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SOLAR ENERGY REPORT

STATE-OF-THE-ART, MARKET DYNAMICS AND OPPORTUNITIES

• Czech Republic

• France

• Italy

• South Korea

• Spain

• U.S.

Coordinated by: Mauro Migliavacca Innovation Norway Milan – Italy

INBDP Solar Energy – September 2009 2

Foreword

Innovation Norway is proud to present, for the first time, a compilation of focused market reports for the solar energy sector in 6 countries across the globe. This report aims to give Norwegian companies - offering products and services in the value chain of solar energy – an overview of market possibilities and limitations in the most relevant markets in Europe and beyond. We hope you will find the report a helpful tool in choosing the right market for your company. If you wish to get more information or advise pertaining to one of the markets in this report, please do not hesitate to contact our offices directly. Our colleagues in Innovation Norway have invested time and efforts in making this report a reality. Thank you! A special thanks to Mr. Mauro Migliavacca in our Innovation Norway office in Milan Italy, who has been in charge of receiving, adjusting and compiling the material. Sunny regards, Line Amlund Hagen Sector responsible - Energy & Environment


Innovation Norway contributors to the project (By order of chapter) Veronika Bogarova Senior Advisor Czech Republic [email protected] Oleg Kosine Senior Advisor France [email protected] Mauro Migliavacca Senior Advisor Italy [email protected] Reidar Grevskott Country Manager South Korea [email protected] Rodrigo Ballestreros Cruz Senior Advisor Spain [email protected] Svein-Egil Nielsen Country Manager California – U.S. [email protected] Lisbeth Smestad Advisor U.S. [email protected]


Table of contents 1. INTRODUCTION............................................................................... 6 2. THE SOLAR ENERGY ......................................................................... 7 3. WORLD SCENARIO ........................................................................... 8 4. MARKETS’ SNAPSHOTS................................................................... 11 5. CZECH REPUBLIC........................................................................... 13

5.1. Acronyms and definitions .......................................................... 13 5.2. General data about Czech Republic............................................. 13 5.3. The Czech Energy market ......................................................... 14 5.4. State of the art of the PV market................................................ 21 5.5. The PV value chain................................................................... 30 5.6. Sector organizations................................................................. 35 5.7. Market dynamics and future developments .................................. 36 5.8. Other technologies of importance: solar thermal........................... 39 5.9. Sources .................................................................................. 40

6. FRANCE........................................................................................ 41 6.1. Acronyms and definitions .......................................................... 41 6.2. General data about France ........................................................ 42 6.3. The French Energy market ........................................................ 43 6.4. State of the art of the PV market................................................ 46 6.5. The PV value chain................................................................... 48 6.6. Sector organizations................................................................. 50 6.7. Market dynamics and future developments .................................. 50 6.8. Other technologies of importance: solar thermal........................... 55 6.9. Sources .................................................................................. 57

7. ITALY ........................................................................................... 58 7.1. Acronyms and definitions .......................................................... 58 7.2. General data about Italy ........................................................... 59 7.3. The Italian energy market ......................................................... 60 7.4. State of the art of PV market ..................................................... 62 7.5. PV value chain......................................................................... 69 7.6. Sector organizations................................................................. 72 7.7. Market dynamics and future developments .................................. 74 7.8. Other technologies of importance: solar thermodynamic................ 78 7.9. Sources .................................................................................. 80

8. SOUTH KOREA............................................................................... 82 8.1. Acronyms and definitions .......................................................... 82 8.2. General data about South Korea ................................................ 84 8.3. The South Korean energy market ............................................... 85 8.4. State of the art of PV market ..................................................... 87 8.5. PV value chain......................................................................... 89 8.6. Sector organizations................................................................. 91 8.7. Market dynamics and future developments .................................. 92 8.8. Other solar technologies of importance ....................................... 95 8.9. Sources .................................................................................. 96

9. SPAIN .......................................................................................... 97 9.1. Acronyms and definitions .......................................................... 97 9.2. General data about Spain.......................................................... 97


9.3. The Spanish energy Market ....................................................... 98 9.4. State of the art of PV market ....................................................100 9.5. PV value chain........................................................................105 9.6. Sector organizations................................................................107 9.7. Market dynamics and future developments .................................108 9.8. Other technologies of importance: solar thermal..........................108 9.9. Sources .................................................................................110

10. U.S. ............................................................................................111 10.1. Acronyms and definitions .........................................................112 10.2. General data about U.S............................................................113 10.3. The U.S. energy market ...........................................................114 10.4. State of the art of PV market ....................................................118 10.5. PV value chain........................................................................129 10.6. Sector organizations................................................................133 10.7. Market dynamics and future developments .................................136 10.8. Sources .................................................................................138


1. INTRODUCTION Within the increased general interest on renewable energies, the solar - mainly photovoltaic technology - has been booming over the last decade and is forecast to confirm this trend in the coming years despite the world economic crisis. This trend represents a tremendous business opportunity for worldwide PV market players. Despite the northern geographical position and the low sun irradiation, Norway has developed a prosperous industry in the PV sector which is ready to catch the market opportunities outside the national borders. By the end of 2008 the Global cumulative capacity was approaching 15 GW and Europe is leading this trend with more than 9 GW, representing over 65% of the global cumulative PV installed capacity. Out of Europe some countries are following this sharp growth: above all Japan, the US and South Korea. A very important driver for the solar market development is the increased consciousness that the industrialized countries’ behaviours have direct responsibility in the climate changes. The new US President Obama has started a new politics against green house emissions and EU Commission stated the 20-20-20 target for the European countries. It is clear the industrialized world is moving towards a common objective: to prevent further climate and ecological damages to our planet. In this scenario the solar energy surely will be one of the main solutions, and in the same time one of the most important economic drivers. The present report takes in consideration 6 of the most promising markets in the world that will probably be the protagonists during the coming years. We hope to provide useful information and a realistic scenario of some of the most interesting markets expected to be business opportunities in the coming years; this report want to be a work tool addressed to all those Norwegian companies interested in internationalization processes in this promising sector.


2. THE SOLAR ENERGY Since researchers Gerald Pearson, Calvin Fuller and Daryl Chapin created the first silicon solar cell in 1954 reaching efficiencies of 4.5–6%, a tremendous jump ahead has been done. Despite it and the great potential of solar power, in 2008 this kind of energy production supplied less than 0.02% of the world's total energy supply.

Source: IEA There are many competing technologies, including fourteen types of photovoltaic cells, such as thin film, monocrystalline silicon, polycrystalline silicon, and amorphous cells, as well as multiple types of concentrating solar power. Any of these can be considered the best one and it is too early to know which technology will become dominant, anyhow since the mid 90s some countries started investing seriously in solar energy production. In the two last decades leadership in the PV sector has shifted from the US to Japan and Europe. First country investing in the solar technologies was Japan that increased R&D funding, established net metering guidelines, and introduced a subsidy program to encourage the installation of residential PV systems. Thanks to this, PV installations in the country climbed from 31.2 MW in 1994 to 318 MW in 1999. It was in the late 90s that worldwide production growth increased to 30%, thanks to Governments’ programmes for funding R&D and for funding residential and industrial PV installations through incentive schemes. Some countries are leading the market growth of the recent years, which has reached almost 15 GW cumulative capacity worldwide in the early 2009. Germany used to be the market leader; until 2007 they had the highest


yearly installed capacity, and still today they have the highest cumulative capacity developed in the last 4/5 years thanks to a very efficient feed-in tariff scheme and to the widespread cultural attitude towards green values. The impressive progression of the photovolatic energy production in 2008 is mainly due to the development of the Spanish market which almost quintupled in one year from 560 MW in 2007 to more than 2,511 MW in 2008, representing more than 45% of the Global PV market. Besides Spain, other countries continued their progression in 2008. Germany continued its growth installing around 1.5 GW, the US installed 342 MW and Japan 230 MW. The Major developments were seen in other countries like Italy (258 MW) and South Korea (274 MW) as well as the emerging of new PV markets such as France (105 MW were installed, 46 MW of which were connected in 2008) and the Czech Republic (51 MW), confirming Europe’s Global leadership in the deployment of solar energy.

Worldwide cumulative capacity

Source: EPIA

3. WORLD SCENARIO According to a research conducted by EPIA (European Photovoltaic Industry Association) in March 2009, which went through a massive data gathering among a highly representative sample of the PV industry, sector associations and energy agencies, 2 scenarios for the future development of the PV industry have emerged: moderate development scenario and policy-driven development scenario.


The Moderate scenario considers a stable situation in the coming years, it does not assume any major enforcement of existing incentive schemes in the considered countries, and is based on the assumption of a ‘business as usual’ development of these markets. The Policy-Driven forecast is based on the assumption of the follow-up and introduction of incentive schemes, such as feed-in tariffs, in a large number of both consolidated and promising solar markets. The study takes in consideration for the two scenarios’ forecast, on a country basis, the historical development of the PV market, the existing support policies, their attractiveness and expected developments, the administrative procedures in place, the national renewable energy objectives and the potential for solar PV.

Estimated market growth

Source: EPIA Global market outlook for photovoltaic until 2013 Considering the single market development in the two possible scenarios (policy driven and moderate), the following table shows the expected yearly installation until 2013 in the most promising markets. The markets considered in the present report are rounded in a red circle.


Source: EPIA Global market outlook for photovoltaic’s until 2013


4. MARKETS’ SNAPSHOTS

Czech Republic Driven by the commitment to reach 8% of energy from RES, the Czech Republic has at the moment the most developed PV market in the Central and Eastern Europe. Existing incentive regimes are highly attractive especially for investment in PV large-scale projects, as the Czech Republic has set one of the highest feed-in tariffs for 2009 PV installations in Europe. Nevertheless, photovoltaic became a growingly interesting business also for small and medium sized investors. Growing interest is seen and also expected from the private (households) sector. Bottleneck in this process can nevertheless be especially discussed decrease of feed-in-tariffs in coming years, together with limited availability of suitable land.

France The French PV market is dominated today by Building Integration PV applications for residential and commercial, due to its favourable Feed-in Tariff for this kind of installation. The introduction of incentive scheme in 2006 brought the following year to a fast development of PV industry that is expected to continue in the near future. Long administrative procedures for permissions and grid connections are the bottle necks to a complete take off of the industry. As an historical player in the photovoltaic industry, France can rely on an important density of companies working in this field.

Italy Italy offers a very attractive incentive scheme, consisting in both net-metering and a feed in tariff system. The actual scheme will fund until 1200 MW, after the achievement of that target a new scheme is expected. The future development of the market will be in function of the coming incentive programme. The signals on this matter from the Government are very positive, at the end 2009 / beginning 2010 is expected the new law that will set the new feed in tariff and will probably simplify the procedures. Within end 2010 is expected the reaching of GW scale of capacity. Until now the bottleneck is the legislation, which remits to each Region the establishment of the local authorisation procedures, creating in this way a not homogeneous market at a National level.

South Korea Due to a favourable Feed-in Tariff, South Korea emerged in 2008 as the fourth largest PV market worldwide. In October 2008 a 500 MW cap on the Feed in Tariff scheme has been introduced, up from 100 MW in 2007. A new feed-in-tariff adjustment is expected starting in 2010. After a slow down in 2009, the market is expected to pick up pace again in 2010, partly depending on the new feed in tariff scheme soon to be announced, and given other economic factors such as the revalorization in the exchange rate of the local currency.


Spain After an extremely fast growth of the PV market in 2008 (almost 2.5 GW in one year) the Spanish Government has introduced a cap which allows only a 500 MW annual market from 2009 to 2011. The cap introduction has obviously slowed the market despite Spain is still the second country for the capacity dimension in Europe. Anyway the 2020 target of 33 GW of installed capacity is expected to be reached, speeding up again in the following years the Spanish PV sector.

U.S. The U.S. ranks fourth in the world for cumulative installed solar electric power. Despite US’ tremendous potential in terms of solar irradiation, the complexity of National organization and the single states legislations create a not homogeneous approach to solar energy. An old grid with insufficient transmission that has seen little investments over the last years is recognized as one of the main challenges for the market development. Anyway some states have adopted efficient solar access laws and other incentive schemes which are pushing the growth of the solar industry that is becoming one of the most promising for the coming years.


5. CZECH REPUBLIC

5.1. Acronyms and definitions FVE – photovoltaic solar plant ERU – Energy regulation Office ICO – identification number of the organisation RES – renewable energy sources CZK – Czech crown CR – Czech Republic FIT – Feed In Tariff BIPV – Building Integrated Photovoltaics

5.2. General data about Czech Republic Area: 78 864 km2 Population: 10,3 million Capital city: Prague GDP growth (2008): 6,0% Inflation (08/2009): 0,5% Unemployment (08/2009) 8.3% Local currency: CZK (Czech crown) Exchange rates (11/8/2009): 1 NOK = CZK 2,9, 100 CZK = NOK 35 1 EUR = ca 25,8 CZK, 100 CZK = 3,8 EUR


• Politically stable, small open economy, dependent on export • Member of NATO since 1999, full EU member since 2004 • Continuously growing market, rapidly converging to developed countries • Developed transport and telecommunications infrastructure, highly skilled workforce • Largest local industries include: metallurgy, auto components, machinery and

industrial goods, consumer electronics • CEE leader in attracting FDI per capita • Convenient geographical location in the centre of Europe – basis for expansion to

further markets and good basis for trading at neighbouring Slovak market

Political situation On January 1, 1993, the former Czechoslovakia was divided into two separate countries - the Czech Republic (the western part) and Slovakia (the eastern part). The proportional size of both countries is about 2:1, measured by population as well as by area. The Czech Republic is a parliamentary democracy. The official head of the country is the President, since March 2008 re-elected Václav Klaus. The political and economic course is, however, determined by the government, led by the Prime Minister (presently Jan Fischer), who is in principle the leader of the strongest political party in the parliament (or the strongest coalition party). The last election was held on June 2-3, 2006, with the voter turnout 64.47%. The leading parties are Civic Democratic Party (ODS) – 35,38% and Czech Social Democratic Party (CSSD) with 32,32%. Preliminary elections to the Parliament are to take place on 5.-6. October 2009. Impact of the crisis The Czech industry is for a large part driven by the automotive industry, and the economy is in the same time strongly connected to export markets, especially the “Western” economies. As the result, the industry output fell ca 22% y-o-y (May). Following to the latest information, this fell had slowed down to 12% this month. According to the economists, the Czech economy remains on track for a 3.1% contraction of real GDP in 2009, as the collapse of export demand and FDI inflows feeds through to a modest contraction of domestic demand. Nevertheless, the economy continues to display resilience in the face of the Europe-wide recession, principally thanks to the relatively stable financial system. This should both limit the severity of the GDP contraction, as well as leaving the country well-placed to take advantage of a global economic recovery.

