
competitive pressures in the industry. Locally, the cost of PV modules is influenced by
taxation (import duties), performance of modules, market conditions etc. Variation among
countries could be significant and this is shown in Figure 16. The prices of modules in
Germany and Japan in comparison to China have always been higher. Furthermore, it is
important to mention that within a country the prices of modules of different sizes will vary.
This is because both manufacturing cost and margins can be better controlled for larger
module sizes.
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Figure 17 shows that prices of solar PV modules have significantly overshot the expected
learning curve. This was the result of significant overcapacity in module manufacturing and
the cut-throat competition that saw many module transactions occur at cash cost, or in
some cases even lower, as financially stressed manufacturers tried to maintain cash flows.
In 2013, despite record solar PV installations of around 39 GW, global PV manufacturing
capacity, including c-Si and thin-film, exceeded 63 GW13. An additional 10 GW of new
module production capacity may have been added in 201414. The competitive pressures in
the solar PV module manufacturing industry are therefore likely to remain intense, although
– unlike in recent years – profitability for the major manufacturers has improved and is now
on a more sustainable footing.
13
IRENA (2014)
14
GTM Research (2014)
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There has been a pause in reductions in average module selling prices in 2014; however
current prices are still significantly below the learning curve. They are also now so low that
continued cost reductions, based on learning rates of 18% to 22%, will not yield large
absolute cost reductions, as in the past. This means, in most countries, that BoS costs and
in particular the soft costs, will provide the largest opportunity for future cost reductions in
absolute terms and represent the next great challenge for the solar PV industry.
BoS costs are lagging behind the trend for overall PV module prices. BoS costs fell by 39-
64% between 2007 and 2014. Local market conditions and the regulatory environment can
have a significant impact on the BoS costs, and wide variations typically exist within a
country and between countries. Figure 18 shows the range of BoS costs for utility-scale
solar in selected markets. These variations reflect the maturity of markets and supply
chains, but also in many cases the efficiency of support mechanisms since solar system
pricing is often value-based to some extent and influenced by the support levels in place.
However, it has been observed that there is a marginal increase in BoS cost for small scale
or residential systems across the globe.
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1.80
1.56
1.60 1.50
BoS costs for utility-scale solar
1.35
1.40
1.15
1.20 1.07
(USD/W)
1.00
0.80 0.80 0.82 0.84
0.80
0.60
0.40
0.20
0.00
China India Italy Germany Spain United United South Romania
States Kingdom Africa
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The average LCOE of residential PV systems without battery storage was estimated to be
US$0.38-0.67 per kWh in 2008 for the data presented in Figure 19. But this declined to
US$0.14-0.47 per kWh in 2014. LCOE of electricity for residential systems declined by
around 42% between 2008 and 2014 for small systems (0-4 kW) in California and by 44%
for the larger 4-10 kW systems; in other parts of the United States the decline was 52% and
54%, respectively, for these residential systems. The LCOE of French residential systems
is estimated to have declined by 61% between 2008 and 2014, while the LCOE of
Japanese residential systems fell by 42%. The estimated LCOE of residential systems in
Italy fell by 59% between 2008 and 2013 for systems of 1-3 kW in size, while they fell by
66% for larger systems of 3-20 kW in size, for an average decline of around 63%. Between
2010 and 2014, the average LCOE of residential systems in Australia declined by 52%. A
shorter time series is available for China, which has very competitive LCOE levels.
LCOE is well-adapted to areas where demand and sunshine are simultaneous, for instance
places with peak demand at noon due to high rate of air conditioning such as California; but
in places where peak demand is in the evening in winter, and with around 1000 hours
sunshine per year, such as Germany, electricity storage or back up by the grid is required:
cost for the customer must take into account these additional costs in order to give the right
market signal.
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It is worthwhile to mention that LCOEs vary across the countries due to variation in factors
such as capital cost of equipment, labour cost of system installation, cost of capital (debt
and equity), solar insolation etc.
The commercial deployment of CSP plants started in 1984 in the United States with the
Solar Energy Generating Systems (SEGS) project. The last SEGS plant was completed in
1990. From 1991 to 2005, no CSP plants were built anywhere in the world. Global installed
CSP capacity has increased nearly tenfold since 2004 and grew at an average of 50% per
year between 2009-10 and 2013-14. In 2013, worldwide installed capacity increased by
36% to more than 3.4 GW. Spain and the United States remain the global leaders, while
the numbers of countries with installed CSP are growing. There is a notable trend towards
developing countries and regions with high solar radiation.
Moreover, water needs for CSP is a key challenge in inter-tropical regions, and should be
addressed in every project before making decisions.
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The current investment costs for PTC plants without storage in the OECD countries are
typically between US$4,600-8,000 per kW. PTC plants without storage in non-OECD
countries have been able to achieve a lower cost structure, with capital costs between
US$3,500-7,300 per kW.
