Solar support

The good things in life are rarely free and that applies to solar power too. An analysis on this sector in ICIS chemical business highlights how high investment costs associated with photovoltaic (PV) cells has prevented the technology from being cost competitive on a standalone basis.

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Photo by juicyrai

But a step-change in the economic competitiveness of PV cells is imminent, say Alexander Keller and Thorsten Ploss of Roland Berger Strategy Consultants. Grid parity or the point at which solar electricity becomes equal or cheaper than electricity from conventional sources could be realised by 2015, five years ahead than earlier estimates.

The consultancy says that chemical suppliers to the PV industry face two structural challenges – the shift to China and the move from conventional to thin-film technology.

Asia’s (excluding Japan) share in the global PV market is projected to grow to more than 40% in 2030 from just 2.8% in 2007. Both India and China will be driving this growth. China plans to spend Euro3.2bn over the next five years while India is expected to unveil in September a target of generating 20GW of solar electricity by 2020.

The shift to thin-film is expected to provide major opportunities to the chemical industry but companies will need to adapt.

While the long term prospects are good, Indian companies are facing short term challenges. This is evident at Moser Baer Photo Voltaic which has deferred plans for the construction of a plant in Chennai due to liquidity constraints and production mismatch. The company has also temporarily closed a plant at Noida due to high stocks.

A little bit of support will be useful.

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