5.3. The Czech Energy market Liberalisation and deregulation The Czech energy market has been gradually opened since 2002. As of the year 2006 is the market fully liberalised, though the fully competitive environment is still in development. None of the activities in which competition is feasible, i.e. electricity generation, electricity imports, and electricity trading, are regulated on the open market any longer. Only activities having a monopoly nature continue to be a subject to regulation; these include electricity transport from the generatiplant over the transmission and distribution systems to the final customers and also activities related to providing for the energy system´s stability in both technical and commercial terms.


By January 2006 also extensive organisational changes had been finalised in the electricity industry. Under the Energy Act, operators of distribution systems serving more than 90.000 customers were obliged to separate distribution from other licensed activities (unbundling). This in practice affected only the three largest groups to effect unbundling - ČEZ Group, E.ON Group, Pražská energetika (PRE) Group. Thus, on 1 January 2006 the Czech Republic met its obligation of the legal unbundling of the regulated activity of the electricity distribution from the other activities, electricity generation and sale, which are not subject to regulation in integrated power utilities. In 2007 there was established the Prague Energy Exchange, functioning from June 2007. Structure of the Power Sector Power Generation – ČEZ Group ČEZ Group (www.cez.cz/en/home.html, www.cez.cz ) State-controlled player, it is one of the largest electric utilities in Central and Eastern Europe. CEZ group includes all in all over 90 companies, 24 of them foreign companies, among them three distribution companies in Bulgaria, one in Romania and two power plants in Poland. It operates 2 nuclear power plants, 15 coal-fired power sources in the Czech Republic, 3 coal-fired sources abroad, 34 hydro-power plants including 3 pumping stations, 2 localities with wind-power plants and 1 solar- power plant. CEZ a.s. is the main electricity production company. With almost 70 TWh per year CEZ accounts for almost 80% of the country’s electricity generation. The rest of the electricity is produced by independent power producers, mainly in combined heat and power plants. CEZ is also among the three largest heat producers of Czech Republic. Furthermore, it is involved also in mining and processing of by-products. The company was founded by the National Property Fund in 1992 as a joint stock company. 67.61% of the shares are held by the National Property Fund, 21.94 % by institutional investors, 4.96 % by individuals, and 5.48 % by custodians. Next to CEZ there are several other minor players in energy generation: ECK Generating, s.r.o. www.eckg.cz/index01_eng.htm International Power Opatovice, a.s.www.ipplc.cz/en/index.php Dalkia Česká republika, a.s. www.dalkia.cz/edefault.asp Atel Group www.atel.eu/en/group/ United Energy, a.s. www.unitedenergy.cz Multitude of other marginal generators often also engaged in the heat production Distribution – 3 dominant players Eight regional joint stock companies carry out electricity distribution to final consumers. These companies are partly owned by foreign companies, partly (34 to 59 %) by CEZ. ČEZ Distribuce a.s. www.cez.cz/en/home.html ČEZ Distribuce a.s. (consisting of 5 former regional distribution companies) is the legally unbundled entity created by ČEZ-controlled, formerly integrated regional electricity distribution companies.


E.ON Distribuce a.s. www.eon.cz/en/corporate/profile/index.shtml E.ON Distribuce a.s. (consisting of 2 former regional distribution companies) is the legally unbundled entity created by E.ON-controlled formerly integrated regional electricity distribution companies. PRE Distribuce a.s. www.predistribuce.cz Distribution on the capital teritorry and close surroundings (majority is owned by Pražská energetika a.s. PRE http://www.pre.cz/en.html which is controlled by the City of Prague). Several dozen of operators - local distribution systems (cca 280) not subject to unbundling obligations Suppliers ČEZ Prodej s.r.o., www.cez.cz/en/home.html E.ON Energie a.s. www.eon.cz/en/corporate/profile/eon_energie.shtml Pražská energetika, a.s www.pre.cz/en.html The three major suppliers are accounting for about 95% of demand. Electricity market operators Exclusive license granted to public company Operátor trhu s elektřinou (OTE) www.ote-cr.cz. The company is state controlled, responsible for setting up markets for spot trades and balancing, as well as their clearing and settlement, and for registration of executed bilateral contracts. Balancing market Dominated by ČEZ a.s. www.cez.cz/en/home.html, www.cez.cz Transmission system operator Česká energetická přenosová společnost (ČEPS, a.s.) - www.ceps.cz. (Czech Transmission System Operator) is since 1999 responsible for development, management, operation and maintenance of the transport network. It was statutorily unbundled from CEZ. It controls the operation of interconnections, provides real time load dispatching services and is responsible for ancillary services. It is a subsidiary of CEZ. The new law prohibits the TSO from holding a license in any other business activity in the sector. Licenses for transmission are exclusive licenses for the whole Czech territory. Regulatory Body Energetický regulační úřad – www.eru.cz The regulatory body is ERU, the Energy Regulation Authority. It was established in 2001, in compliance with provision of energy law. Financed by the State Budget, its main tasks


are to grant licenses, regulate prices (tariffs setting) and to resolve disputes related to access to transmission or distribution networks. Energy production The electricity production is in the Czech Republic based on the primary resources – mainly on brown coal and lignite (ca 60%) and nuclear power (ca 30%, 2 nuclear power plants). The total installed capacity of the Czech Republic is nowadays reaching 17 677 MW, out of this 10 690 MW in thermal power stations (coal burning), 3 760 MW in nuclear power stations and 2 182 MW in hydropower stations, 891 in CCGT and SCGT and ca 154 MW in renewable resources plants (October 2008) Table 1: Total gross electricity generation in 2008 in GWh in CZ 2007 2008 Share on total

production

Coal PS 56 728,2 51 218,8 61,3%

Gas turbines PS 2 472,9 3 112,7 3,7%

Hydro PS 2 523,7 2 376,3 2,8%

Nuclear PS 26 172,1 26 551,0 31,8%

Wind PS 125,1 244,7 0,3%

Solar PS 1,8 12,9 .

Geothermal PS 0,0 0,0 .

Alternative PS 174,6 1,5 .

Total gross electricity generation 88 198,3 83 517,9 x Source: ERU

The Czech Republic is fully self-sufficient in the energy production, being in the same time one of the largest exporters of the electric energy worldwide (6th position in 2006, ahead of e.g. USA or Russia). According to the experts, the production and the consumption of energy shall equal no later than in 2017. Around 2020 imported energy will be needed. The task for near future ahead are thus twofold – to secure the energy resources, and to diversify them, including involvement of renewable energy resources. The nuclear power is nowadays the most discussed source of energy in the future.


Figure 2: Export and import of the electricity in 2008

Source: ERU

Table 3: Electricity balance 2008 (GWH)

2007 2008

Total gross electricity generation 88 198,3 83 517,9

Total self consumption of generators 6 785,7 6 433,3

Total net electricity generation 81 412,7 77 084,6

Total electricity import 10 203,7 8 520,5

Total electricity export 26 356,8 19 989,1

Total CR import/ export balance -16 153,1 -11 468,6

PSPS consumption 592,4 476,5

Supply without PSPS consumption 64 667,1 65 139,5

Network losses 4 914,5 4 661,8

Domestic net supply 59 752,6 60 477,8

Other power sector consumption 2 070,6 2 013,0

Consumption of high voltage consumers

35 710,1 35 768,1

Consumption of low voltage consumers

22 564,4 23 173,1

Domestic net consumption 59 752,7 60 477,7

Domestic gross consumption 72 045,2 72 049,3 Source: ERU


878

17

1154

114

1214

3 17

1262

1026

1271

1342

1320

2757

1351

23869

1410

2069

77

0

500

1000

1500

2000

2500

2002 2003 2004 2005 2006 2007 2008 2009

Small HPP Solar PP Wind PP

Renewable energy resources The Czech Republic, as the EU member since 2004, had adopted the obligation to increase the share of renewable energy resources on the total energy consumption to 8% by 2010 (and up to 13% by 2020). The current share of renewables moves around 5%, which means that the amount of resources has to almost double within 2 years. Thus, supporting the production of energy (and heat) from RES belongs to current priority areas. In 2005 there has been adopted necessary legislation, supporting use of renewable energy resources. Most potential as to volume production is being seen in biomass burning and hydropower; solar having the least share. Graph 4: Number of renewable energy sources connected to CR distribution network

Source: ERU


Table 5: Estimated share of primary energy production from RES until 2030 in the Czech Republic

0

50

100

150

200

250

300

350

Year

Prod

uctio

n in

PJ

Geothermal (PJ) 0,5 2,2 4,8 12,2 17,1 23,4

Solar (PJ) 0,1 0,8 2,8 5,8 13,4 24,5

Biomass (PJ) 70,5 108,3 161,6 214,1 235,5 246

Wind (PJ) 0,1 2,2 6,3 9,2 13 17

Water (PJ) 8,6 7,7 8,1 8,7 8,8 8,9

2005 2010 2015 2020 2025 2030

Source: Independent Energy Commission

Table 6: Development of the structure of RES energy production Source Production in

2006 (MWh)

Production in 2007

(MWh)

Production in 2008 (MWh)

Share on RES

production

Change 07/08

Water up to 1 MW 333 000 541 204 492 281 13,2 % -9,1 %

Water 1 – 10 MW 631 400 491 641 474 603 12,7% -3,5 %

Water above 10 MW 1 586 330 1 077 493 1057 451 28,3 % -1,9 %

Biomass 728 526 993 360 1 231 210 32,9 % +23,9 %

Biogas 172 589 182 699 213 632 5,7 % +16,9 %

Communal waste 11 260 11 260 11 684 0,3 % +3,8 %

Wind 49 375 125 098 244 661 6,5 % +95,6 %

Solar 170 1 754 12 937 0,3 % +637,6 %

Total production from RES

3 512 650 3 394 224 3 738 459 100 % x

Share of RES on total production

4,9% 4,71% 5,19% x x

Source: ERU


5.4. State of the art of the PV market Current situation Adopting the law no. 180/2005 Coll. in 2005 and its amendment in 2007 had created favourable conditions for investing into renewable energy production with the solar power being most interesting area. Positive impacts to this development have 20 years of guaranteed purchase prices, strong Czech currency that brought a decrease of photovoltaic components prices and improvement of legislative environment for doing business in this field - see further in chapter “Legislative condition”. This resulted in a massive increase in installed power towards the end of 2008 as investors were trying to get a licence that would guarantee them a tariff of CZK 13790 (ca EUR 530) per MWh during 2009, the highest in the EU. Existing incentive regimes in the Czech Republic are highly attractive for investment in PV large-scale projects. Nevertheless, photovoltaics became a growingly interesting business also for small and medium sized investors. Typical businesses engaged in solar business are independent investors, SMEs, large corporations and municipalities. Growing interest is seen and also expected from the private (households) sector. Next to local subjects, the solar market is entered by large investors especially from Germany, Spain, United Kingdom or Netherlands. According to the Manager of one of the Czech investors (Korowatt), he is talking daily to twenty investors, considering to invest in solar plants development. Only in the South Bohemia he was addressed by some 400 people interested in this business. At the moment, the Czech Republic has the most developed PV market in the Central and Eastern Europe, with some 73,1 MW of grid connection installations as of today. Of this, 31,5 MW was installed in December 2008 alone, which is 16times higher than the installed solar power in 2007. New large installations are announced every month. Nevertheless, 90% of the installations are up to 100 kWp. There are at the moment only 18 PV plants above 1 MWe connected to the grid, the largest having 3,368 MWe.


Table 7: The installed PV power in the new member states (2008)

Source: CZ Rea

Table 8: Development of number of photovoltaic plants and installed output on the grid in the CR

9 12 28

249

2069

1214

3,4

54,29

0,12 0,15 0,35

80,59

0

500

1000

1500

2000

2500

0

10

20

30

40

50

60

70

80

90

Number of PV powerplants 9 12 28 249 1214 2069

Installed output (MWe) 0,12 0,15 0,35 3,4 54,29 80,59

January 2005

January 2006

January 2007

January 2008

January 2009

July 2009

Source: ERU


Table 9: Expected development of solar energy production in the Czech Republic till 2030 (in TWh)

0,01 0,06 0,11 0,15 0,20 0,28 0,35 0,41 0,50 0,61 0,72 0,83 0,89 0,98

5,67

0,00

1,00

2,00

3,00

4,00

5,00

6,00

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2030

Year

Source: Independent Energy Agency

Figure 10: Location of largest PV plants in the Czech Republic

Source: ERU


Geographical conditions The yearly amount for sun hours in the Czech Republic is according to Czech Hydrometeorological Institute moving between 1331 – 1844 hours. The utilisable photovoltaic potential is the 3400 – 4100 MJ per 1 sqm of flat area, that is 950 – 1140 kWh. Taking in the consideration the usual efficiency photovoltaic cells and inverters it means, that from 1 installed kWh in the system is possible to obtain in average 800 to 1250 kWh per year. Figure 11: Average annual total of global radiation

Source: CHMI

The least sunshine is on the Northwest part of the country, in direction to south-east the number of sun hours is growing. The locations may usually vary by +-10%, in the areas with polluted atmosphere or frequent inversions it is necessary to calculate drop in sunshine intensity of 5-10%. Mountain areas from 700 – 2000 metres account for extra 5% of sunshine. The most interesting areas for building a plant are locations in South Bohemia and South Moravia. Ideal districts are Vimperk, České Budějovice and Kaplice. Legislative conditions The most important laws and regulations adopted for supporting the development of photovoltaics are the following:


Act no. 180/2005 Sb. Act about the Support of production of energy from renewable resources. Its main contribution is:

• Stabilization of the business environment in the field of RES • Assuring the continuous increase of RES share on the consumption of the primary

energy resources • Contributing to sustainable exploiting of resource and sustainable development of

the society • Creating conditions for fulfilling the obligation of 8% share of RES in CR by 2010

and further increase of this share Price decree of the Energy Regulation Office No. 8/2009

• Stating yearly feed-in tariffs and green bonuses for individual RES. Regulation No. 150/2007 Coll.

• Stating, that feed-in tariffs and green bonuses are applicable for the entire operation life of the power generation unit.

• Stating, that the feed-in tariffs shall be adjusted yearly according to the index of industry prices, the type of RES generated and the year of putting the power generation unit into operation.

Regulation No. 475/2005 Coll. Amended by 364/2007 Coll.