CSP plants with thermal energy storage tend to have higher investment costs, but they
allow higher capacity factors, dispatch-ability and typically lower LCOEs than plants without
storage (particularly for molten salt solar towers). They also have the ability to shift
generation to when the sun is not shining and/or the ability to maximise generation at peak
demand times. There are a small number of PTC, linear Fresnel and solar tower projects
15
SolarPACES, 2014
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around the world with modest storage capacity of between 0.5 and 4 hours. These plants
have estimated installed capital costs of between US$3,400-6,700 per kW.
The costs of PTC and solar tower plants with thermal energy storage of between 4 and 8
hours are typically between US$6,800-12,800 per kW for projects with available data. This
cost range is wider than the bottom-up engineering estimates obtained from the available
literature of between US$6,400-10,000 per kW.
The evolution of the LCOE between 2008 and 2014 is presented in Figure 22 above. There
was little change in the LCOE range for CSP projects between 2008 and 2012, although
the range widened and grew somewhat with the burst in growth in 2012. Between 2012 and
2014, the LCOE of the projects generally trended downwards. The LCOE for recent
parabolic trough plants without storage is in the range of US$0.19-0.38 per kWh. Adding
storage narrows this range to US$0.20 to US$0.36 per kWh. The fact that recent power
purchase agreement (PPA) prices, where no direct subsidies are supplied, have been
between US$0.14-0.19 per kWh suggests that government guarantees and development
financing have been able to reduce financing costs for some CSP plants to below a 7.5%
weighted average cost of capital (WACC).
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RISKS
Regulatory Risk
Investment in solar energy is also at risk from swift changes from policy and regulation,
particularly in light of steeply falling costs of implementation and rising deployment. As
these trends were difficult to predict, policymakers have been forced to modify or
prematurely phase out initiatives supporting solar in a bid to save costs. Retroactive
policies were responsible for the boom-and-bust cycles in solar development witnessed in
Spain (2008-09) and Italy (2010-12). Retroactive policies are usually as a result of a poor
design of the initial policy structure, through a lack of foresight on the potential changes to
the market and the inability of the measures to respond quickly and adequately to arising
problems. For example, the feed-in tariff implemented in Spain was adjudged to be too
generous to investors and project developers, and retroactive efforts to check this put off
investment, causing the solar PV market to crash. In Italy, excessively long transition
periods between policy schemes caused a boom in installations just before the new
scheme came into effect.
Regional Conflicts
Over the last few years, China has emerged as one of the biggest exporters of solar PV
modules across the world; hampering sales of domestic module manufacturers in Europe,
United States and other countries like India. A series of trade disputes in these countries
were designed and pursued to protect domestic firms but it is generally argued that the
disputes come at a cost of slowing down the growth of solar energy.
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In the United States, two cases unfolded – in 2011-12 and 2013-14 respectively – both
leading to unilateral tariffs on solar PV. Following anti-dumping and anti-subsidy
investigations, the U.S. Department of Commerce (DoC) set preliminary unilateral tariffs on
Chinese module imports in May 2012. The ruling left the possibility open that Chinese
manufacturers import modules assembled in China with cells from Taiwan, leading to a
second case. In May 2014, the DoC expanded the scope and the level of duties.
Similarly, India’s Domestic Content Regulation (DCR) of utilising domestic modules/cells for
a pre-specified scheme/capacity was also challenged by the United States and other
countries. This was done by the Indian government to safeguard the small domestic PV
industry in the country. Since the power purchase from these schemes (DCR) is done by
public/government agencies, the Indian government, under the government procurement
clause of WTO, continues to practice these schemes.
Despite these regional conflicts and trade disputes, the import of Chinese modules has
been increasing because of their cost competitiveness and very large capacity installations
across the world.
FUTURE OUTLOOK
16
Fuhs (2015)
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17
Deutsche Bank, 2015
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located in the municipality of María Elena in the Antofagasta Region, the northern
part of the country. Power generated from this project will be delivered to Chile’s
Northern Region Transmission Network.
As far as c-Si technologies are expected to reach the physical limits in efficiency, RD&D is
key for the future: as soon as the end of the next decade, a new step in PV and CPV
deployment might rely on new materials.
18
IHS (2014), Top solar power industry trends for 2015
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19
SolarPACES
20
Acwa Power (2015)
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3. SOCIO-ECONOMICS
GOVERNMENT POLICIES
As described in the previous section, solar energy is becoming increasingly affordable,
thanks to the dramatic fall in component prices and the cost of installation and operation,
both at utility and distributed level. Nonetheless, with the relatively high upfront costs
characteristic of solar and other renewable energies, there remains the need for
governments to monitor and guide the uptake of solar energy applications in many parts of
the world, by utilising a wide range of policy instruments currently available. Policy
frameworks must be well designed to minimise capital costs of implementation for
developers and regulatory risk for investors.
Countries are increasingly recognising the potential of solar energy to provide sustainable
energy, and this is reflected in the growth in the number of targets and support policies
enacted by governments. By 2015, 164 countries had renewable energy targets in place21;
around 45 of them had targets specific to solar energy – across power generation and
heating & cooling22. Developing and emerging economies have led the expansion in policy
targets in recent years.
