“175 Years and 1%”
When Edmond Becquerel discovered the effect that bears his name, electricity was still a curiosity. He couldn’t imagine, 175 years ago, that the Becquerel effect -better known as the Photovoltaic Effect (or PV)- was about to change the way how the world is powered. But History can take tortuous ways: one generation later, the son of Edmond Becquerel, Henri, received the Nobel Prize in Physics together with Marie and Pierre Curie for another discovery that would change the face of energy (and war): radioactivity. Often science evolves in a strange way: nuclear power became mainstream before Photovoltaics could even be used to power satellites. But the energy world is changing fast. Few predicted twenty years ago that PV would experience such a boom in the beginning of the 21st century, and that it would threaten the position of conventional energies in several countries. Coming from space exploration, PV developed in labs during decades before popping-up at the face of the world, while at the same time concerns were raised regarding energy security, depletion of conventional fossil fuels reserves, nuclear risks and climate change.
Of course, we are far from a world powered by renewable energies and PV in particular. PV will deliver 1 % of the world electricity demand for the first time in 2014. One percent represents the end of a heroic period and the dawn of a new era, full of challenges, uncertainties but with the assurance that PV will play a major role in the electricity sector, later or… sooner than many expected. This first percent of penetration hides various realities, and in Italy, Greece and Germany, PV is already providing more than 5% of the electricity demand on a yearly basis. This percentage can even be multiplied by two; PV provides today more than 15% of the peak electricity demand in Italy and Greece and 13% in Germany. These numbers are no longer anecdotic and result from the fast evolution of the PV market in the last decade.
This evolution of the PV market in the last five years is the consequence of decades of investment in R&D, combined with the willingness of some visionary policymakers and industrials in Europe, the US, Japan, China and many other countries. 40 GW were installed globally in 2013 – producing the equivalent amount of energy as 6 nuclear reactors of 1 GW -, thanks to a combination of elements that will be difficult to replicate in the coming years. Indeed, the European markets are suffering from a stagnant economy, utilities are under pressure, policymakers are often obsessed with short-term elections in a difficult social environment and, worst of all, the PV technology has a rather bad reputation in several countries. Inadequate policies leading to sudden booms and bursts have damaged the image of PV in many countries and could make its rebirth long and complex. Outside Europe, the Asian lead on the PV market is new and came so fast that it could be challenged. The development in Japan will finally flatten or decrease while the evolution of the Chinese market remains uncertain. With 12 GW of ground-mounted installations and only 800 MW of distributed PV, the Chinese market will remain a question mark for the future development of PV. Meanwhile, in many places around the world, PV appears on the map of policymakers and energy companies. From Chile to South Africa or Indonesia, PV becomes hype, despites the uncertainties. In a nutshell, the challenges remain enormous to make PV a competitive source of electricity and allow the PV industry to continue growing.
These uncertainties relate finally to the very nature of the electricity sector: energy was, is and will be somehow regulated by politics, together with the laws of economy. Energy is a weapon and a shield: it unlocks growth or detonates crises, as in 2008. It is now widely accepted that the so-called financial crisis in 2008 was detonated by the increase of oil prices since 2007. In a world where the most traded good remains oil, by far, energy cannot be disconnected from policy. Since affordable energy is the basis of our modern civilization, it is not and will never be a simple commodity that can be simply regulated by the laws of supply and demand. The electricity markets in Europe or in the US are the best example of such an intertwined relationship between policy and economy, between the power of economy and the economy of power. Electricity markets shouldn’t even receive the word of “markets”, given the high level of regulations that frame them. In that respect, PV will remain a policy driven business and will have to cope with hostile regulatory environments for several years, at least in countries with a flat electricity demand.
175 years ago, the world was… not powered at all! PV was even discovered before the first power station was built in New-York in 1882. Over the last 130 years, electricity has become so central in our lives that the sole perspective of losing it during a few hours is considered as a drama with high political consequences. The electricity ecosystem is a complex one, built decade after decade, where every source of electricity has found its place. The emergence of new renewable energy sources, such as wind and PV came so fast in several countries that all the patiently built ecosystem of electricity is shaken and is now reacting to find a new equilibrium. PV will integrate in these energy ecosystems if it can find its place, pushing slowly out some energy sources and complementing others. Reaching this 1% of the global electricity consumption was possible without considering the reality of the electricity sector. But in several countries, the question of the impact on the electricity ecosystem will make the growth of PV more challenging and more interesting.
PV is on the verge of becoming the most revolutionary energy source seen since the first power plant in 1882. No electricity source was as scalable at PV is today. No electricity source bears the hopes of electrification for 2 billion people without access to electricity and no other electricity source will offer the possibility for consumers to become acting prosumers in the electricity sector. Combining these assets with the already known challenges is transforming PV into the most revolutionary source of electricity ever conceived, a revolutionary source that bears hopes and fears, that will transform the ecosystem in which it plays. An electricity source that will not wait an additional 175 years to become the first source of electricity globally.