• Changing the expected life-time period of photovoltaic power stations from original 15 to current 20 years

Tax law no. 586/1992

• Imposing a tax relief on the income from RES operation for 5 years for private persons (not companies)

Business conditions Incentive schemes (feed-in tariffs) • FEED IN TARIFFS In order to reach the stated targets, the legislative conditions for feed-in tariffs have been adjusted to developed EU countries and the Czech Republic has set one of the highest feed-in tariffs for 2009 PV installations in Europe. The producer has an option of choosing between feed-in tariffs and green bonuses. The prices are stated yearly by the ERU (Energy Regulation Authority, www.eur.cz). The feed-in tariffs for solar energy for 2009 are: 2009: CZK 12890 per MWH (5% decrease from 2008) (EUR 462,50, NOK 4110 at the exchange rate of 2.2.2009)* In 2007, the amendment extended the period for which the prices are guaranteed from 15 years to current 20 years (valid as of 1. 1. 2008). Tariffs are adjusted yearly by inflation (2-4%) and the maximum depreciation on the tariffs is set at 5% yearly.


• GREEN BONUS There is also introduced a system of green bonuses for a case the electricity is consumed at the location of production, or sold independently on distributors. Green bonuses are paid on top of the electricity price, which is paid by the utility. The electricity price is slightly lower than the market price, as the energy supply is intermittent. The producers can set up their individual contracts with suppliers and have the option of switching between these forms of subsidy once a year. The green bonuses are the only compensation for those investors that intend to consume the produced electricity themselves. 2009: CZK 11910 per MWH (EUR 427,30, NOK 3798 at the exchange rate of 2.2.2009) Table 12: 2009 Feed-in tariffs for SOLAR ENERGY per MWH Capacity/starting date of operation Feed-in tariff CZK

In MWh Green bonus CZK

MWh

Up to 30 kW/ from 1.1.2009

12890 (EUR 462,50)

11910 (EUR 427,30)

From 30 kW/ from 1. 1. 2009

12790 (EUR 458,9)

11810 (EUR 423,80)

1. – 31. 12. 2008 13730 (EUR 492,6)

12750 (EUR 457,5)

1.1. 2006 – 31.12. 2007 14080 (EUR 505,2)

13100 (EUR 470,0)

Before 2006 6710 (EUR 240,8)

5730 (EUR 205,6)

Source: ERU

Tax advantages The stimulation for investment is further supported by a tax break on profits generated from PV installations in the first five years of operation (in the calendar year of starting the operation plus next 5 years) on all incomes that come from RES activities. Similar condition exist e.g. in Germany, Italy, Greece and other EU countries. Investment costs and ROI Referring to the information provided from people involved in this business, in the current Czech conditions, the installation of 1 MW of solar capacity costs ca CZK 100 – 105 million (NOK 33 - 35 million). The return of investment moves in average between 8 – 10 years, which is actually half of the time for which there is a state quarantine for purchasing the energy at stated feed-in tariffs and green bonuses.


Table 13: Comparison of feed-in tariffs for newly connected solar plants (after 1.1. 2009)

Source: CZ REA Available subsidies The main mean of subsidising the production of solar electricity is based on the feed-in tariffs and tax extemption (see previous chapter). Apart from this only subsidies for photovoltaics are from the European Structural Funds. PV electricity producers receive subsidies from the European Structural Funds. Operational Programme Environment allocates grants from the Cohesion Fund for projects in the field of renewable energy. The Cohesion Fund is a European Union fund which provides financial resources to its member states for country-specific subsidy programmes aiding underdeveloped regions upon application. PV plants may be subsidized up to 20% for ground installations or up to 40 % of the eligible costs of BIPV and roof-top installations. Maximum subsidy can not exceed 50 million CZK (about 1,785 million EUR). Organizations eligible for the support are: municipalities, NGO`s, regions of the Czech Republic, Churches, public universities, etc. The first call for applications was open from 4.5. – 30. 6. 2009. Photovoltaics could be subsidized only if building integrated (roof-top or facade installation). Individual municipalities may have specific programs for supporting solar systems in their area.

CZ

SK GERMANY

AUSTRIA


Procedures for authorisations Foreign companies and business may carry on business in the Czech Republic in two ways: I. As a Czech company A foreign legal entity (incorporated outside the Czech Republic) establishes a legal entity (a company) having its registered office in the Czech Republic. This company will then apply for a licence and take all other steps in accordance with the Energy Act and generally applicable legal regulations like any other Czech legal entity. II. As a local organisational unit of the foreign company This is a case when a foreign legal entity sets up its “organisational component” in the Czech Republic. This way of undertaking however brings further administrative burden as to legalisation (apostilling) of documents. Also, organisational unit is not a legal entity in its own right, which may further limit is actions. Therefore, for doing business in the Czech Republic it is recommended to establish a Czech branch, or undertake in cooperation with a local partner. The setting up process then contains the following steps • Establishing a company, organisational unit or finding a local partner • Feasibility study (economic analysis, technical analysis, distribution network analysis,

legal and tax aspects • Project documentation • Building permit • Energy audit • Energy review (appraisal) • Static review (appraisal) • Request for grid connection • Request for licence for operating FVE Building permit Building permit is issued by the Building Authority of the respective Municipality. In case of solar plants the procedure is complicated by the fact, that according to local legislation, solar panels are considered a production unit, thus may only be constructed on the land determined for production in the Area plan. List of respective Building authorities can be found here http://www.statnisprava.cz/rstsp/ciselniky.nsf/i/d0061, the form here http://www.form.cz/f_stavba/stav_pov.pdf Request for a grid reservation and connection Producer of solar energy has to receive the grid reservation and connection from a distribution company. Majority of requests is handled by two dominating distribution companies - EON and CEZ Distribuce that are providing these in their regional locations. Producers are sending a “Request for connection” to these companies. The forms (in Czech) can be found on the following links For EON: http://www.eon.cz/file/cs/distribution/forms/firms/EON-Zadost_o_trvale_pripojeni_NN_PODN.pdf


For CEZ: http://www.cezdistribuce.cz/edee/content/file-other/distribuce/formulare/formd200903_zadostopripojenivyrobnyeletrinykds_web.pdf Table 14: Current state of requests for connection to the grid (GW, by CEZ) –

March 2009

Refused, Approved, In Progress

Source: CEZ Request for a Licence for undertaking in the energy business The licence for producing the energy is issued by the Energy Regulation Office (www.eru.cz). Information for applicants in English can be found at the following link, forms (in Czech) here http://www.eru.cz/dias-read_article.php?articleId=222 Moreover, in a case of new power plants, ERU also has to be informed about what type of subsidy (tariff or green bonus) the producer will use at least a month before the start of energy production. Existing power plants can change the use of subsidy (from tariff to bonus and other way round) every year as of January the 1st (to be announced until November 30th). According to statistics presented by ERU, in 2008 75% of producers were engaged in the regime of green bonuses. Resources above 30 MW The power generation plants with the installed output 30 MW and higher are a subject of authorisation, provided by the Ministry of Industry and Trade. The authorisation is granted maximally for 5 years (can be prolonged) and cannot be passed on another subject. www.mpo.cz


5.5. The PV value chain

Investors – project developers – energy suppliers There is a plenty of newly established local project developing companies, in many cases operating with capital e.g. from Germany or Italy, that are expecting growth in demand for PV installations in this region. The roles of individual parts of the value chain mostly overlap – for example, some suppliers of equipment are active also as project developers, or investing into own solar plants. Some wholesales of the components are offering services of consultants or solar project developer. Also most project developers invest in own solar plants and become energy producers, not only developing a project on a turn-key for the client. Therefore, the separation into individual value chain groups is only rough, combining the role of investor, project developer and energy producer. It is unfortunately not always possible to identify the investment capital standing behind individual companies, especially in a case of joint-stock companies. As there are hundreds of solar plants put in operation every year, herewith are mentioned only the large investors we have identified: TGI Solar Group (www.tgisolargroup.com, US) In October 2008, American TGI Solar Power Group and European Estate Capital (www.eecsunrise.cz), a regional solar developer, have announced plans to collaborate on a 10 MW power station to be located in the Czech Republic. No further information obtained. Econcern (www.econcern.nl, the Netherlands) In summer 2008 Netherlands Company, engaged in various renewable resources activities, had announced its negotiations with a non-specified Czech partner, leading to sales of solar panels of 40 MWe and development of solar plant in South Moravia. There has however not been any official information about such a project since. Scatec Solar (www.scatec.no, Norway) Norwegian company, active on the Czech market in cooperation with its local branches Signo Solar s.r.o. (www.signosolar.cz) and Scatec Solar s.r.o. are currently developing a solar plant in the South Moravia. According to the press information, this investment is realised in cooperation with the Japanese investment company Itochu (10% share in Scatec) . In total Itochu aims to build 2-3 solar parks in the Czech Republic. Currently is about to open a solar plant in Hrusovany nearby Pilsen (Western Bohemia). Enfinity (www.enfinity.cz, Belgium) Belgian company Enfinity had signed a 5 years exclusive contract with the developer VGP (www.vgp.cz) for placement of photovoltaic panels on the roofs of industrial and logistic parks in the Czech Republic. Enfinity is planning to install panels up to 10 MW of output, to be connected to the grid by the end of 2009. JUWI – www.juwi.cz Owned by German JUWI Holding AG, engaged in renewable resources investment and project development.


Plants: FVE Lukavice – output 1,6 MWe In development : FVE Polešovice – output 1,56 Mew According to the company resource company is planning to put in operation some 10 MWe till the end of 2009. Buzzing Lines – www.buzzinglines.cz Company Buzzinglines shall build three solar plants with the output 0,6 – 1,5 MW by the city Čehovice from 0,6 do 1,5 megawatt, to be put in operation in 2009

HiTechSolar s.r.o. (www.hitechsolar.com)

Connection with companies Solinvest s.r.o. (www.solinvest.cz) and HiTechMedia Systems s.r.o.(www.hitechmedia.cz) Plants: FVE Ostrozska Lhota (2 blocks)

Installed power 702 kWp + 920 kWp Panels: 5270 - monocrystal 175 Wp

Larger part of the project investment was remitted from a long-term loan provided by Commercial Bank while the remaining little part the investor reimbursed from their own financial sources. A grant by OPPP (Operational Program Renewable Resources) contributed significantly to even better economy of the entire photovoltaic project. Energy 21 a. s. – www.energy21.cz Majority owner of shares – Natland Investment Group (www.natland.cz) Energy 21 is a Czech investment company specialising in renewable energy resources. The company is concentrating on the construction and operation of solar power plants with a long-term company’s goal is to become one of the main producers of the "clean energy" on the European market. Energy 21 projects have been financed with a domestic capital, by Czech bank houses and investors. In the short term Energy 21 intends to enlarge its projects in photovoltaic to roofing systems. In the medium-term it plans to enter other markets and to enlarge its portfolio of sources used and of activities within Europe. Company has a share in CE solar company (www.cesolar.cz), engaged in building and operating solar power plants. Finished FVE Dívčice - output 2,5 MWe, FVE Krhovice – output 0,5 MWe , FVE Velký Karlov – output 0,4 MWe, FVE Vojkovice – output 0,6 MWe, FVE Hrádek – output 1,1 MWe, FVE Jaroslavice – output 0,65 MWe In development FVE Jaroslavice II – output 0,49 MWe, FVE Protivín – output 3,5 MWe, FVE Cvrčovice – output 0,14 MWe, FVE České Velenice – output 2,3 MWe, FVE Hrušovany – output 2,12 MWe Korowatt s.r.o. – www.korowatt.cz Company Korowatt was established in 2006 with the aim build and operate photovoltaic systems. Cooperates closely with a company Ekotechnik Praha (www.ekotechnik.cz). Plants: FVE Bušanovice 1 - output 668 kW (korowatt.cz/reference.php#busanovice-1) FVE Bušanovice 2 - output 668 kW (korowatt.cz/reference.php#busanovice-2)


Sluneta s.r.o. – www.sluneta.cz Company Sluneta was established with an aim to be active in building and operating photovoltaic systems and plants. Company is also trading components, and is certified ISO 9001 and 14001. Plants: Sluneta I - output 670 kWp (sluneta.webnode.cz/products/reference-1/) Sluneta II – output 2,1 MW (sluneta.webnode.cz/products/reference-2/) Solar Systems, s.r.o. – www.solarsystems.cz Solar systems, s.r.o. (Ltd.) is the general supplier of photovoltaic solar power stations built at free areas and in industrial zones, photovoltaic solar systems for family houses and villas and photovoltaic roofing systems for industrial halls and logistical centres. Company provides complex turn-key service, e.g. from the first consultation without engagement to the complex realization of photovoltaic systems and service. Finished: FVE Měnín – output 1,5 MW In development: FVE Sudslava

FVE Moravský Písek 1,3 MW FVE Osek u Rokycan 3,65 MW

FVE Plátěnice 100 kWp REN Power CZ (Czech coal) – www.renpower.cz The main activity of the company is utilising renewable resources for energy production. Primary areas are development of photovoltaic plants and wind power plants development. Company has a majority share in the local photovoltaic panel producer; company FitCraftProduction a.s. (www.fitcraftproduction.cz). I the future shall be added operation of small hydropower plants and biomass plants. On 19th March 2009 the company was integrated into the large group Czech Coal (www.czechcoal.cz) Plants: FVE České Velenice, output 1,23 MW FVE Vimperk, output 1,940 MW Another 1522 kW in smaller installations RAY-ON a.s. – www.ray-on.cz Plants: In development

FVE Chabařovice-Vyklice, output 4.8 MW (ray-on.cz/ukazky-realizaci/ceska-republika/projekt-ftv-e-vyklice/)

FVE Chabařovice III – output 2,4 MW (http://ray-on.cz/ukazky-realizaci/ceska-republika/projekt-ftv-e-za-trati/)

Suppliers There are plentiful suppliers of components on the Czech market, both local, but mostly international. The market is very dynamic and flexible as to offering components from various resources and producers. Foreign suppliers are usually selling via dealers in the Czech Republic, or in case of larger projects delivering directly project installers. It is not a problem to purchase the components wherever in the world for a specific project. Due to the short existence of the solar market, the market shares are not known. German companies, being the neighbouring market are among the most active suppliers. Large part of supplies is


coming also from China (while many companies are established in Germany too), India or also Indonesia.

Silicon ingots and wafers ON SEMICONDUCTOR CZECH REPUBLIC, s.r.o. (www.onsemi.cz). Silicon wafers are produced in the Czech Republic by the company ON SEMICONDUCTOR CZECH REPUBLIC, s.r.o. (US) Main activity of the company includes the production of silicon wafers, production of chips, research and development, designs of integrated circuits. ON Semiconductor Czech Republic is also a manufacturer of silicon wafers and single crystals for the semiconductor industry. The silicon wafer is a basic material for manufacturing of the semiconductor components, continuing the tradition of Czechoslovak companies Tesla and Terosil. Company has also its own research and development centre.