The world’s most established solar markets have all benefited or are currently benefitting
from both supply-side and demand-side drivers. For utility-scale solar, subsidies such as
feed-in tariffs (FiTs) and feed-in premiums (FiPs) have been particularly successful in
Europe, Australia and the United States. In the United States, utilities sign long-term power
purchase agreements (PPAs) with developers, securing income streams for the power
plant. Some governments also provide investment or production tax credits to boost solar
development. For distributed systems, FiTs and net metering have been successful
measures. Table 4 shows the range of policy measures driving solar PV and CSP
development in these markets.
FiT is a regulatory instrument that guarantees an investor a buy back price at which the
power purchaser (distribution utility in most cases) will buy power that is being fed to the
grid directly. This tariff or buy back price is calculated considering the overall investments in
the renewable/solar project along with regulated return on the investment. FiT is always
prescribed for a fixed tenor.
It is to be noted that buy back price available to excess energy fed to the grid (after meeting
self-consumption) under net-metering mechanism is generally not called FiT because there
21
Kenning (2015)
22
REN21 (2016) Renewables 2016 Global Status Report
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is no direct feed into the grid, and certainty over quantum of energy being fed to grid is also
not there under this mechanism.
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participating
projects.
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As costs for solar (PV in particular) have fallen dramatically in these markets, the described
measures are gradually being scaled back by policymakers, hence increasing the exposure
of solar to price signals experienced by more established sources of electricity on the
(liberalised) electricity market. For example, in Germany, the target for annual solar PV
capacity additions is set to 2.4-2.6 GW; in the event this ‘corridor’ is exceeded, then the
feed-in tariff available to solar PV investors in new installations, which was designed to
automatically decrease with increasing capacity, will be adjusted downward further and
more frequently than initially planned. In addition, the government has placed a national
capacity ceiling for solar PV of 52 GW, and all support for solar new PV in excess of market
revenue will be scrapped once capacity reaches the ceiling23. The UK cut its feed-in tariffs
for rooftop solar PV by 65% in January 2016, and caps will be placed on government
spending on new capacity up to 201924.
In emerging solar markets such as India, South Africa, the Middle East and North Africa,
auctions (in conjunction with ambitious solar capacity targets) are an increasingly common
means of ensuring solar power development. Tariffs based on reverse bidding have led to
highly competitive markets with some of the lowest tariffs in the world, and an explosion in
23
The Brattle Group (2014) Solar Energy Support in Germany
24
Defra (2015)
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capacity developments over the last few years. Agreed long-term contract prices for
tendered solar PV projects have dropped as low as US$0.06 per kWh in the UAE and
Jordan25 in early 2015, and in Peru the lowest was under US$0.048 per kWh and Mexico
the average was US$0.045 per kWh in early 201626; and US$0.12 per kWh for CSP in
South Africa27.
The following case studies detail the ambitious government-led programmes, and realised
benefits, regarding solar power development in India and South Africa, two of the fastest-
growing solar markets in the world.
The country’s solar plan has envisaged that both central level institutions, such
as the National Thermal Power Corporation (NTPC) and the Solar Energy
Corporation of India (SECI), and state governments (through State Nodal
Agencies) will co-operate to achieve the target. The solar scale up plan of India
was designed by Ministry of New and Renewable Energy (MNRE) in association
with PwC India. The breakdown of 100 GW under different segments and
schemes is as follows:
25
IEA (2015)
26
Ren21 (2016) Global Status Report
27
CSP Today (2015)
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India’s growing solar industry has already benefitted from some recent innovative
schemes. The Jawaharlal Nehru National Solar Mission (JNNSM) phase 1
introduced a bundling scheme to bring the cost of solar power down in 2010-11.
As per the scheme, solar power was bundled by unallocated quota of thermal
power in the country and sold to distribution licensees at a “selling” price of
INR 5.50 (US$0.08) per kWh. This scheme garnered interest amongst the solar
project developers because they could sell solar power at its wholesale price,
while the off-takers bought the power at the selling price. In the second phase of
the mission, viability gap funding (VGF) was provided by the National Clean
Energy Fund (NCEF), to ensure that selling price of solar remained constant.
Recently bid price has gone as low as INR 4.34 (US$0.06) per kWh. This is one
of the lowest solar buy back price across the world.
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As proof of the level of progress made, the JNNSM had set a target of 20 GW by
2022. This target has been revised 5 times now and hence the above mentioned
schemes must be supplemented with more innovative schemes. Bringing
economical dollar currency financing backed by dollar based PPAs is one such
scheme that will be implemented soon.
The REIPPP was launched in 2011, with the first bidding window was concluded with
632 MW of solar PV procured at an average tariff of ZAR 3.44 (US$0.24) per kWh;
and 150 MW of CSP at an average tariff of ZAR 3.35 (US$0.23) per kWh29.
Since bid window one, South Africa has seen a significant drop in Solar PV tariffs, with
the average rates at the end of 2015 at ZAR 0.85 (US$0.06) per kWh - 75% lower
than the first bid window.
