The continuing fall in crystalline PV module prices is likely to force CPV developers to seek new markets this year. Big contracts and big advocates could be the answer to break into unventured territory.
In 2011, CPV flew from its nest by breaking out of Europe and the US. In March, Skyline Solar announced a 500 kW plant in Durango, Mexico. In July, Amonix trumpeted a tie-up with Thermax in India. Three months later, SolFocus opened up shop in Chile.
Expect more of the same in 2012. CPV is having a harder time in its traditional markets, on account of waning support for solar and intense price competition from traditional crystalline PV.
“Generally, if you are trying to compete head to head with flat-plate PV in the US, it has got a lot harder in the last year,” says Brett Prior, senior analyst at GTM Research, adding that the all-in cost for traditional PV has plummeted from about US$3.50 a watt to $2.50 a watt in 12 months.
“In Germany, rooftop systems are $2.80. That is a really difficult number to compete with. Your competition just dropped their prices by a dollar a watt in a year.”
How can a more expensive solar technology like CPV cope with that level of competition? One option might be to look for places where it can still find a profitable niche.
Tim Keating, vice president of marketing and field operations at Skyline Solar, says: “The biggest boom is in Italy right now. With their CPV feed-in tariff, it is a very exciting market right now.”
The attraction, he says, is that CPV can be used for infill to get decent feed-in tariffs out of the relatively small areas of ground still left for solar development. “They are shying away from ground-mounted developments generally,” he states.
Charlie Richardson, class underwriter at the renewable energy insurance firm GCube, agrees that CPV could do nicely in helping to extract the maximum tariff potential when space is at a premium.
Space on the ground
“The way that the Italians talk about it now is they say they have run out of space on the ground,” he says. “If you can get decent generation from a fairly small area it is a no-brainer.”
However, he cautions, Italy is not likely to remain a strong CPV market for long. “There aren’t too many new projects being built in Italy at the moment because the feed-in tariff is all but exhausted,” he says. “And the tariff is reducing all the time.”
Most other Southern European markets are looking even less rosy in terms of solar power support right now. In Spain, for example, the newly elected right wing government’s first move on renewable energy has been to stop subsidies on all new projects for an undefined term.
At the same time, though, interest in solar energy is growing in a number of new markets, including South Africa, North Africa and potentially Australia.
There is no reason why CPV might not work in these places, says Keating of Skyline Solar: “CPV works well wherever you have clear sunshine. This is true in a lot of markets.”
However, to date CPV seems to be missing out on the action in many new markets, according to GCube’s Richardson. “We’re starting to see a lot happening in South Africa,” he notes.
“But it’s nearly all conventional photovoltaics, and I think that’s because they are looking to get huge capacity on as quickly and cost-effectively as possible. That works against CPV.”
Similarly, he adds: “There’ve been some big plans in Morocco, Tunisia, Algeria and Egypt, but they seem to be going down the route of CSP rather than CPV or traditional PV. I think that’s to do with the type of companies that are getting involved.
“You’ve got very large, industrial power-generating companies getting involved and probably CSP is more akin to their usual type of generation and so a better fit for them. It leaves CPV a bit out in the cold.”
Another potential attraction of CSP, according to Prior of GTM Research, is that it can generate two or three times as much local employment as flat-plate PV.
Many emerging markets, from India to South Africa, are keen to boost employment with their renewable energy policies, which makes CSP a good bet even though it has a higher levelised cost of energy than other sources of production.
Prior theorises that CPV could play the same card provided projects have sufficient scale. “If they give away big enough contracts in these countries they might go for CPV even if the economics aren’t better,” he says.
If that is the case, then it certainly will not hurt that the CSP heavyweight Abengoa has added CPV to its technology portfolio. One thing that is clear about all the new markets CPV could play in is that it will not be going in alone.
It will face competition from all quarters, and will need all the advocates it can get in order to stand out from the crowd.
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Heliotrop of France is one of the companies keeping the start-up spirit of CPV alive. Here co-founder and managing director Paul Bellavoine offers his view of the market and why he believes long-term value with research and development, with local industry, is becoming more necessary.