Photovoltaic panels and modules There are two local producers of photovoltaic cells Solartec s.r.o. (www.solartec.cz) Czech producer of solar cells from monocrystaline silicon and modules, yearly capacity ca 5 MW Fitcraft Production s.r.o. (www.fitcraftproduction.cz) Czech company manufacturing solar panels, yearly capacity ca 15 MW. What is more, the following companies have production facilities directly in the Czech Republic: Schott AG (www.schott.com) Company Schott has four production companies in the Czech Republic, focused on flat glass, glass tubes, lighting and photovoltaic cells. Production capacities for photovoltaic cells - SCHOTT Solar CR, s.r.o. - have been recently increased by another 400 people, as the local production shall supply the whole European market. Production capacity ca 200 MW. Kyocera Solar Europe (www.kyocera.com) In 2005, Japanese technology group Kyocera Corporation has increased its manufacturing capacity for solar modules by opening its first European solar production plant in Kadan, a northern town of the Czech Republic (Kyocera Solar Europe, s.r.o. Czech Plant). The plant supplies Czech and other European markets. The production capacity is ca 100 MW). O&M Solar (www.omsolar.net) Company O&M Solar has officially opened the production in Olomouc, Czech Republic in August 2006. Using components produced by Czech Republic Onamba company, company is focused on completing solar photovoltaic modules. The main investor if the Japanese company Onamba. Production capacity around 30 MW). Other brands offered on the market via distributors are e.g.


Sanyo, Sharp Europe, Suntech, Jetion, Sunpower, Würth Solar, Heckert Solar, BP Polar USA, Schletter, Solea, Solon, Evergreen, Solarwat, REC Solar, Signet Solar, SchottSolar, Solarworld, Sovello, Mitsubishi Electric, Solara, Suntech, DO solar, Moser Baer (India), Titan Solar (India), Solarfun (China) and others.

Inverters Fronius www.fronius.com – operating on the market since 1991, having local production facilities and currently is building a new distribution and sales centre in Prague. Other brand sold on the market via distributors and wholesales: Kostal, Solutronic, Fronius, SMA, Kaco, Sunways, Power one, Mitsubishi Electric.

Turn-key installations / system integrators The boom of photovoltaic installations was followed by the boom of companies engaged in turn-key installations and system integration. Currently, there are about 250 of such companies. The scope of their services varies, but usually, such companies offer the full consultancy starting from the feasibility study and helping with permissions process up to selection of supplier and installation, grid connection, operation and maintenance of the solar plant. They are frequently engaged also in supplying solar collectors for heat generation. Many companies develop both their own plants and customer-made plants. Again, there has not been profiled market leader on such a short time.

Research and development In 2008 a Brno based company Energ Servis a.s. (www.energservis.cz) had put in operation a “solar incubator”, located in its facilities. In cooperation with Masaryk University, the task of the incubator is a research of various photovoltaic systems.

Financing Banking sector Projects are financed by the own means of the developer, but more frequently there are external finances needed. Among the renewable resources, long term loans for photovoltaics are the most frequent loans provided – solar plants up to 30 kW are taking 85,2% share on the total RES loans, while above 30 kW 9,3%. The remaining alternatives (wind power, hydro plants, biomass and biogas) account together for some 4,5%. After a period of hesitation, banking sector prepared a financing products aimed at utilising renewable energy resources. Most of local banks are ready to provide necessary loans for financing solar plants. Nevertheless, among them these banks have the most developed know-how for providing financing of PV projects: Komerční banka (Commercial Bank) www.kb.cz Česká spořitelna – www.csas.cz GE Money bank – www.gemoney.cz


Raiffeisen Bank – www.rsts.cz CSOB – www.csob.cz Venture capital / private equity J&T Group (www.jtfg.com) According to their own presentation, the J&T GROUP is one of the most active investor groups in the Czech Republic and Slovakia. The Group’s dynamic development and other growth plans are aimed at further strengthening the position of J&T in Central Europe and winning an important position in Eastern European markets. Corporate investments, made especially in the energy industry and engineering is one of group focus areas. Profi-Holding (www.profi-holding.cz) Profi Holding a.s. is a financial group, in which portfolio is engaged in investments, economic consultancy, crisis management, photovoltaic power plants, renewable energy resources, ecology, transport, horeca sector.

ECO Finance (www.ecofinance.cz) Consultancy and investment group, focused on the renewable energy projects. There is also developing a concept of public solar power plants, where the project is co-financed by shares of citizens.

Roof stock-exchange – www.stresniburza.cz Czech company, providing complex services to solar projects developers, especially on the roofs. As the first on the market came with an idea of web-based „roof stock exchange“ for placement of solar panels (www.stresniburza.cz)

5.6. Sector organizations Despite its tremendous development, the solar business is a brand new area, existing in fact on a more intensive scale for 2 years. Therefore, the network, associations or lobby groups for solar energy have not really developed yet. Rather, there are associations focused on renewable energy resources as such: Czech RE Agency (Czech Renewable Energy Agency) www.czrea.org A non-profit company, engaged in support and development of renewable energy resource, RES project development, and cooperation with other Czech and European associations in this field, providing information and publishing activities. The Czech Environment Management Center (CEMC) – www.cemc.cz An association of Czech experts and businesses in the field of industrial ecology. The main aim of spreading knowledge about environmental management within the Czech industry, offering technical know-how: consultation in technologies and investments Calla – calla.ecn.cz Association for Preservation of the Environment. A citizens’ environmental association founded in 1991. The mission of Calla is to assist people in their efforts of protection of


the environment, to contribute to the conservation of valuable ecosystems in southern Bohemia and to support the development of renewable energy resources. SEVEn – www.seven.cz SEVEn, Středisko pro efektivní využívání energie (The Energy Efficiency Center) was established in 1990 as a not-for-profit consultancy firm. Its activities are aimed at overcoming the obstacles preventing the effective use of the potential energy savings in the practical life of households, industry, commerce and the public sector. Ekowatt - www.ekowatt.cz Energy, economy and living environment consultancy companies. It was established in 1990 as a non-profit organization Liga ekologických alternativ (League of ecological alternatives) - www.lea.ecn.cz The League of Ecological Alternatives, a civic association, is involved in promoting and advertising renewable energy sources, bio-farming, bio-gardening and sustainable forms of land use. The league has been in operation for eleven years, during which time it has provided the public with both information and assistance on the subjects above. The league provides workshops, seminars, discussions, lectures and excursions; it also serves as an advisory body. The association is organising the “Solar league”, the contest of municipalities utilising the solar energy. Czechoslovak Society for Sun Energy - www.csvts.cz/csse/dalsi.htm A national section of ISES (International Solar Energy Society, www.ises.org) is organising professionals from both the Czech and the Slovak Republics. As a main activity, the association is focused on providing information to its members, organising seminars and conferences, publishing articles, opposition and comments proceeding and new RES legislation, translation of new norms. Eurosolar – www.eurosolar.cz - Civic association, operating and information server and focusing on education and information. Linked to the European Association for Renewable energy, www.eurosolar.de)

5.7. Market dynamics and future developments The Czech Republic is the only country in the CEE region, which at present has a Green Party in the government coalition. The government made it clear, that investment in renewable energy is high on its agenda. Given the natural conditions of the country and the support of the government the PV market is expected to grow over next years. Moreover, the Czech Republic is putting the full forces to reach the commitment of reaching the 8% share on the renewable resources production by 2010, 3% up from the current ca 5%. It is actually expected, that Slovakia will pass the new legislation in 2009 as well, and will become and equally interesting market too, allowing investors active on the Czech market extend their activities on neighbouring, closely connected market. The following graph illustrates, that the expectations as to installations of new PV plants are positive, despite the necessity to enhance the capacity of the electricity distribution network around 2015 – 2016, where the current capacity will be fully used for all RES.


Table 15: Expected development of the installed output of PV plants in CR until 2020 (in MW)

Source: EGU Brno

On the other hand, there are numerous problems connected to development of this business, especially as regards large installations. The bottlenecks, which are to be taken in consideration while preparing a PV plant investment, are: Building permissions One of the bottlenecks lies in the Building Law. The power plant is considered a production unit and thus, according to current legislation, it is possible to place a solar power plant only on the area, which has already been regulated for such a use in an "Area plan". If this is not a case, the change of the "Area plan" in favour of building a plant is a long-term process, which may take up to 1,5 years of valuable time. This frequently discourages interested investors, as they have no guarantee that the conditions will remain the same. Availability of suitable land So far, larger solar power plants are built at suitable free land, which is becoming scarce, or overpriced. The price of the land suitable for building the solar plant (with a building permission for the plant) is currently moving around 600 CZK/sqm (ca NOK 200), and is often a subject of speculation. Thus, searching for a suitable land can be rather demanding and long-term task. One of the ways how to tackle this problem is to rent the suitable land from the municipality instead of buying it, or to address the municipality as a co-investor (in total there are about 6000 municipalities of all sizes in the Czech Republic). Last but not least, it is often rather problematic to find a land with the needed connection to distribution network. Therefore, investors are increasingly turning their attention to industrial, agricultural and former military brownfields (barracks or fields) and airports. Czechinvest, the Czech agency supporting the inflow of foreign investment is registering some 3.000.000 sqm in the Czech Republic on the roofs of industrial property, and there are also attempts to create a “roof stock exchange” as mentioned earlier.


Placing panels on the roof are the future solution to availability and price of land, as well as to building permissions (see further), and last but not least, brings simpler connectivity to the grid. Similarly, there also exists the opportunity to build a plant without and permission from the authorities by using photovoltaic foils. Feed-in tariffs The solar energy in the conditions of the Czech Republic reaches only small time exploitation of the installed output in comparison to classical resources. If the support, namely feed-in-tariffs shall be limited, the attractiveness of such projects for investors would be decreased substantially. At the moment, feed-in-tariffs cannot be lowered by more than 5% yearly. The expectations for 2010 FIT rates have not been published yet, however, there will be kept the differentiation between installations up to 30 kW and over 30 kW; the difference between the categories shall be with the respect to lower investment costs higher (currently CZK 100 per MWh). Also, recent interview with a representative of ERU had revealed intentions to amend to 180/2005, allowing larger decrease for FIT for new installations since 2011 or 2012. On contrary, other voices speak about strong influence of half-state owned CEZ, having its business plans focused also on photovoltaics, thus using its lobbying towards keeping the FIT on the highest possible level too. Prices of photovoltaic panels According to the comments, the trend of decreasing prices of photovoltaic panels, apparent in the last 10 years may be replaced by the stagnation of prices, reflecting the steep increase in the demand.


5.8. Other technologies of importance: solar thermal Apart from photovoltaic systems, using of the solar power is in the Czech Republic growingly utilised for heating (hot water). The bellow graph illustrates the expected development of utilising solar energy for heating up to 2030, indicating the growth of more than 20times. The demand of solar collectors is growing, opening a market for new suppliers, installation companies. Table 16: Expected development of utilising solar energy (heat collectors) up to 2030

Source: Independent Energy Agency

This growth is supported not only by the growing prices of energies, but also a current possibility to obtain a state support for installing the solar collectors within newly introduced program “Green for savings”. This program is aimed at households and provides financial support for house isolations and utilising RES for heating and hot water preparation. For this year, the program allocated 10 billion CZK.


5.9. Sources CZ REA (Czech Agency for Renewable Energy Resources) – www.czrea.cz ERU (Energy Regulation office) – www.eru.cz Ministry of Environment – www.mzp.cz Ministry of Industry and Trade – www.mpo.cz NEK – Independent Energy Commission – www.vlada.cz EGU Brno – www.egubrno.cz CEZ – www.cez.cz Daily newspapers and e-zines (www.idnes.cz, www.ihned.cz) Professional Magazines and e-zines (www.profit.cz, www.alen.cz, Professional Internet websites: www.enviweb.cz www.solarniliga.cz www.estav.cz www.ecn.cz www.stavebni-forum.cz


6. FRANCE

6.1. Acronyms and definitions Public bodies: ADEME: Agence de maitrise de l’énergie / Energy saving body www.ademe.fr CEA: commissariat à l’énergie atomique / Atomic research body www.cea.fr CNRS: Conseil Nationale de la recherche Scientifique/ French research body www.cnrs.fr DIDEME: Direction de la demande des marchés énergétiques / Direction for energy markets demand : French body for controling energy production http://www.industrie.gouv.fr/contacts/sc_dideme.htm DRIRE: Direction Régionale de l’industrie / French body in charge of the industry. http://www.drire.gouv.fr/ ERDF: Electricité reseau de France / Electricity grid http://www.erdfdistribution.fr EDF AOA: EDF agence d’obligation d’achat / EDF PV power purchase entity. EPIA: European association for PV industry. http://www.epia.org/ ESTIF: European assoiation for Solar Thermal Industry http://www.estif.org/ INES: National Institute for Solar energy. http://www.ines-solaire.com/ IRDEP: Research institute dedicated on PV development http://www.enscp.fr/spip.php?article221 InvestinFrance: French body in charge of promoting investment in France. http://news.investinfrance-nordic.org/old/5/#contact QualiPV: appelleation for quality PV installers. http://www.qualit-enr.org/qualipv SER: Syndicat des énergies renouvelables / French association for RES. www.enr.fr SOLER: Part of the SER : group for PV industry. Tep: tonnes équivalent pétrole / Tons petrol equivalent Norms and regulations: BBC: Batiment basse consommation / Low consumption house. BEPOS: Batiment à énergie positive / House providing energy. BIPV: Building integrated PV.


6.2. General data about France The Republic of France has a population of more than 64 million people. It includes four overseas departments in Martinique, Guadeloupe, Reunion and French Guiana. Metropolitan France in Western Europe accounts for just over 80 per cent of the territory and 96 per cent of the population of the French Republic. As a very centralized country, main French regions are Paris area by far, followed by Lyon area, and Nice area according to a Eurostat 2005 survey shown underneath. (Regional GDP, parity equivalent)

France is an influential member of the European Union. It attaches a high priority to European integration. France held the EU Presidency 1 July-31 December 2008. France is the world’s sixth largest economy. It is a leading industrialised country with a mature and sophisticated market economy. Per capita GDP in 2007 was US$42,034 and was estimated to rise to US$48,012 in 2008 (IMF/EIU forecast). GDP is dominated by the services sector (70 per cent). Aerospace, automobile and agriculture industries also contribute significantly to GDP and are, together with tourism, significant export earners.