The massive drop in the solar PV tariff and the fact that a typical PV power plant takes
only two years on average to build are contributing factors to the government’s
acknowledgement of the value of solar power and its recent announcement of an
expedited round with 1800 MW up for procurement30. The government has also
recognised the value of CSP with storage (and the potential for dispatch-ability) and
offers a 270% tariff increase for CSP systems generating power in peak demand
periods.
28
South African Department of Energy (2015)
29
Eberhard (2014)
30
South African Department of Energy (2015)
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Even with the relatively high tariffs paid in bid window 1, South Africa experienced a
net financial gain from renewables, with the first round of solar PV and wind power
creating an extra ZAR 800 million (US$55.9 million) in financial benefits to the country.
The reasons for this are twofold. Firstly, there is a financial saving gained through
replacing the electricity that would otherwise have been generated from diesel. In
addition to this, there is an economic saving which results from of the mitigation of
unserved energy. South Africa’s power grid is currently under severe constraints, with
the national power utility resorting to load shedding (controlled black outs) in order to
protect the grid from a total black out. Renewable sources have been able to provide
power during these times, reducing the amount of unserved energy.
The growth in the solar market has also led to changes in policy and market design
affecting other energy sources. For example, in some European markets (United Kingdom,
Germany, France, Italy, Belgium) and parts of the United States, the rapid growth of solar
and wind-powered electricity on the grid and the inherent variability of their output, has
contributed towards the establishment of, or desire to establish, variant Capacity
Remuneration Mechanisms (CRMs) in these markets, where conventional generators are
paid to ensure security of electricity supply and stability of the grid. The incentive for
capacity payments is two-fold. Firstly, they are designed to ensure that sufficient capacity is
available at all times. Also, the extra income would help alleviate the struggle of existing
conventional plants to cover their operational costs; which has been experienced in
Germany, where the penetration of renewables has significantly reduced the number of
operating hours of conventional generators and driven down wholesale electricity prices.
On the other hand, critics claim that CRMs will have negative effects on free competition
and the potential integration of multiple energy markets31.
31
Zgajewski (2015)
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SOCIO-ECONOMIC IMPACTS
Germany 56 1 11 69
32
IRENA (2015) Renewable energy and jobs: Annual review 2015. Please note that this is gross number of
job creation, net may be lower as solar energy is subsidized in many countries.
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It is normally argued that most of the land banks utilised for solar plant installations are
generally non-fertile; however, this argument ignores the possibility of innovations in
agriculture technologies that could find out ways to utilise non-fertile land for production of
some crops. A solar plant has a life of around 25 years which is too long a horizon for
ignoring innovations in agriculture technologies.
Share of rooftop PV systems across the globe is not known, as in many countries
differentiation between rooftop PV and utility scale PV is not recorded. However, if major
countries are considered (as shown in Table 7) it can be said that easily above 200,000
acres of land saving has been accrued to date due to rooftop PV segment.
Total 212,000
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4. ENVIRONMENTAL
IMPACTS
While the clear benefit of solar energy compared to other energy sources is the low level of
greenhouse gas (GHG) emissions, the implementation of solar energy technologies may
result in significant environmental trade-offs. The environmental impacts of solar energy
can differ greatly, according to technology and capacity. Adverse environmental impacts
must be taken into consideration while developing strategies for the installation of solar
energy systems.
LAND USE
Utility-scale solar generation comes with a sizeable land requirement, depending on factors
such as the technology adopted, the topography of the available site and solar intensity at
the site. A study by NREL on solar power plants in the United States found a wide range of
total land use requirements across the different technologies. The average total land
footprint of solar generation capacity was estimated at 8.9 acres (36,017 square metres)
per MW, and average land area directly used at 7.3 acres (29,542 square metres) per
MW33. The configuration of utility-scale plants also makes it difficult to share this land for
other uses such as agriculture. It is also important to note that utility scale solar
infrastructure theoretically have lifetimes of 30-60 years34.
Concerns have also been raised over the effects of utility-scale generation on soil quality.
Research in China has shown that land use change (clearing of vegetation, digging of
foundations, construction traffic) for solar thermal construction has led to soil erosion in
near environment, particularly in regions with sandy soils and a dry climate. Results also
showed that solar thermal installations lowered soil temperatures by 0.5-4.0°C in the
summer, and raised soil temperatures by the similar margins in the winter35. The negative
impacts of utility-scale solar can be minimised, somehow, by siting plants in brownfield
locations.
Small-scale PV and solar heating installations have minimal land impact, where they are
actively integrated into buildings and structures they serve.
WATER USAGE
As with other forms of thermal electricity generation, solar thermal plants have a sizable
water footprint to produce electricity. While some of the water requirement is to raise steam
for the plant’s steam cycle, 85-95% of the withdrawn water is for cooling purposes. Hence,
33
http://www.solarindustrymag.com/issues/SI1309/DEPT_New%20%26%20Noteworthy.html
34
Hernandez et al. (2013)
35
European Comission (2015)
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the cooling technology adopted at the plant is a major determinant of the amount of water
withdrawn by the plant. While most of the water requirement is not consumed and will be
returned to the point of withdrawal, the quality of the returned water will differ from that
drawn from the reservoir, and may be a cause for concern.
