Spurring Growth

Changing PV market dynamics and technology advances

With the global focus on renewable energy transition, the solar PV industry has been growing continuously with competitive market dynamics. The improvement in efficiencies, reduction in manufacturing costs and increased investment in research and development have allowed the industry to expand tremendously over the past decade. As per the Fraunhofer Institute for Solar Energy Systems, between 2010 and 2020, the compound annual growth rate of cumulative PV installations, including off-grid installations, was 34 per cent. As per IRENA, the cumulative PV installations at the end of 2020 were roughly 710 GWp. In 2020, Asia accounted for 95 per cent of the total crystalline silicon PV module production, with China holding the lion’s share at 67 per cent. This was followed by Europe at 3 per cent and North America at 2 per cent. In 2020, the contribution of Europe to the total PV installations fell from the 2019 levels to 22 per cent in 2020, while Chinese installations accounted for 33 per cent of the total installed capacity, the same as the previous year.

The pandemic led to supply chain disruptions in the PV market, which were further exacerbated by the shutting down of manufacturing facilities in China as well as a shortage in solar glass supply. Consequently, the industry focus is now shifting towards building local manufacturing capacities. Despite such disruptions caused by the pandemic, the global solar PV industry witnessed the second-highest absolute generation growth of all renewable technologies in 2020, followed by wind power, as per the International Energy Agency. The growth in the sector in 2020 also translated into the highest increase in solar PV capacity in any given year. The top three performing countries in the segment – China, the US and Vietnam – added a record 134 GW of solar PV capacity in 2020.

Several developments have occurred in the PV market. These include the entry of new players, increase in wafer sizes to increase in the power output of modules and commercialisation of new technologies. Technologies such as heterojunction, bifacial modules and perovskite cells are being increasingly explored. However, in 2020, silicon-wafer based PV technology accounted for 95 per cent of the total production, with monocrystalline technology accounting for 84 per cent of the total crystalline-silicon production. The PV market is also transitioning from subsidy-driven models to models based on power purchase agreements using competitive pricing. Solar PV continues to be a low-cost alternative towards green energy transition, which is rapidly being adopted by countries world over.

Status of solar PV technologies

Increasing price pressures and the rising demand for renewable energy alternatives have encouraged investment in both existing and new PV technologies in recent years. At present, the PV market is dominated by monocrystalline-passivated emitter rear cell (mono-PERC) panels. As the name suggests, monocrystalline panels utilise solar cells cut from a piece of silicon grown from a single, uniform crystal. These panels are high efficiency and require the highest quality silicon and entail a rigorous manufacturing process. As per the Renewables 2021 Global Status Report (REN 21), mono-PERC technology took over the market in 2019, leaving behind multi-crystalline technology. Multi-crystalline panels use multifaceted silicon crystals in solar cells. They are relatively less costly and also less efficient as compared to mono-PERC panels. However, with advancements in technology, the gap in efficiency has reduced over the years. Yet, monocrystalline technology accounted for all expansions of silicon ingot crystallisation capacity in 2020 (REN21). The declining difference in the cost of the two technologies and the higher efficiency of monocrystalline cells have led to such an expansion of mono-PERC. The industry has also moved beyond PERC, with the introduction of various new technologies showcasing potentially higher efficiencies and output capacity.

Heterojunction cell technology (HCT) is slowly penetrating the market as it offers high levels of efficiency and can be manufactured at low temperatures. The technology requires completely new production lines and cannot utilise the equipment line used for PERC. The cost of silver used in HCT is also very high. However, HCT offers several advantages, making it the likely successor of PERC in the PV market. As compared to the long and rigorous manufacturing processes associated with mono-PERC and other passivated contact cells, HCT requires a simpler and swifter process of manufacturing across the production line. HCT cells are more compatible with thin wafers, which can significantly reduce costs given the rising polysilicon prices. HCT is also more compatible with upcoming technologies such as perovskites in tandem cells.

Furthermore, these cells have shown very high levels of bifaciality, which has attracted interest in the PV market. As bifacial modules capture sunlight on both sides, they generate greater output at a lower cost. As per SolarPower Europe’s “Global Market Outlook for Solar Power 2020-2024”, power gains from bifacial cells can range from 5 per cent to 30 per cent depending on the cell technology, module design and location. Bifacial cells have shown immense promise with increasing success rate in their applications on the ground. However, a major challenge remains the demand-supply gap in solar glass, with a shortage in supply driving up the prices.

Perovskite cells have also gained traction in research and development. However, the long-term stability of these cells has not yet been established. The degradation of perovskite cells and their lead content have also posed limitations in the commercialisation of this technology. While perovskite cells have high efficiency levels, they cannot compete with existing technologies such as mono-PERC until their levellised cost of electricity is competitive with existing technologies.

Another technology with a high efficiency potential is tunnel oxide passivated contact cells. This technology is compatible with the equipment of existing mono-PERC production lines, making it attractive to manufacturers utilising PERC production lines. A major limitation in its adoption is its complex production process compared to HCT and mono-PERC.

Outlook and trends

As per the International Technology Roadmap for Photovoltaic (ITPRV), monocrystalline silicon wafers will continue to dominate the market in 2022 with a 90 per cent share. Overall, PERC technology will continue to dominate the market, with an expected market share of more than 85 per cent in 2022. The technology is anticipated to remain dominant until 2032 with a 70 per cent market share, followed by heterojunction technology with roughly 19 per cent market share. This may be followed by high efficiency technologies such as perovskite cells. The market share of higher-grade n-type material is also expected to reach 70 per cent from the current 20 per cent in the coming decade.

Solar panels have a lifetime of 25-30 years, and the volume of decommissioned panels is anticipated to rise in the coming years, not only due to the ageing of system components but also the increasing power ratings of modules. The power ratings of modules have risen from 400 W in 2019 to 500 W in 2020 and are now reaching 600 W with advancements in cell technology. The increase in power ratings will translate into a reduction in the number of modules required per project. As a result, the overall cost of installation and operations may reduce along with the space requirements of modules. According to REN 21, the development of panels with greater power efficiency that generate high electricity output per installation has led developers to replace panels before the end of their lifetime. As a result, decommissioned panels will continue to rise, creating the need for a robust recycling and disposal mechanism for panel components.

The global PV technology market is also likely to witness various advances in the efficiency of existing technologies as well as in the development of new technologies over the next decade. The analysis by ITPRV suggests that the efficiency of mainstream p-type mono-silicon-based modules will rise by 2.2 per cent from 20 per cent at present. Highly efficient technologies such as heterojunction and other N-type modules, which currently top the market with about 21 per cent efficiency, are expected to reach 23 per cent efficiency over the next 10 years. By 2023, the mass production of silicon-based tandem cells and modules is also likely to commence, with module efficiency of 22.5 per cent.

While the solar PV industry is constantly improving in terms of the efficiency and effectiveness of various technologies, ensuring the price competitiveness of such technologies is critical for the growth of the PV market. The industry has seen a rise in manufacturing costs across the supply chain due to increase in the size of wafers by large players. A focus on the reduction of manufacturing costs and addressing the financial and bankability challenges is, thus, crucial. Furthermore, greater emphasis on technologies that are not only low-cost and efficient, but are also easily deployable is needed. Finally, a robust policy and regulatory set-up, which covers the entire life cycle of solar PV, including the recycling of panels, will ensure the growth and stability of the sector while also maintaining its sustainability.

Kasvi Singh

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