Two thirds of France’s trade is with other European countries. Its major trading partner is Germany. It is the world’s second largest agri-food exporter, and the world’s foremost tourism destination. A substantial number of French multinational companies dominate market share across a broad range of global sectors. In 2007, France was ranked third for attracting foreign direct investment (behind the US and the UK). Paris is a leading financial market in the Eurozone and is ranked second in the world for international financial institutions with 46 per cent of market capital held by foreign investment institutions. France has a long tradition of state intervention and participation in the private sector. This has continued under the Sarkozy administration which, despite its commitment to economic reform and modernisation, has continued to promote “national champions” and extend state support to failing domestic companies. France has a relatively productive labour force and recent reforms as the traditional 35 hour working week have introduced new flexibilities into the market. French commentators suggest one reason for France’s relatively high labour productivity rate is the high level of training – seven percent of France’s GDP is spent on education and training. France is ranked second in Europe for the percentage of employees who hold a scientific or technical degree. France spends 1.5 per cent of total GDP each year on employees’ training programs and apprenticeships. The French Government has presented revised 2009 budget figures based on a more pessimistic outlook than previously forecasted for the French economy, but still predicting a return to growth in 2010.

6.3. The French Energy market France is the most energy independent of the G8 industrialised countries owing to its heavy reliance on nuclear energy. Over 80 per cent of electricity is generated by nuclear power plants. In 2007, for an electricity production of 136 Million Tep (tons petrol equivalent), 115Mtep were coming from nuclear plants, 20 from renewable energies and waste. The French nuclear lobby is very strong and new technology and construction of new nuclear plants is pushed by the main actors. Besides, lots of public funding goes to research in this specific domain. Focusing on renewable energies, hydropower accounted for 5,0Mtep, wood and wood waste 9.1Mtep, urban waste for 1.2Mtep and other renewable energies for 2.7Mtep. In this “other” sub-segment, bio fuel accounted for 1,17Mtep, heat pumps for 0,59Mtep, windmills for 0.35Mtep, Biogas for 0,24Mtep, geothermal for 0,13Mtep and Solar for 0,04Mtep.


The opening of the French electricity market has gone through several stages:

- From June 2000, eligibility of all sites with annual electricity consumption more than 16 GWh.


- From February 2003, eligibility of all sites with an annual consumption more than 7 GWh.

- From July 2004, eligibility of all businesses. - From July 2007, eligibility for all consumers, including residential customers.

At 31 March 2009, 35 million sites are eligible, which means about 4312 TWh of annual electricity consumption. Customers can conclude different types of contracts:

- Contracts at regulated tariffs (offered exclusively by incumbents) - Contracts “market offer” (proposed by the incumbents and the alternative

suppliers). At the end of March 2009, 68% of the electricity consumption was made with regulated tariffs through the historical power provider EDF, (white bar), 23% of the electricity consumption was made through “market offer” tariffs through the historical power provider EDF ( blue bar ), and 9% through alternative suppliers( green bar ). The penetration rate of alternative suppliers is the biggest for large sites ( >181 Twh ) where penetration rate is about 18%. This is mainly due to the fact that the market has been opened only few years ago, and the impossibility (that has disappeared now thanks to a new law) to come back on regulated tariffs for those who subscribed to a market offer. With the end of regulated tariff set to 2010, the market will then be more volatile.


6.4. State of the art of the PV market France benefits from the 5th solar resource in Europe. In average, 10sqm can produce each year 1031kwh, a figure that varies from 900kwh in the north east of France to 1300kwh in the south east. Overseas this represents 1450kwh. Theorically covering south sides of all French roofs should be enough to provide the country electric power consumption.

Since 2004 and the creation of the first tax cut, the market has been able to rely on a strong growth. The raise of this tax cut to 50% in 2005 but above all the creation of feed in tariffs signed in July 2006 allowed the market to boom. 2007 was the year of the take off for the whole industry with 35MW of installed capacity more than what had already been installed at that date. At the end of 2008, 31% of the power connected to the grid was coming from overseas PV plants. These overseas regions are at the same very sunny and very isolated, making the PV development very relevant. In metropolitan France, regions around the Mediterranean Sea and the west, leaders in terms of the number of installations, are representing 74% of the power at the end of 2007. The figures by region are shown below. The French park is mainly constituted of small plants, integrated to facades or roofs on private housing: 86 % of the installations provide less than 3kw of power as it is presented hereafter:


The French market benefits from a favourable “Building integrated” Feed-in Tariff, and is dominated by BIPV applications for residential and commercial installations. Most important examples were construction of solar PV roofs on top of supermarkets or warehouses. In 2008, 105 MW were installed but only 46 MW were connected to the grid due to long administrative procedures. All PV systems installed in 2008 should be connected in 2009 and a great majority of new installed PV power in 2009 is to be connected within the year. This is why the amount of PV power installed in 2008 remains low as it will be included in the 2009 figures.


6.5. The PV value chain As an historical player in the photovoltaic industry, France can rely on an important density of companies working in this field. The value chain is highly fragmented and could be subject to rapid changes in the following months as the market is moving very fast. Yet, some key actors are strongly present in each segment and should keep their strong positions in the following months/years. They are:

• Ferrope Invesil and Silicium de Provence for refined silicon production. • Emix, Solar Force, Photowatt for silicon ingots and wafer production • Free energy, Solems, Photowatt for cells production. • Free energy, Photowatt, Tenesol for module production • Schuco, Profils, Solar construct, Clipsol, Tenesol, Jacques Giordano for

structure production. • Schneider Electric, Danfoss, Solectria for inverters. • GSE, SPIE batignolles as building companies that include studies about

photovoltaic installation in their services. • Akuo energy, Solaire direct, Eneovia, Terre Ciel Energies as integrators that

design, install and operate photovoltaic infrastructures.


• Tenesol, or Cegelec as turnkey installors ( Tenesol is a subsidiary of Total and EDF )

• Lots of small scale artisans acting locally and sometimes together for installations in a central purchasing system such as Greeneo.

• Air Liquide for providing gases and other services to the solar industry. • Aerowatt, EDF energies nouvelles, Sechilienne Sidec, GDF Suez through

compagnie du vent, E-ON, Voltalia as power producers. • Caisse des dépots et consignations, Enfinity, Credit agricole private equity,

Credit Du Nord, Natixis, Foresight investment funds, 123 ventures, Demeter, Ofivalmo as investment funds.

Main production plants are presented in the map hereafter:


6.6. Sector organizations Since 2006, the number of companies in the branch has widely increased, and is now structured around the following main bodies:

• SOLER the French group for companies working in the PV, counts 180 members (while 30 in 2006), and is pushing the PV industry into various milieus.

• ADEME, the French body in charge of energy savings in France, is the leader in

terms of proposing scenarios for the future to the government: Their PV specialists can also help the newcomers as they perfectly know the market.

• Investinfrance, the body in charge of promoting foreign investments in France, is also helping to put together foreign investors with the right contacts in France, and with administrative details.

• Quali PV, the appellation for the quality of PV installations has registered a huge

increase, counting now more than 2000 companies. The French government remains by far the most important player as the decision maker about country policies, regulations, funding, tax cuts and feed in tariffs. Concerning research, main actors are:

• The CNRS (National centers for research) and the universities.

• The IRDEP (Institute for research and development about PV power), through a partnership between EDF (French power utility), CNRS, and the engineering school “Ecole Nationale Supérieure de Chimie de Paris”.

• The CEA (atomic research body) devotes a large part of its new technology program to the photovoltaic industry.

• The INES (National Institute for Solar energy) which gathers multidisciplinary

teams show again the great interest of the French government for this industry.

Research budget has increased from 13.8m€ in 2004 to 24.2m€ in 2006.

6.7. Market dynamics and future developments A French specificity: PV integration to building In 2006, the French government chose to promote the “integrated to building” PV branch because of several ecological and industrial reasons that are detailed hereunder:


• Goal of dividing by 4 the green house gases from 1990 to 2050. • From 2012, buildings will not have to consume more than 50kw of primary energy

per sqm and per year (so called BBC), and in 2020 buildings will have to provide energy. (So called BEPOS: part of new sets from the “Grenelle de l’environnement”: regulations directed towards ecology)

• To develop an integrated French industry in this field as most of foreign industry was aiming at on ground plants. At the same time the goal is to increase employment in France and export this specific technology.

.

Feed in Tariffs As the French government is pushing the “integrated to building” PV branch, the feed in tariffs reflects this strategy and as of today they are the following:

- -30c€ per kWh in metropolitan France and 40c€ per kWh overseas.

- -25c€ per wkh in metropolitan France and 13c€ per kwh overseas are added while integrated to the buildings.

Procedures French procedure for solar panels installation is marked by a high level of bureaucracy. The numerous organisations the installer has to face are:

• Installation of solar panels is subject to building permit ( procedure should become easier for small scale plants in 2009)

• A demand for connection has to be sent to EDF distribution. • An authorisation to exploit the power plant has to be sent to the dedicated French

body: The DIDEME. • To sell the electricity to the grid, a specific authorisation should be requested to

the DRIRE.


• Then a contract for selling electricity has to be signed with EDF AOA. These procedures can take up to several months and even exceed one year. Companies specialised in administrative tasks have been established to facilitate the set-up. Even if they are subject to a simplification in 2009, they will remain slightly complicated for companies not used to French bureaucracy. General trends of the PV market in 2009:

• General tendency in 2009 is in the same trend as 2008: 200 to 300 MW should be installed in 2009 according to the responsible from the SER association.

• 1GW of projects planned by all the players of the PV industry ( installation spread in the next 2/3 years )

• No great changes despite the economic crisis so far: one of the sectors that resist the best.

• Development that started overseas and that should widespread all over metropolitan France.

• Market that started from small scale production for private people and is now expanding to several megawatts power plants.

• Still a great focus on building integrated PV: inauguration in June 2009 of the biggest French PV power plant which is at the same time a sun protection for the parking of a Leclerc hypermarket. ( 8000sqm ; 1.42GWh/ year; installer: Sunvie)

• Norms concerning building integration subject to change in 2009: ongoing discussion between ADEME / SER and the government to find an agreement.

• Feed in tariffs are not subject to change until 2012 according to the ecology ministry.

• According to a Xerfi study from may 2008, PV power in France should represent 1012MW in 2012 , a forecast probably more realistic than the one from EPIA presented hereunder:

Land availability for large plants


• Public opinion in France is reluctant to using farmland for installing power plants. • Large power plants are mostly installed in lands that cannot be farmed such as

former waste dumps, contaminated lands, swamps… • Dialogue with local authorities is mandatory to find a place to build this kind of

power plants (local Investinfrance representatives, local ADEME representatives, city mayors etc…)

• Crosschecking has to be made between land availability and grid availability to avoid important construction costs for connections to the grid.

Consequences of the financial crisis According to Coller Capital Global Barometer, recently published, only a quarter of the management teams in the capital-investment will fail to raise capital in the seven years ahead and will close, according to the 120 professionals interviewed in the spring (28% in venture capital and 23% in the LBO). Other studies are more alarmists. Some, such as Candover, are already officially seeking buyers or trying alternative ways of raising capital on the markets. This is particularly the case of 3i. Changes and new opportunities Present feed in tariffs are not supposed to change dramatically in the following years, and should remain stable until 2012 according to Jean Louis Borloo, the French ecology minister. Yet, we have heard that some regulations could slightly change:

• Conditions for integration to buildings could change in few months making a difference between PV fully integrated to buildings and PV just adaptable to any house.

• The basic feed in tariffs could increase a little to accelerate the process of large plants creation.

These scenarios are subject to government approval and will not be effective before 2010 if accepted. But if accepted, it will give an advantage to tailor made and high value solutions, and at the same time esthetical and sustainable. The potential raise in feed in tariffs for large plants could also increase revenues for investors. These two points could become a great opportunity for the Norwegian industry. Regions of interest Even if overseas regions look more promising in terms of feed in tariffs, sun exposure and needs for energy, we would not recommend of targeting this area. Mentality, way of doing business and procedures are far compared to usual ways: Indeed things can take much longer time than in metropolitan France. Network is a key in this market, which could again delay again an effective implementation. We would recommend the regions that are at the same time active in this field, and that can rely on a good to high sun exposure. These are by order of preference:


• The South region “ Languedoc Roussillon” • The South East region “Provence Alpes côte d’Azur” • The South East region “Rhône Alpes” • The region “Poitou Charentes”

To enter those regions, the entry points are listed in the next chapter.


Entry points Few main entry points were identified in this study that could allow entering the market the right way:

• Contacting the French PV association SER to be at the same time visible and get the short term information on the market.

• Contacting the two main relevant French bodies in the selected region: ADEME (energy saving body) and InvestinFrance as they can find the right places to invest, potential partners if necessary or even offices.

• Contacting the main actors in the market in the domain that have been listed before if the goal is to sell specific products to these companies (e.g. selling silicon to a silicon plant…), or to initiate a partnership with them.

• Be present in the most important fairs to be visible and initiate a reputation in the French market as it is mandatory: Two main ones are “ Le Salon des énergies renouvelables” http://www.energie-ren.com or “SIREME” http://www.sireme.fr/

Limitations A study from Enerplan, a French association for solar energy, sums up the brakes that limit the solar market in France and the points that should/could be quickly improved: • Speeding up the connection to the grid "On the current pace, ERDF can connect one-

quarter to one third of the demand": This will probably be improved in the following months, but delays are still expected.

• Simplify and improve the processing of authorization to produce solar electricity: "The procedures from government are numerous, lengthy and complex.” This will be taken in charge but only for small production plants: Administration and bureaucracy will remain the most important drawbacks for any installation in France.

• A precise and appropriate legislation for the development of the ground plants: This will potentially be enhanced in 2009.

• Further training development for professionals through QualiPV association.

6.8. Other technologies of importance: solar thermal As of today the Solar thermal represents a marginal part in the renewable energy breakdown in France. Yet, this sector has benefited from a strong growth and in 2008, France ranked fourth with 388.000 sqm of installed surface.


As it has been said for photovoltaic, France can rely on the 5th resource in terms of sun exposure in Europe. For instance, in south of France, 3sqm are enough to provide 50 to 80% of the hot water consumption for a family of 3 to 4 persons. Solar Thermal has known a tremendous growth the last years with about 40% increase each year and still quickly growing today (18% in 2008). This is due to the initial Solar Plan (Plan Soleil), from ADEME (funding) which has been completed by tax cuts from the government and more and more funding from local authorities making the French market one of the first in Europe. This growth is expected to continue in the following years because of the norms that have been launched for new buildings. All new buildings will have to be low emission from 2012 (BBC), and zero emission building from 2020 (BEPOS). Secondly, Solar thermal can be used for several applications such as water heating, heating, but also air conditioning or cooling systems which makes it very relevant overseas. Most favourable segments in France are:

• Collective Solar thermal water heaters that can be used in restaurants, buildings, gymnasiums, hospitals as they reduce energy costs.