Water demand of solar thermal plants with (once-through) wet cooling is estimated at up to
3573 litres/MWh of electricity, higher than figures for coal (3123 litres/MWh) and nuclear
(3055 litres/MWh) generation plants with the same cooling system; but also for combined-
cycle gas turbines, which have the lowest water withdrawal and consumption rates among
thermal power plants, at 570-1100 litres/MWh using a wet cooling tower36. This is down to
lower average operating efficiencies of solar thermal plants compared to coal and nuclear
power plants, and additional requirements such as the washing of mirrors (approximately
20 litres/MWh)37. On the other hand, solar thermal plants with a dry cooling system could
reduce its water requirements to less than 10% of that with a wet cooling system. However,
the water savings come with significant trade-offs – these plants have higher capital costs,
and consume up to 1.5% more power than wet cooled plants38. In addition, dry-cooled
technology becomes less effective at ambient temperatures above 38°C.
Solar PV does not use water for electricity generation, and its water requirement, estimated
at 118 litres/MWh, comes from the manufacturing of the PV cells and maintenance of
modules.
HAZARDOUS MATERIALS
A wide range of potentially harmful materials are produced in the manufacturing process of
solar PV cells. The materials produced in silicon PV manufacturing are similar to those
found in the electronics industry. They include silane gas, which is potentially explosive with
several incidents reported every year; and waste silicon dust (known as kerf), which can
cause breathing difficulties for industry workers. Harmful chemicals such as hydrochloric
acid, sulphuric acid, nitric acid, 1,1,1-trichloroethane and acetone are used in cleaning and
purifying the silicon substrate. Sulphur hexafluoride (SF6), used to clean the reactors used
in silicon production, has a Global Warming Potential over 16,000 times more than that of
CO239. Strict regulations to limit fugitive emissions of SF6 are imperative so as to preserve
the global warming reduction potential from solar power.
Thin-film PV cells contain some very hazardous materials including gallium, indium, and
arsenic. Cadmium, which is used in cadmium-telluride (CdTe) cells, is extremely toxic, but
forms a very stable compound with tellurium and hence is not banned as a hazardous
substance. In addition, the cadmium content in one CdTe module is 2500 times less than
36
IEA (2012)
37
Martin (2014)
38
World Nuclear (2015)
39
UNFCCC (2015)
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found in one nickel-cadmium (NiCd) battery, and 360 times less than that emitted by an
average coal-fired power station per kWh of electricity generated40.
In the case of a leakage, the heat transfer fluid (HTF) used in CSP systems (synthetic oils
in particular) also pose a risk to soil, ground and surface water, air and humans. Research
shows that HTF leakage from parabolic trough and parabolic dish technologies are
potentially more harmful than from solar tower systems41.
LIFE-CYCLE EMISSIONS
The majority of emissions from solar energy systems occur at the upstream stage of the
life-cycle (manufacturing, transportation and installation). Materials use contributes a high
fraction of life-cycle emissions, reaching up to 50% of total emissions for tower CSP.
Between 50-80% of greenhouse gas emissions arise during the production of the module42.
Emission levels depend on the type of technology and the source of energy used in
manufacturing. Silicon PV in particular has a very energy-intensive manufacturing process.
For instance, studies have shown that the carbon footprint of a solar panel manufactured in
China is twice that of a panel made in Europe, due to the coal-powered energy used in the
process. Nonetheless, as there are no GHG emissions evident during electricity generation,
emissions from solar energy are much lower than those from fossil-fuelled generation.
Figure 26 shows the average life-cycle emissions from different solar technologies, using
the following indicators: greenhouse gases, particulate matter, and eco-toxicity. Emission
factors from both ground- and roof-mounted polysilicon PV are significantly higher than
those from other solar technologies.
40
CAT Information Service
41
Fabrizi (2012)
42
Weisser, IEA
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70 0.14
60 0.12
50 0.1
40 0.08
30 0.06
20 0.04
10 0.02
0 0
poly-Si poly-Si CIGS CIGS CdTe CdTe Parabolic Tower
(ground) (roof) (ground) (roof) (ground) (roof) trough
GHGs Particulates
Concerns are also growing over solar panels once they reach the end of their lifetime. The
disposal of panels could cause leakage of dangerous materials into the surrounding
ecosystem. Recycling of old panels is not common as it is not economically attractive to do
so yet. Costs of recycling modules in the United States may be as high as US$400 per
tonne43. However, it is hoped that better sustainability standards regulating the solar
industry and the opportunity to recover rare elements from old devices will drive recycling in
the future. From 2015, a German law on electrical and electronic equipment requiring
manufacturers to take back their products once they reach the end of their lives was
extended to PV systems, hence incentivising the recycling of modules. The law also
stipulates that the products, once sold in Germany, must be recycled in the country,
preventing them from being shipped to less developed countries.
