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way from meeting. It is particularly tough if the competition is base-load coal or nuclear plants where costs of the fuel to the power station owners are very low. 13. However, it is the case that, whilst PV installations are on a relatively small scale (and even the European Photovoltaic Industry Association expects only a 1% contribution to electricity supply by 2020), the costs of PV electricity need be competitive only with the retail price of power from electricity companies. This is a much softer target and is certainly helping PV electricity begin its penetration into the ongrid market. But if the ultimate impact of PV is to be large it will have to meet the more difficult challenge of competing with more dependable bulk power producers in the wholesale market where the costs of its inability to meet demand at night or in poor weather will have to be factored in. (C) Attractiveness of solar electric (PV) technologies 14. PV systems have already proved their advantages over conventional energy sources in remote, off-grid applications and in mobile specialist devices such as watches and calculators. These applications have already created a successful PV manufacturing industry. 15. PV systems also have many features which are attractive for bulk energy supply, not least the technical potential to supply electricity for a significant part (up to about a quarter) of the total EU demand. Thus the input solar energy is ubiquitous and fully sustainable; the raw materials needed for PV manufacture are very widespread; PV poses only modest safety risks to the workforce (during installation and cleaning) and none to the general public; they cause no noise or gaseous emissions when in use; when used as roofs or facades for buildings they cause little visual intrusion; their modularity makes it easy to match capacity to demand requirements; installation is usually straightforward and quick; they cannot be significantly disrupted by any political, economic or terrorist incidents. Moreover, the direct economic benefit to the owner is often in electricity that no longer has to be bought from retail suppliers at high, retail prices. (D) Priorities for augmented R&D 16. Current installed system costs for building-integrated PV in Europe are around 5 –10 € per peak watt (PV module costs 3 – 6 € per peak watt). On a good site in southern Europe, with around 1800 equivalent peak solar-power hours per year, assuming a capital charge rate of 6% and a system life of 20 years but no significant maintenance costs, this corresponds to an electricity cost of around 25 - 60 €cents per kWhr. This is more than 10 – 20 times the fuel and transmission costs of conventional electrical power, with which PVs will ultimately have to compete if they are to make a large contribution to supply, but only 1 – 8 times the retail price. There are two different approaches to making PVs more widely competitive, though they are not necessarily independent. 17. The first is to subsidise the deployment of the current technologies (the guaranteed price paid to solar generators in Germany is 46 €cents / kWhr) and rely entirely on economies of scale and the learning curve of mass production. If enough solar cells are manufactured using the currently dominant silicon technology then the costs will reduce; and silicon enthusiasts believe that these cost reductions will be big enough to ensure that these cells can eventually compete without subsidies. The second approach is to search for more efficient cells such as multi-layer junctions with a range of 96PDF Image | Economic Perspectives of Renewable Energy Systems
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