• Specific industrial applications for plants such as cooling systems, large scale water heating. (e.g.: a pig slaughter plant saved 40 000 tons of fuel in a French Island thanks to solar water heating )


6.9. Sources In addition to companies and public bodies websites already listed in acronyms and definitions chapter, the following websites helped us while building this study: Associations: Enerplan www.enerplan.asso.fr Comité de liaison energies renouvelables: www.cler.fr Agora 21 : http://www.agora21.org/ Specialized websites: Outils Solaires: www.outilssolaires.com Observer: http://www.energies-renouvelables.org/ BDPV: http://www.bdpv.fr/index.php Photovoltaique info: http://www.photovoltaique.info/ Actualités news environnement: http://www.actualites-news-environnement.com Le moniteur : http://www.lemoniteur.fr/ Actu environnement : http://www.actu-environnement.com Futuralis : http://www.futuralis.com/ Developpement durable : http://www.ddurable.com Vision Durable : http://www.visiondurable.com Enviro2b : http://www.enviro2b.com Ministries: Energy ministry: http://www.industrie.gouv.fr/energie/sommaire.htm Ecology ministry: http://www.developpement-durable.gouv.fr/ Ecology ministry: Grenelle de l’environnement : http://www.legrenelle-environnement.gouv.fr/spip.php


7. ITALY

7.1. Acronyms and definitions AEEG: Central Authority for Electric Energy and Gas AU: State owned company, regulatory body of electricity market CNR: the National Research Council DM 19/02/2007: Ministry Decree about new regulation of PV incentive scheme ENEA: Italian National Agency for New Technologies GME: State owned company, manages wholesale electricity market in Italy GSE: State owned company, manager of electric services IPEX Italian Power Exchange, wholesale energy market RES: Renewable Energies SEGS: Solar Energy Generating Systems


7.2. General data about Italy Inhabitants: 60.1 millions Population density: 199/km2 Main cities (millions inhabitants): Rome 2.7, Milan 1.3, Naples 972’, Turin 900’ Public Administration:

Central Government in Rome 20 Regions 5 of which with special statutes: Valle d’Aosta, Trentino Alto Adige, Friuli Venezia Giulia, Sicilia, Sardegna 110 Provinces 8110 Municipalities (comune)

7th biggest economy in the world GDP 2008 (current market prices): 1,572 billion € (source ISTAT) GDP ‘08 Vs ‘07: -1.0% Expected GDP ‘09 Vs ‘08: -5.2% (source OCSE) GDP pr. Capita: 31,000 $ (source C.I.A.) Unemployment rate (est. 2009): 8.8 % (source: Il Sole 24 ORE))

Italian Regions


7.3. The Italian energy market Italy has a lack of raw materials for energy production; energy is mostly produced using imported fossil fuels (moreover natural gas), a certain amount of electricity is imported from border countries and 13,6% (last official available data: 2007 - source: GSE) is produced using renewable sources, mostly hydroelectric thanks to geological conformation of the Italian territory. National Transmission Grid (Rete di Trasmissione Nazionale RTN) is managed by State owned company Terna S.p.A.; it conveys super-high and high voltage energy (produced or imported) through national grid to end-users distribution network.

Super-High Voltage RTN: 22.848 Km High voltage RTN: 20.143 Km Total RTN: 34.189 Km Interconnection lines to import energy: 16 High voltage conversion centrals: 267

Transactions in the electricity market are managed by GME (Gestore del Mercato Elettrico). The creation of an Electricity Market responds to specific requirements: encouraging competition in the potentially competitive activities of electricity generation and wholesale, through the creation of a “marketplace”. The Electricity Market, commonly called Italian Power Exchange-IPEX, enables producers, consumers and wholesale customers to enter into electricity purchase and sale contracts. Italian energy balance 2007

Hydro

Biomass

Geothermic

Wind

Renewable

Traditional +import

Import/export

Hydro from pumping

Thermic traditional

Net production + import Consumption

Agriculture

Industry

tertiary

Household

Italian energy balance 2007 (Source: GSE)

Request339,9 TWh

Grid loss21,0 TWh

Consumption318,9 TWh


The market of energy and gas is monitored and controlled by the independent body AEEG, Regulatory Authority for Electricity and Gas, which mission includes also the control on the tariff system, the optimization of economic goals in respect of general social objectives and the efficient use of resources. Renewable energies market is managed by GSE, the state owned company which regulates and monitors the energy production related to all the renewable sources. This body manages also all the national incentive schemes for RES, in cooperation with other organizations (e.g. ENEA, CNR). Total renewable energy production 2007: 14.2% on total production Solar energy production in 2007 was less than 0.01% of total production.

Total

Hidropower

Geothermic

Biom ass

Windpower

Solar


7.4. State of the art of PV market

Source: IES European Commission PV energy production is still low despite enormous potential that Italy has in terms of geographical position and sun irradiation. In the early ‘80s Italy was the pioneer in the photovoltaic technology, being the first country in the world where this kind of energy production for electricity consumption started. After a few years all development programmes reguarding PV technology were left. Since renewable energy production has become an EU priority, with the introduction of 2020 targets for energy and for carbon emission reduction, a new “PV era” has started in Italy, like in a large number of other countries. The interest on PV technologies has risen again with the introduction of feed-in tariff schemes and with a fast growing development of PV industry. The first Incentive scheme introduced in 2005 started the sector development despite the feed-in tariff system was not so efficient and the regulation had some lacks. It was with the introduction of a second PV incentive scheme (Nuovo Conto Energia – with the decree DM 19/02/2007) in 2007 that PV market in Italy started a significant growth trend (despite many requests within the former incentive scheme have been unattended and some other are still pending today).


Installed PV power (MW)

12,2 14,1 15,8 16 16 16,7 17,7 18,5 19 22 26 30,7 37,5 50

120,6

301,7

520 (June 09)

0,0

100,0

200,0

300,0

400,0

500,0

600,0

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

PV plants and energy production (2006-2008) with feed-in tariff schemes Source: GSE

nr. of plants

power


PV Installations - Region and power classification Up-to-date June 30th 2009

Source: GSE SpA Analysing the number of installations it is noticeable the low number of high power installations (8 of >1 Mw). These large scale plants are installed in the centre-north of Italy, despite the better sun irradiation the southern regions have. Considering medium scale plants (200 kW to 1 Mw) the leader is Puglia region where local legislation is surely one of the most efficient about solar PV and the authorisation procedures are the most simple in Italy. PV Technologies Source GSE

TOTAL

REGION Nr Nr Nr Nr Nr NrkW kW kW kW kWkW

Technology (%value)

Mono-crystalline silicon 41%Poli-crystalline silicon 52%Amorphous silicon 7%


The small-medium scale plants (industrial and housholds) are more concentrated in the northern Regions (Lombardy, Emilia Romagna, Veneto, Toscana, Trentino Alto Adige), due to a more developed cultural attitude towards green values both in the institutions and in the citizens. This reason, together with a more developed industrial system and infrastructures, has brought to a larger development of PV and other green technologies in the northern part of the country. Incentive schemes We can identify two incentives categories for PV plants: incentives for the energy production and incentives for the plants realization.

Incentives for the energy production In 2005 the first feed-in tariff incentive scheme called “Conto energia” was introduced. The scheme had some weaknesses due to the adopted system for the scheme registration; it was not particularly successful and just a lesser part of the potential power from the registered projects in the scheme were actually installed. In the In 2007 significant variations have been brought to this scheme through Ministry Decree DM 19/02/2007, starting the actual feed-in tariff scheme called “Nuovo Conto Energia”. http://www.gse.it/attivita/ContoEnergiaF/Pagine/default.aspx The scheme divides the installations in three categories:

• Not integrated plants (e.g. on the ground) • Partially integrated plants (e.g. plants installed in plain roofs or terraces) • Integrated plants (plants totally integrated in architectural structures, e.g. facades,

roof)

Feed-in tariff (€/kWh)

power KWnot integrated in buildings -on the ground

partially integrated in

buildings

integrated in buildings

1 < P < 3 0,392 0,431 0,480

3 < P < 20 0,372 0,412 0,451

P > 20 0,353 0,392 0,431

Installations

The scheme rules in short:

- The plant must be connected to the grid to have access to the scheme - The Incentives last for 20 years. - During that period the feed in tariff is invariable.


- All plants finalized before the achievement of 1200 MW cap of installed power have access to the incentives; anyway all the plants starting producing energy in the following 14 months after the achievement of this cap will have access to the scheme.

- Feed in tariff will be reduced of 2% in 2010 as it has been reduced of 2% in 2009 respect the original tariff.

- Request of applying to the feed-in tariff must be submitted to GSE (Gestore dei Servizi Elettrici); the same body will pay the incentives.

Category of installed plants in each region - update December 2008. Source GSE Further income for PV energy producers is from the energy sale. The produced energy can be sold in 2 different ways: 1 Net metering The grid connection is made through particular metering which quantify the balance between the energy produced and put into the grid and the energy consumption. The positive balance will be maintained as credit for the following year. Net metering system is managed by GSE and is applicable to plants ≤ 200 kW. Usually this kind of energy sale is for small plants mainly deputed to self consumption (private or industrial).

Type of installation (%value)

Integrated plants 20%Partially integrated plants 53%Not integrated plants 27%


2 Access to the energy market The energy producers have two possibilities to sale the produced energy on the energy market. • Indirect sale: they can deal a bilateral agreement with GSE to sell energy at a

minimum warranted fixed price, which depends by the geographical area where the grid connection is (in the South of Italy the energy price is higher). If the annual fixed price turns out to be lower than the annual average market price, GSE has the commitment to balance the amount to the producer on a yearly basis.

• Direct sale: the energy producers can choose of becoming operators into the IPEX

energy market, trading the produced energy as a normal energy supplier. To become IPEX operators a concession from GME (electric market manager) body is needed.

Incentives for plants installation There are different kinds of economic incentives for the installation. 1 – Reduction of VAT from 20% to 10% on a National level. 2 – Local / regional funding for building PV plants; each region can have separate budget to fund plants building; it’s important to monitor regional bans to access to all the opportunities. An up to date overview of all regional incentives about renewable energies can be viewed on the following website, managed by ENEA, by “clicking” on each region link on the right side of the webpage: http://enerweb.casaccia.enea.it/enearegioni/UserFiles/OSSERVATORIO/Sito/osservatorio.htm Procedures for PV plants installation Italian law designates both to Central State and to Regions the legislation authority in matter of energy. Each Region is deputed to define final rules and procedures (based upon Regional laws) in respect of the national legislation framework. Here follows a brief of general procedures to request authorisation for install PV plants. It has to be underlined that each Region could have specific rules and laws and each energy operator can have different procedures for the grid connection. Bodies involved per each step: • Municipality / Region: PV installation (DIA – AU – Tecnhical project…) • Grid operator: grid connection • U.T.F. (Technical Office of Finance Unit): authorisation to produce energy • U.T.C. (Municipal Technical Office): authorisation to build PV installation

(Not mandatory in each region) • G.S.E.: access to feed in tariff • Region: V.I.A. environment impact evaluation (not mandatory in every region)


• ENEA: monitoring e control (when PV installation is working) PV Installation main procedures V.I.A. (not mandatory, depending by single region) The Environment Impact Evaluation (V.I.A.) is possibly asked when the site where the plant will be built is considered environmentally concerned (e.g. natural sites, parks, national monuments areas, etc.); it is demanded to each Region to ask or not for the V.I.A. procedure. D.I.A. Declaration of Activity Beginning. It is a bureaucratic procedure to be presented to the municipality authority; if the authority does not rebut it within 30 days, the plant installation can start following the “consent by silence” approval. D.I.A. is normally applied for small plants; in some regions (e.g. Puglia) this procedure is extended to plants until 1 Mw power. Autorizzazione Unica A.U. (Unique Authorisation) The authorisation named A.U. is a bureaucratic procedure that consists of an evaluation of installation concession made by all the bodies of Municipality and Region deputed to it. Each Region has peculiar rules about A.U.. A.U. is delivered by “Conferenza Unica dei Servizi”, that is a committee constituted by representatives of Municipality and Region. The Commission has to deliver a decision within 180 days. Access to feed-in tariff The request to access to feed-in tariff has to be submitted to G.S.E. after the installation is operative and connected to the grid, within 60 days after energy production started. Within the following 60 days after the request is presented, G.S.E. has to deliver the feed-in tariff assigned to the installation. The incentive lasts 20 years. Each Region and Municipality has peculiar laws and rules about energy production and installations. Further procedures to be considered are related to the grid connection. Each grid operator has peculiar procedures. Usually PV plants do not change the “site usage”: e.g. an agriculture site with PV installation built inside will not change its “site usage” definition, remaining “agriculture site”. It is suggested to check with th Technical Office (U.T.C.) of the Municipality, the site definition in the Urban Planning, and eventual consequences on it after the plant installation. The bottleneck of the Italian system is the bureaucracy, in terms of procedures and timing. It has been estimated an average time to build a power plant 1-5 MW of 15 months for ultimate the procedures and 70 documents required. (Source POLIMI Energy Strategy)


7.5. PV value chain The value chain can be fragmented as showed in the following picture. It includes the components and the technology linked to the production, and the funding and the insurance linked to the installation (the theft of PV panels is not unusual in power generation plants on the ground, so an insurance is often needed). Incomes volume 2008 of the PV value chain in Italy

Silicon and wafers

600 mln €

Cells & moduls

850 mln €

Distribution & Installation1.090 mln €

Energy production &

trading13 mln €

Funding 735 mln €

Components & technology 1.150 mln €

Insurance 5 mln €

Households420 mln €

Industrial sector

330 mln €

Power stations

340 mln €

Value chain players in the Italian market

Abroad supplierItalian branch of abroad supplierItalian supplier

Silicon and wafers

50 companies

Cells & moduls59 companies

Distribution & Installation

314 companies

Energy production &

trading110 companies

Funding

Components & technology 96 companies

Insurance

Households

Industrial sector

Power stations

350 Banks / Venture capital

/ insurance companies

98%

2%

0%

40%

22%

38%

0%

26%

74%

24%

14%

62%

25%

23%

52%

8%

13%

79%

Source: POLIMI Energy strategy


As shown in the picture related to the value chain players, the Italian suppliers are present downstream, moreover in the system integrators, in the components and technology, and in the energy producers sectors. The upstream (silicon and wafers) is exclusively covered by abroad players due to lack of raw materials in the country. The funding sector is quite developed, with a large number of banks granting loans for PV installations; this is due to the feed-in tariff system, in which the economic incentive can be directly delivered from GSE to the bank granting the loan. Just a few banks offer big entity loans, anyhow also in these cases the loan amount is within 5 mln €, not enough for big PV plants (max 3/4 Mw). Here follow the main Italian players per each part of the value chain Silicon and wafers Company Foundation

year location 2010

forecast production

website

Silfab 2007 Borgofranco d’Ivrea (TO)

5.000 t

(~600 MW)

www.silfab.eu/it/

Estelux

(recently acquired by SOLON)

2007 Ferrara 4.000 t

(~480 MW)

www.estelux.it

Italsilicon 2007 Sulmona (AQ)

3.000 t

(~350 MW)

n.a.