OTHER IMPACTS
Solar energy systems, especially at utility scale, can also affect the biodiversity of the local
environment, both within and outside of their land footprint. Landscape fragmentation can
harm vulnerable vegetation, and create barriers to the movement of species. The mortality
of resident bird species from the operation of utility scale solar plants has been documented
in the United States. The causes of death identified include collision with infrastructure and
burning by heliostats44. Research has also shown that utility-scale solar can affect land-
43
Friedrichs, Solar Industry Magazine
44
McCrary et al. (1986)
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atmosphere interactions, such as albedo (the ratio of how much radiative energy is
reflected back to the atmosphere) and local wind dynamics.
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5. OUTLOOK
CHALLENGES
It is thus important that at least policy makers are aware of likely grid integration cost of
solar energy. It is also strongly required to establish aggregators as innovative solutions for
control of distributed renewable energy (DRE) and of demand response (DR) units in
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providing its flexibility45. Figure 27 below shows the grid integration cost of a few European
countries. All the countries assessed have cost except for Greece. In Greece, the cost is
even negative indicating the benefit that PV can bring in reducing/releasing the distribution
network capacity in the country. This is due to the strong correlation between peak demand
and output of PV.
(AT- Austria, BE- Belgium, CZ- Czech Republic, FR-France, DE- Germany, GR- Greece, IT-
Italy, NL- Netherland, PT-Portugal, ES- Spain, UK- United Kingdom)
Materials consumption
The expansion of the solar PV industry and commercialisation of next-generation PV
technologies will add a strain on the sourcing of the specialist materials required to their
manufacture. While the vast majority of solar PV cells are based on silicon, which is readily
abundant in sand; thin-film cells rely on less abundant materials which face constraints to
their production, as is shown in Table 8. Chromium is also of strategic importance to the
solar industry, as black chromium plating is used to absorb solar energy; while the
reflectivity of silver makes it high in demand in silicon cells and new-age flexible solar cells.
45
INCREASE (June 2016), Emerging Frameworks for aggregators in the EU, Policy Brief No. 1
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Silver 23 - Low
46
University of Augsburg (2011)
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Technical expertise
It has already been intimated that solar energy can play a major role in extending energy
access to communities in the developing world. However, it is clear that these countries
suffer from a lack of technical expertise to implement these facilities. In Mexico, a shortage
in the indigenous human resource is a key barrier to fulfilling the high potential for solar
development in the country. It is important that the effective transfer of technical skills is
ensured in these regions, and the more advanced economies can play a role in effecting
this. For example, in 2015, investors from China co-launched a technology and transfer and
training centre in Kenya, to promote the assembly of solar lighting systems49. The ultimate
aim of schemes like this is to develop an indigenous solar industry in these countries.
Climate change
The changing climate will also have a profound effect on the availability and operation
performance of solar energy technologies. Solar thermal power in particular is at risk,
especially with an expected decrease in water availability in the future. Concentrated solar
plants are best situated in arid and semi-arid regions, where solar insolation is high but
water stresses already exist. Increased deposition of dust in these regions on mirrors and
PV panels will also lead to negative performance of plants. The warming climate will be of
concern for solar PV systems as output deteriorates with rising temperatures; but could be
more favourable for solar thermal plants as higher ambient temperatures may aid operating
efficiencies50,51. As a result, the geographical distribution of solar technologies is expected
to change over time.
47
Platts (2012)
48
IHS (2014)
49
African Review (2015)
50
Hernandez et al. (2013)
51
Lovegrove and Stein (2012)
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OPPORTUNITIES
Responsive policy actions are needed to address the challenges of waste management
with enabling framework being adapted to needs and circumstances of each region or
country. China, US, Japan, India and Germany (in the decreasing order) are going to
produce largest share of PV panel waste by 2050. However, at present only EU has
adopted PV-specific waste regulations.
It is important for this to be seen from an opportunity point of view because end of life
management could become a significant component of the PV value chain by 2050. It is
estimated that wasted 4500 GW worth of panels can be recycled to around 630 GW new
panels, if recycling frameworks will be designed and adhered to.
Off-grid electricity
The growth of solar power could be boosted by the expansion of off-grid electricity systems.
About 1.3 billion people globally do not have access to electricity53. Individual off-grid
systems have the potential to improve rates of energy access in the developing world, by
providing simple energy services (e.g. lighting, heating) to remote communities and other
areas where grid connection is unavailable or unreliable.
India 304 75 67
Nigeria 93 45 35
52
Under early loss scenario meaning panels life to be less than expected. In regular loss scenario it was little
less at 60 million tonnes
53
IEA (2014)
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Ethiopia 70 23 10
Bangladesh 62 60 48
Congo (Dem. 60 9 1
Rep.)
Indonesia 60 76 59
Pakistan 56 69 57
Tanzania 36 24 7
Myanmar 36 32 18
Kenya 35 20 7
Solar power has contributed to providing energy access to millions of people globally over
the last decade. Numerous schemes, particularly in Asia have leveraged the potential of
small-scale solar applications to lift millions of citizens out of poverty. For example, the
government-backed Solar Home System (SHS) scheme in Bangladesh has been hugely
successful, installing 3.6 million solar power units in the country by early 2015, and
benefitting 20 million citizens. The scheme has not only expanded electricity access in rural
parts of the country, but has also led to the creation of an indigenous solar industry which
employed up to 115,000 people in 201454. The following case study exemplifies the effects
of a simple yet effective scheme leveraging solar power.
54
IRENA (2015) Renewable energy and jobs: Annual review 2015
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In an effort to tackle this crisis, the Buksh Foundation launched the Lighting a
Million Lives (LaML) project in 2009. The project’s aim is to replace kerosene-
based lighting with cleaner, more efficient and reliable solar lighting devices in
poor un-electrified villages of Pakistan. The foundation has partnered with The
Energy and Research Institute (TERI) in India to expand on its project of Lighting
a Billion Lives, currently running in South Africa, Uganda and Bangladesh. LaML
aims to “light a million lives”, equivalent to 4000 villages, by the end of 2017.
LaML is the first impact project in the developmental sector in Pakistan that aims
to provide turnkey solutions to stimulate change, and empower people and
organizations from the grassroots level. The project involves the implementation
of a Solar Charging Station with 50 solar lanterns for locals as sources of low-
cost, clean energy. The charging stations are operated by a young female
entrepreneur (Roshna Bibi, or “Light Lady”), who is trained by the Buksh
Foundation, along with the development of a male technical entrepreneur and
engaging the entire community towards ownership of the project. Certified by the
UN Foundation, International Finance Corporation, World Energy Council, and
Forbes Magazine, LaML has proven to be a successful model of change in
Pakistan. The project has electrified over 150 villages with a total impact on
45,000 lives, especially underprivileged groups such as women and children, with
the support of partner organizations and companies.
Even in more developed markets, off-grid solar is becoming more attractive. In some
countries / regions such as Australia, California and parts of India; solar energy has
reached ‘socket parity’, where off-grid solar is cheaper over its lifetime than consuming
electricity from the grid. It should be pointed out, however, that in these areas grid
connection provides insurance of a constant supply of electricity for customers, in the event
that the off-grid systems break down.
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Chilcott, (2006) Health Protection Agency
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also ensure that the relatively high capital costs of implementing stand-alone systems are
shared among customers.
Germany and Japan accounted for almost 70% of the residential PV energy storage
systems in 2014 and will continue to gain leadership positions. FiT for solar is lower than
retail tariff in Germany and hence self-consumption of PV energy is encouraged in the
country by capital subsidy for batteries. In Japan, frequent blackouts after closure of
nuclear plants made way for penetration of storage systems and the now wide variance
between peak and off-peak prices provides incentives to store energy. On the other hand,
the United States will see penetration in the commercial segment because of peak demand
charges that make a significant proportion of electricity bills of consumers. The potential
savings combined with incentives offered by the Self-Generation Incentive Program (in
California) and tax credits, can make solar and energy storage an extremely attractive
proposition to commercial-rate payers in the country. Regulatory restriction of the
renewable ramp rate in many states will also push storage of PV energy. It is estimated
that around 1 GW of storage installations will be achieved by 2016 across the world, with
most installations coming in the aforementioned countries.
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Industrial Solar – Solar Process Heat
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6. GLOBAL TABLE
Country Solar Concentra Total Solar Total Solar Total Solar Share of Solar
Photovoltaic ted Solar Generating Electricity Electricity PV in Total
(PV) Power Capacity Consumptio Generation in Installed
Generating (CSP) (MW) in n 2014 Power
Capacity (MW) in 2015 (GWh) in (GWh) Generating
(MW) in 2015 2015 2015 Capacity in
IRENA IRENA BP IRENA 2015 (%)
IRENA (2016) (2016) (2016) (2016) (2016) BP (2016)
Afghanistan 1 - 1 - 1 -
Albania 1 - 1 - 1 -
Angola 12 - 12 - 19 -
Antigua and
3 - 3 - 1 -
Barbuda
Argentina 8 - 8 - 16 -
Armenia 1 - 1 - - -
Aruba 5 - 5 - 7 -
Azerbaijan 3 - 3 - 1 -
Bahamas 1 - 1 - 2 -
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Bahrain 5 - 5 - 9 -