Cells and Moduls Company Turnover

2007

(mln €)

2007 Production capacity (MW)

2008 Production capacity (MW)

website

Solarday 18 15 60 www.solarday.it Renergies 12 15 30 www.renergiesitalia.it Sorgenia Solar

6 7,5 15 www.sorgeniasolar.it

CEMI* 0,5 8 35 www.cemiweb.com Eosolare 6 6 10 www.eosolare.eu * The company produces also for third companies; the turnover is referred only to own products


Integrated producers (silicon, cells, moduls) Company Turnover

2007

(mln €)

2008 Cells Production capacity (MW)

2008 Moduls Production capacity (MW)

website

Helios Technology

32 60 60 www.heliostechnology.com

XGroup 1 30 30 www.xgroupspa.it Solsonica 0 30 30 www.solsonica.com EniPower 732 10 10 www.enipower.eni.it Components and technology (usually the production for the PV sector is a branch production of the companies) Company 2007 turnover

(.ooo €)

website

Elettronica Santerno

11.426 www.elettronicasanterno.it

SIAC 5.046 www.siacenergy.com Aros 52.561 www.aros.it Italcoel 3.993 www.italcoel.com Riello UPS 548.439 www.riello-ups.com Distribution and installation Company Business model 2008

installed power (Kw)

2008 turnover (mln €)

website

Enel.Si System integrator 29.000 Na www.enelsi.it Sunerg Solar System integrator 10.000 37 www.sunergsolar.com Enerqos EPC contractor 6.000 35 www.enerqos.com Ecoware System integrator 6.000 28,5 www.ecoware.eu EnerRay System integrator 4.000 20 www.enerray.com Enereco Distributor 3.000 12,6 www.enerecosrl.com Enerpoint System integrator 2.670 59,5 www.enerpoint.it CPL Concordia System integrator 1.000 280 www.cpl.it Phoenix Solar* System integrator 812 9 www.phoenixsolar.it Eco Energia System integrator 345 Na www.ecoenergiaweb.it *It is the Italian branch of the foreign mother company. Energy producers Despite the recent liberalisation, the Italian energy market is still concentrated in few big players having the control of 90% of energy production and distribution. The rest is


managed by a huge number of small producers, often at a local level. There are no energy producers exclusively producing energy with RES; the main players have opened branches to market green energy (from different sources). The installed PV plants are moreover small sized. Just a few are > 1 MW power. The main players in the market are: Enel Green Power http://enelgreenpower.enel.it/en/index.html Sorgenia www.sorgenia.it www.sorgeniasolar.it EDISON www.edisonenergia.it

7.6. Sector organizations Italian PV sector is characterized by the presence of several associations (something which is quite usual in the Italian industrial sectors). Different associations are often opponents each others, promoting separate campaigns and lobby activities. The presence of different organizations, from one side makes possible a competition between them giving the best results in terms of lobby pressures, from the other side gives less strength of bringing up interests of their members. The two main Associations are GIFI and Assosolare, together they join the main players operating in the Italian market. GIFI Gruppo Imprese Fotovoltaiche Italiane (group of PV companies) www.gifi-fv.it GIFI is the oldest PV sector association; it groups companies (Italian and branches of abroad firms) in fields of production, project and installation of PV components and systems. Opposite to other organizations, GIFI associates exclusively PV value chain firms. The association is part also of ANIE Federation, the Organization of Confindustria (Confederation of Italian Industry, comparable to Norwegian NHO) that gathers electro technical and electronic industries. The link with Confindustria represents a relevant connection for lobby activities. ASSOSOLARE Associazione Nazionale dell’Industria Solare Fotovoltaica (Association of Solar Photovoltaic Industries) www.assosolare.org Assosolare has been constituted in 2006 by a former member of GIFI. It has a strong connection with Ministry of Environment being member of CNES (Ministry of Environment National Committee for Photovoltaic Energy). Within its members are present companies from different branches of the value chain.


APER Associazione Produttori Energia da Fonti Rinnovabili (Association of Renewable Energy Producers) www.aper.it APER represents companies of all renewable energies sectors. Considering the wide RES it is the most representative association in Italy and one of main in Europe. It represents more than 300 companies. APER also cooperates at European programs on development of renewable energies. KIOTO CLUB www.kyotoclub.org Kioto Club is a non-profit organization founded in 1998 joining companies, bodies, associations, institutions and local administration involved in the achievement of Kioto Protocol commitments for reducing greenhouse gases. The “Club” promotes events, information campaigns, lobby activities, training courses in the fields of energetic efficiency and renewable sources. The organization joins about 200 members. Compared to other organizations Kioto Club is more involved in promoting social campaigns than industrial sector interests. SAFE Sostenibilità Ambientale Fonti Energetiche (Energy Resources and Environmental Sustainability) www.safeonline.it SAFE is a non-profit association, centre of excellence for energy and environment issues. The Organization joins companies, bodies, institutions, Universities, Media with the aim of promoting sustainability values. SAFE is promoter of a Master programme in Energy Resources Management. ISES ITALIA International Solar Energy Society – Italy www.isesitalia.it ISES is the Italian branch of the international organisation ISES; it joins companies, scientific research centres, institutions, associations and education institutes. Despite the words which compose the name of the association include only “Solar Energy”, ISES is in Italy the main non-profit technical-scientific Association for promotion all of renewable energy sources. GSE: Gestore dei Servizi Elettrici (GSE S.p.A) www.gse.it State owned company, plays a central role in promoting, stimulating and developing renewable energy sources in Italy. The company has a single shareholder, i.e. the Ministry of Economy and Finance, which exercises its shareholder rights together with the Ministry of Economic Development. GSE is the parent of two companies: Acquirente Unico (AU) and Gestore del Mercato Elettrico (GME). AU: Acquirente Unico S.p.A. www.acquirenteunico.it The company vested with the task of procuring electricity for captive customers under criteria of continuity, security and efficiency of electricity supply, thereby passing the


benefits from liberalisation of the sector onto such customers. Acquirente Unico purchases electricity in the market on the best possible terms and resells it to distributors. GME: Gestore del Mercato Elettrico www.mercatoelettrico.org The company, which was set up by GSE, is entrusted with the organisation and management of the Italian Electricity Market (IPEX), under criteria of neutrality, transparency and objectivity, with a view of promoting competition between producers and ensuring an adequate availability of reserve capacity. The operativeness of GME on 8 January 2004 gave rise to the first organised wholesale electricity market in Italy, as it happens in other European countries. AEEG: Autorità per l’Energia Elettrica e il Gas www.autorita.energia.it The role and purpose of the Authority is to protect the interests of users and consumers, promote competition and ensure efficient, cost-effective and profitable nationwide services with satisfactory quality levels. Its mission includes defining and maintaining a reliable and transparent tariff system, reconciling the economic goals of operators with general social objectives, and promoting environmental protection and the efficient use of resources. ENEA: Ente per le Nuove Tecnologie, l’Energia e l’Ambiente, www.enea.it Italian National Agency for New Technologies, Energy and the Environment, is a public agency operating in the fields of energy, the environment and new technologies to support Country’s competitiveness and sustainable development. CNR: Centro Nazionale Ricerche, www.cnr.it The National Research Council, is a public organization; its duty is to carry out, promote, spread, transfer and improve research activities in the main sectors of knowledge growth and of its applications for the scientific, technological, economic and social development of the Country. To this aim, the activities of the organization are divided into macro areas of interdisciplinary scientific and technological research, concerning several sectors. TERNA - Rete Elettrica Nazionale SpA www.terna.it Terna is the company in charge of electricity transmission and dispatching over the high-voltage (HV) and extra-high voltage (EHV) grid throughout Italy.

7.7. Market dynamics and future developments The second half of 2009 and 2010 will be crucial for the future development of the Italian PV market due to the expected new feed-in tariff scheme that will be probably decided at the end of 2009.


The actual scheme regulates the tariffs until the achievement of the 1200 MW target, which will be probably achieved by the end of 2010. A second target of 3000 MW is already planned; anyhow the tariff scheme has not been decided yet, and it will be the key point for the future attractiveness of the Italian market. Some good signals about the Government intention to continue investing in PV sector are the recent guidelines (June 2009) have been delivered to the sector associations to get their comments. It is expected these guidelines will be transformed in law by the end 2009. Government guidelines for the future development of the market (source: GIFI):

1. Obligation to install 1KW PV power per each inhabitant of new buildings, and for some house restructuring cases (this point has already become law with publication on Official Gazette on June 6th 09).

2. Simplification of procedures for plants authorization 3. The creation of PV burden sharing targets for regions in consequence of June 5th

new EU Directive which has stated the Italian target of RES production to be achieved by 2020 (17% of total energy production).

Despite the credit crunch has slowed the funding, affecting the forecast development of the sector, two scenarios can be drawn following a study from Milan Politecnico Universtity Research Centre (source: POLIMI Energy Strategy Report, 03/08). The best scenario takes in consideration:

- The confirmation (or at least a little adjustment) of the actual feed in tariff system after the achievement of first target 1200 MW.

- The growth in the PV equipments offer, due also to increased foreign players presence, thanks to the attractiveness of the Italian market compared to Spain and Germany where feed in tariff have been reduced.

- Simplification of the authorization procedures. - Reduction of PV energy production cost, at least 8% reduction per year. - The obligation to install PV plants in new buildings.

The worst scenario takes in consideration:

- A consistent revision of feed in tariff system after the achievement of first target, following what has happened in Spain and Germany

- Reduction of PV energy production of 3% per year. - The law on the obligation to install PV plants in new buildings (see point1 in the

Government Guidelines above) will not become effective in a short time.


PV installation forecast (best and worst scenarios)

0

500

1000

1500

2000

2500

3000

3500

2006 2007 2008 2009 2010 2011 2012

Year

MW

Best scenarioWorst scenarioNo Credit crunch

Source POLIMI Energy Strategy Report, 03/08 As shown in the picture the credit crunch has delayed one year the market development. It is fundamental for the future development of PV sector that the second target of incentive scheme “Conto Energia” 3000 MW will be supported by feed in tariff system similar to the actual. To witness the Italian Government commitment in the development of RES towards the achievement of 2020 EU target, here follows the Position Paper has been presented to EU Commission.

Power energy prod. Power energy prod.MW Twh MW Twh

Hydro 17325 36,00 20200 43,15Wind 1718 2,35 12000 22,60Biomass & biogas 1201 6,16 2415 14,50Geothermic 711 5,32 1300 9,73Solar 34 0,04 9500 13,20Waves and tides 0 0,00 800 1,00Total 20989 49,87 46215 104,18

RES2005 2020 Forecast

Source: GSE


Italy is one of the European countries (probably also worldwide) having best potential for solar energy investments due to:

• geographical position: very good sun irradiation, especially in the southern regions;

• despite socio-economic situation is in a negative conjuncture, RES (in particular

solar) is a growing sector: large number of players (from abroad too) are in the market;

• actual feed-in-tariff system is driving the market with a fast growth rate;

• ecological and sustainable values have increasing emphasis in the consumers’

market choice, 32% of end-users declares availability to pay a little more for buying clean energy (source: market research GFK EURISKO July 2008);

• industries are looking at ecological certifications (RECS, Sustainable Energy

Europe, EU Ecolabel) as image building strategic tools; investment in PV energy are increasing from industrial sector both as cost saving and image strategy;

• Compared to Germany and Spain (the first and second markets before Italy)

where markets are in a very mature phase, Italy is still in a fast growth.

• The market is extremely active and quite confused: in this moment the real number of operators in the PV sector (a huge number of companies is declaring to be in it) is “out of control”; the market will become more stable in the near future giving opportunities to the most reliable players.

• Italian bureaucracy is very complex; each Region has different rules and

bureaucratic procedures, national rules have not been created yet, so far just general guidelines and the feed in tariff system regulate the market at a national level.

• Connections and lobby, moreover in the southern regions, are very important to

get introduced into the market.

• In the southern regions, infrastructures as power grid or other technical equipments for energy distribution are often old and not suitable to realize new grid connections.

• Delay for the connection to the power grid is still a big problem; sanctions for the

grid operators are not effective and not strong enough.

• Burden sharing targets for each region, in order to achieve the EU target, will be probably the engine for simplify the market rules.


7.8. Other technologies of importance: solar thermodynamic

Italian research centre ENEA started in 2001 a programme for the development of a cutting edge technology within an existing solar technology: solar thermodynamic. Since early 80’s U.S. and Spain started developing solar thermodynamic technology, based on concentration of solar energy to heat a fluid (usually mineral oil) used to produce steam for power generation. ENEA studied a new technology based on the usage of molten salts instead of mineral oil, obtaining higher temperature fluid (medium temperature 550°C instead of 390°C), to be stored for the energy production. The system designed by ENEA combines the solutions used in linear parabolic collector systems and solar towers, by introducing a series of important innovations that overcome the critical points of both. The system is based on a technologically adapted version of the linear parabolic geometry of SEGS (Solar Energy Generating Systems) that allows the use of molten salts as an energy carrier, thus providing for the higher temperatures typical of solar tower plants. Salts are an effective storage medium because they are low-cost, have a high specific heat capacity and can deliver heat at temperatures compatible with conventional power systems, have the potential to eliminate the intermittency of solar power, by storing spare solar power in the form of heat; and using this heat overnight or during periods that solar power is not available to produce electricity. This technology has the potential to make solar power "dispatchable", as the heat source can be used to generate electricity at will. The main innovations involve: - the use of large scale heat storage, allowing the plant to provide electric power at a constant rate 24 hours a day, regardless of variations in solar power availability. - The increase in operating temperature (heat carrying fluid and storage); this innovation requires, on the one hand, the use of an heat carrier (mixture of sodium and potassium salts), other than the synthetic oil used in the plants currently in operation, and on the other, a substantial improvement in the optical properties of the coating of the HCE (Heat Collector Element) mounted on the collectors, resulting in more efficient heat absorption. ENEA’s Solar Thermodynamic project


When compared to solar tower plants, ENEA’s design offers a wide range of advantages, including lower costs, greater flexibility in siting as well as higher energy availability, and at the same time, features the added benefit of the long experience acquired in the now well-consolidated SEGS modular technology. A pilot plant (5 MW) called “Archimede” using the new technology is in a building phase in Sicily and it will be operative beginning 2010. In 2008 a feed-in tariff has been introduced also for solar thermodynamic plants. ENEA’s technology will probably be involved in the DESERTEC project, the recent international agreement for energy production in Northern Africa signed in Germany between E.On, ABB, Abengoa Solar, Cevital, Deutsche Bank, HSH NordBank, MAN Solar Millennium, Munich Re, M+W Zander, RWE, Schott Solar and Siemens.