Barbados 9 - 9 - 10 -
Belize 1 - 1 - 6 -
Benin 1 - 1 - 2 -
Bolivia 7 - 7 - - -
Bosnia and
11 - 11 - 5 -
Herzegovina
Botswana 2 - 2 - 2 -
Brazil 21 - 21 - 61 -
Brunei Darsm 1 - 1 - 2 -
Burkina Faso 7 - 7 - 10 -
Burundi 2 - 2 - 3 -
Cabo Verde 10 - 10 - 14 -
Cambodia 6 - 6 - 3 -
Cameroon 2 - 2 - 2 -
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Chinese
800 - 800 875 552 0.4%
Taipei
Cook Islands 1 - 1 - 2 -
Costa Rica 1 - 1 - 2 -
Croatia 44 - 44 - 35 -
Cuba 8 - 8 - 29 -
Curacao 8 8 - 12
Cyprus 85 - 85 - 84 -
Czech
2 075 - 2 075 2 262 2 123 9.5%
Republic
Dominican
16 - 16 - 20 -
Republic
Ecuador 26 - 26 - 16 -
Egypt 25 20 45 70 40 -
El Salvador 2 - 2 - 2 -
Fiji 2 - 2 - 1 -
Finland 11 - 11 - 8 -
Fr Guiana 39 - 39 - 51 -
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French
22 - 22 - 5 -
Polynesia
FYR
16 - 16 - 14 -
Macedonia
Ghana 2 - 2 - 4 -
Guadeloupe 67 - 67 - 103 -
Guatemala 80 - 80 - 7 -
Guyana 2 - 2 - 3 -
Hungary 96 - 96 107 56 -
Indonesia 12 - 12 - 11 -
Iran - 17 17 104 19 -
Ireland 1 - 1 - 1 -
Jamaica 6 - 6 - 7 -
Jordan 26 - 26 - 14 -
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Kazakhstan 55 - 55 - 1 -
Kenya 24 - 24 - 30 -
Kiribati 2 - 2 - 2 -
Lao PDR 1 - 1 - - -
Latvia 2 - 2 - - -
Lebanon 4 - 4 - 7 -
Libya 5 - 5 - 8 -
Lithuania 71 - 71 73 73 -
Madagascar 5 - 5 - 4 -
Malawi 1 - 1 - 6 -
Maldives 4 - 4 - 2 -
Mali 6 - 6 - 8 -
Malta 60 - 60 - 68 -
Marshall
1 - 1 - 1 -
Islands
Martinique 62 - 62 - 84 -
Mauritania 18 - 18 - 25 -
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Mauritius 18 - 18 - 25 -
Mayotte 13 - 13 - 4 -
Micronesia 1 - 1 - 1 -
Moldova Rep 3 - 3 - 1 -
Mongolia 5 - 5 - 1 -
Morocco 18 23 41 - 61 -
Mozambique 7 - 7 - 11 -
Namibia 21 - 21 - 26 -
Nepal 32 - 32 - 48 -
New Caledon 8 - 8 - 13 -
New Zealand 33 - 33 - 16 -
Nicaragua 1 - 1 - 1 -
Niger 6 - 6 - 8 -
Nigeria 17 - 17 - 22 -
Norway 14 - 14 - 11 -
Palau 1 - 1 - 1 -
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Panama 14 - 14 - 1 -
Poland 71 - 71 57 7 -
Puerto Rico 88 - 88 48 -
Qatar 3 - 3 56 5 -
Russian
407 - 407 54 7 -
Federation
Rwanda 9 - 9 - 13 -
St Kitts and
1 - 1 - 2 -
Nevis
St. Lucia 1 - 1 - - -
St. Vincent
and The 1 - 1 - 1 -
Grenadines
Samoa 3 - 3 - 5 -
Saudi Arabia 25 - 25 - 43 -
Senegal 8 - 8 - 13 -
Serbia 6 - 6 10 6 0.08%
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Singapore 57 - 57 51 40 -
Solomon
1 - 1 - 2 -
Islands
Somalia 1 - 1 - 1 -
Sri Lanka 16 - 16 - 18 -
Suriname 5 - 5 - 8 -
Sweden 85 - 85 80 47 0.1%
Tanzania 14 - 14 - 16 -
Togo 1 - 1 - 1 -
Tokelau 1 - 1 - 1 -
Tonga 4 - 4 - 5 -
Trinidad
3 - 3 - 4 -
Tobago
Tunisia 15 - 15 - 22 -
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Tuvalu 1 - 1 - - -
Uganda 20 - 20 - 31 -
United Arab
33 100 133 327 300 -
Emirates
United
9 077 - 9 077 7 556 4 050 3.9%
Kingdom
United States
of America 25 540 1 777 27 317 39 000 24 603 11.1%
(USA)
US Virgin
4 - 4 - - -
Islands
Uruguay 68 - 68 - 3 -
Venezuela 3 - 3 - 5 -
Zambia 2 - 2 - 3 -
Zimbabwe 4 - 4 - 7 -
Total World 222 360 4 650 227 010 253 000 223 948 -
Source: International Renewable Energy Agency IRENA, 2016 Statistics; BP Statistical Review of World
Energy 2016 workbook
Note: Numbers are approximated, with for instance figures between 1 and 1.5 shown as 1,
and between 1.5 and 2, shown as 2.
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Figure 3 – CSP installed capacity in major countries up to 2016 (in MW) ..................................... 5
Figure 18 – Typical BoS cost for utility-scale solar (USD/W) across various economies in 2014 28
Figure 21 – Installed costs and capacity factors of CSP projects by their quantity of storage..... 31
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TABLES
Table 1 – Annual Global Horizontal Irradiance (GHI) and Direct Normal Irradiance (DNI) for WEC
geo-regions ................................................................................................................................... 7
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ACKNOWLEDGEMENTS
The project team would like to thank the individuals who informed the project’s approach,
supplied information, provided ideas, and reviewed drafts. Their support and insights have made
a major contribution to the development of the report.
Project Management
Corina Radu, Nnamdi Ibeanu World Energy Council UK
Lead Author
Deepak Khetarpal PwC India
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