7.9. Sources Ministries and Organizations: AEEG Autorità per l’Energia Elettrica e il Gas (Governmental Authority for Electric Energy and Gas) www.autorita.energia.it APER www.aper.it ASSOSOLARE www.assosolare.org GIFI www.gifi-fv.it GME Gestore Mercato Elettrico www.mercatoelettrico.org GSE www.gse.it IES – Insitute for Environment and Sustainability – EU Commission www.ies-europe.org KIOTO CLUB www.kyotoclub.org Ministero dell’Ambiente e della Tutela del Territorio e del Mare (Ministry of Environment) http://www.minambiente.it/ Ministero dello Sviluppo Economico (Ministry for economic Development) http://www.sviluppoeconomico.gov.it/ Reports: APER – Report fotovoltaico 2008-2009 (Photovoltaic Report 2008-2009) ENEA – ENEA A new approach to concentrating solar plant (CSP)- Mauro Vignolini 2009 EPIA –Global Market Outlook until 2013 GFK EURISKO- Ricerca sugli atteggiamneti ecologici dei consumatori italiani - market research on green attitudes of consumers - July 2008 GIFI – Un futuro solare per il fotovoltaico in Italia (Sunny Future for Photovoltaic in Italy) GSE - Il Nuovo Conto Energia - up to date May 2009 GSE – Statistiche sulle fonti rinnovabili in italia 2008 (Statistics about Renewable Sources in Italy 2008) IEA – World Energy Outook 2008 NOMISMA ENERGIA – Prospettive a Potenzialità del Mercato Fotovoltaico (Perspectives and Potential of Photovoltaic Market)


POLIMI – Milan Politecnico University, Energy Strategy Report 2009 Publications and magazines (offline / online): Energia24 - www.b2b24.ilsole24ore.com/energia24 Fonti rinnovabili www.fonti-rinnovabili.it Photon online - www.photon-online.it Staffetta Quotidiana (Quotidiano delle Fonti di Energia) www.staffettaonline.com World Energy Council Italy www.wec-italia.org/


8. SOUTH KOREA

8.1. Acronyms and definitions BBL Barrel (1 BBL = 158.9873 litres = 42 US Gallons) BIPV Building integrated photovoltaics BPSD Barrels stream per day CIGS Copper indium gallium selenide EPIA European Photovoltaic Industry Association FiT Feed-in-Tariff GHG Greenhouse gas(es) GNI Gross national income Grid Parity The point at which the cost of electricity from PV systems matches the

electricity price paid by consumers IEA International Energy Agency IEA-PVPS International Energy Agency – Photovoltaic Power Systems Programme kW kilowatt kWh kilowatt hour LCD liquid crystal display LNG Liquefied natural gas MW Megawatt NRE New & renewable energy, in the Korean case defined by KEMCO as

photovoltaic, solar thermal, bio-energy, wind power, hydropower, geothermal, ocean energy, waste energy, fuel cell, coal liquefaction and gasification, and hydrogen energy.

OECD Organization for Economic Co-operation and Development PV Photovoltaic R&D Research and development RD&D Research, development and dissemination RPA Renewable Portfolio Agreement RPS Renewable Portfolio Standard TFT-LCD Thin film transistor liquid crystal display TOE Ton of oil equivalent (The IEA defines it to be equal to 41.868 GJ or 11,630

kWh) TPES Total primary energy supply (TPES = indigenous production + imports –

exports – international marine bunkers ± stock changes) Government bodies, organizations, and others EUCCK European Union Chamber of Commerce Korea An interest group for European business interests in Korea MKE Ministry of Knowledge Economy A newly established ministry of the Lee Myung Bak administration (inaugurated

2008) that has taken the full portfolio of the previous Ministry of Commerce, Industry and Energy as well as parts of the Ministry of Information and Communications, the Ministry of Science & Technology, and the Ministry of Finance and Economy. It also deals with foreign trade, although trade is also dealt with by the Ministry of Foreign Affairs and Trade. It is widely regarded as the focal ministry of the present administration.


KEMCO Korea Energy Management Corporation KEPCO Korea Electric Power Corporation KPX Korea Power Exchange KERI Korea Energy Research Institute A government-affiliated research institute for developing core energy

technologies. KEEI Korea Energy Economics Institute A government-affiliated research institute for national energy policy-making

and energy information issues. KNREC Korea New and Renewable Energy Centre. A division of KEMCO, and the main

authority on NRE. KOSEP Korea South-East Power Co. Ltd. KOMIPO Korea Midland Power Co. Ltd. WP Korea Western Power Co. Ltd. KOSPO Korea Southern Power Co. Ltd. KEWP Korea East-West Power Co. Ltd. KHNP Korea Hydro & Nuclear Power Co. Ltd. Note: This report follows the standard of the IEA-PVPS in notating watt peak (Wp) as watt (W) for the sake of simplicity and readability.


8.2. General data about South Korea The Republic of Korea (henceforth South Korea or Korea) is the world’s 13th largest economy by market exchange rate. It is at the international forefront in shipbuilding, electronics, semiconductors and automobiles, as well as a leading power in industrial plant construction and operations overseas. The country overcame a destructive civil war from 1950 to 1953 to become a paragon of economic development, and from 1962 to 1996 GNI per capita leapt from US$ 82 to US$ 12,197. The country famously suffered, and successfully recovered from, a financial crisis in the late 1997 and 1998 brought on by a rapid loss of investor confidence. In 2007 GNI per capita reached $20,045. The recent financial and economic turmoil in international markets has forced the Korean economy into negative growth. However, there seems to be widespread belief that the Korea will be among the first and swiftest to recover among all recently affected nations. Preliminary data for 2009 Q2 seem to support this view. Additionally, the government has announced a $38.1 billion stimulus package for 2009~2012. The relationship with the totalitarian regime in the North has so far not affected the future growth prospects of the economy, and it is not expected to do so in the short- to medium term either. Regional map of South Korea

Source: Courtesy of the University of Texas Libraries, The University of Texas at Austin

Note: Amended from original


The Korean peninsula extends from the Asian mainland almost bridging to the island nation of Japan. Geopolitically it lies on the intersecting crossroads of Russia, China, Japan and the United States. It connects well with the rest of Asia by sea and air transportation routes. The peninsula is marked by four distinct seasons, most prominently cold and dry winters contrasted by warm and wet summers.

8.3. The South Korean energy market South Korea is characterized by a lack of natural resources and is a major importer and consumer of energy. It is the world’s second largest importer of LNG, the fifth largest crude oil importer, and the tenth largest energy consumer. The nation is especially heavily dependent on imports from the Middle East. It is among the top ten emitters of CO2 and is the OECD country with the fastest growth in emissions in the period 1990 to 2006.1 On a per capita basis, however, it emits less CO2 than for example Germany. In terms of energy efficiency it is among the worst performers in the OECD area emitting 0.355 kg CO2 per $1,000 in the national product. Having few exploitable resources for hydropower, other NREs such as solar PV have seen exponential growth lately.

Total Primary Energy Supply (TPES) in 1,000 TOE 2000-2007

2000 2001 2002 2003 2004 2005 2006 2007 192,887 198,409 208,636 215,066 220,038 228,622 233,372 236,454

Source: kosis

The TPES (total primary energy supply) has grown annually by more than 4 per cent on average since 2000 and reached 236.372 million TOE in 2007 (cf. table above). In 2007 (cf. table below) primary energy came from petroleum (44.62%), coal (25.23%), LNG (14.66%), atomic (13%), RNE (2.04%) and hydro (0.46%). In 2006 total final energy consumption was at 173.584 million TOE having grown by an average of 2.5 per cent annually since 2001.

Source of Total Primary Energy Supply (TPES) in 1,000 TOE and share of source in 2007

Petroleum Coal LNG Atomic NRE Hydro 105,494 59,654 34,663 30,731 4,828 1,084 44.62% 25.23% 14.66% 13% 2.04% 0.46%

Source: kosis The energy import dependency ratio has remained close to 97 per cent for the last decade. Since 2000 energy imports have constituted more than 20 per cent of all imports, rising to a share of 27.7 per cent in 2006 equal to a value of US$ 85,566 million. The dependency on petroleum has, however, fallen to 44.63 per cent in 2007, down from over 50 per cent in 2000 and from over 60 per cent in the first half of the 1990s. The reduction in petroleum dependency has been overtaken by imports of natural gas and domestic nuclear power.

1 Note that OECD comparative figures are for CO2 emissions from fuel combustion


The country is thus among the top ten oil consumers in the world, and top five net oil importers. The domestic consumption of petroleum products reached 765.521 million BBL in 2006,2 or more than 2 million BBL per day. Production of oil products was similarly 949.983 BBL. Both consumption and production figures have remained relatively unchanged since 2000. Despite efforts of diversification as much as 82.2 per cent of crude oil imports are sourced from the Middle East, up from about three quarters in 1990. Korea has an installed petroleum refinery capacity of 2.772 million BPSD (2006). Total generating capacity for electricity in 2006 (cf. table next page) was 65,514 MW divided between hydro (5,485 MW), steam (24,391 MW), combustion (16,301 MW) and nuclear facilities (17,716 MW), which is up from just above 50,000 MW in 2001. The generation of electric power was recorded at 403,124,255 MWh in 2007 divided between hydro (5,042,462 MWh), steam (178,162,936 MWh), combustion (76,981,751), and nuclear (142,937,106 MWh). As peak demand increased to 62,794 MW in 2008, new facilities were planned.

Electricity Generating Capacity in MW in 2006

Hydro Steam Combustion Nuclear Other Total 5,485 24,391 16,301 17,716 1,621 65,514 8.4% 37.2% 24.9% 27% 2.5% 100%

Source: kosis Note: ‘Other’ is not directly specified in the statistics, but derived from the discrepancy in the numbers; percentages may not add up due to rounding The Korean electricity market is dominated by the government-controlled, KEPCO (Korea Electric Power Corporation), the country’s sole power distributor and its subsidiaries. Following a government announcement on deregulation of the electricity market in 1999, KEPCO separated into five independent non-nuclear operating subsidiaries and one nuclear power operator. They are Korea South-East Power Co. Ltd. (KOSEP), Korea Midland Power Co. Ltd. (KOMIPO), Korea Western Power Co. Ltd. (WP), Korea Southern Power Co. Ltd. (KOSPO), Korea East-West Power Co. Ltd. (KEWP), and Korea Hydro & Nuclear Power Co. Ltd. (KHNP). Together they control about 90 per cent of the nation’s electricity generation capacity. The government-controlled K-Water (Korea Water Resources Management) accounts for further 2 per cent. All generated electricity is purchased by KEPCO who is also the transmission and distribution asset owner. The Korea Power Exchange (KPX), another spin-off from KEPCO, monitors and manages the supply and demand balance, and operates the cost-based pool in which GenCos are paid a marginal price and a capacity payment price. As South Korea is effectively cut off from the Asian mainland – due to the politics of North-South relations – the country’s electricity network remains unconnected to other networks and is thus vulnerable to energy demand shocks, such as for example a jump in the international oil price or abnormally hot summers. Plans to privatise the five non-nuclear subsidiaries have so far not materialised, but their existence has introduced an element of competition into the market. The diversification of KEPCO’s operations into overseas markets, however, may indicate that the monopoly on power distribution could be coming off the drawing board. .

2 Petroleum products include fuel oil, non-fuel oil and LPG


8.4. State of the art of PV market The Korean PV market is pushed by proven prowess in the semiconductor and LCD markets as well as government ambitions. After the introduction of a feed-in-tariff scheme in 2002 the growth of solar PV has been rapid. It is the fastest growing solar market in Asia and will by 2010 be the biggest market in Asia and fourth largest globally, according to SOLARCON, a conference. Cumulative installed capacity solar PV (kW)

Source: Ministry of Knowledge Economy Electricity from solar PV remained at a modest level from its first installation in 1994 until 2002 when the government introduced a feed-in-tariff (FiT) scheme. The market grew to a cumulative installation of 77,601 kW in 2007, up from 5,410 kW in 2002 (see figure above). Installations in 2008 are reported to have grown six-fold year-on-year, boosting cumulative installation to about 274,000 kW. As of June 2009 a present installation of 312,474 kW has been reported by the KNREC. The total number of plant at the beginning of June was reported at 1,032, which is up from 1,006 plants at the end of April.3 The employment target for solar PV is set at an average annual increase of 15.3 per cent until 2030, according to the government’s ‘3rd NRE technology development and dissemination plan'. In the government’s ‘2nd plan for solar PV’ installation is targeted at 1.3 GW in 2012, also reflected in the ‘NRE RD&D strategy 2030’ which also targets 4 GW in 2020 and 18 GW in 2030. Targets have also been expressed in TOE, as seen below.

3 Please see the KNREC website for a list of the 1,006 plants. URL: http://www.knrec.or.kr/NA/ATTACH/090601_solargen.pdf

Off-grid domestic systems provide electricity to domestic units not connected to the electricity network. Off-grid non-domestic installations for various terrestrial applications

Grid-connected (distributed) systems provide power to customers connected to the electricity network, or directly to the network. Grid-connected centralized systems generate power not associated with a particular customer, and is solely supplying bulk power.

Source: Report IEA-PVPS T1-17:2008


Employment target for solar PV (TOE)

2008 2010 2015 2020 2030 33,000 40,000 63,000 342,000 1,882,000 Source: Ministry of Knowledge Economy As mentioned above, the government instituted the feed-in-tariff (FiT) regime in 2002, which was subsequently followed by a growth in solar power installations. The FiT was readjusted in the latter part of 2008 and government commitments are set to an optional period of 15 or 20 years. There is currently a 500 MW cap on the FiT scheme, up from 100 MW in 2007. A new feed-in-tariff adjustment is expected starting in 2010, from which yearly adjustments are likely (see table below). Feed-in-tariff scheme (Won per kWh)

Period Duration < 30 kWh

> 30 kWh

2002 to 2008.9

15 years 711.25 677.38 with 4 % support reduction after 3 years

Duration < 30 kW 30 kW > 200 kW

200 kW > 1 MW

1 MW > 3 MW

> 3 MW

2008.10~ 15 years 646.96 620.41 590.87 561.33 472.70

2009.12 20 years 589.64 562.84 536.04 509.24 428.83

2010.1 20 years Tba Source: Korea New & Renewable Energy Research Centre The current cost of electricity is roughly at 60 won/kW, while that of solar PV generated origin has a price tag of close to 700 won/kW. This compares, for example, with wind energy at above 100 won/kW and nuclear energy at 40 won/kW. The 100,000 solar roof program by 2012 aims to install PV systems with capital subsidies up to 60 per cent, down from 70 per cent earlier. As of 2007 PV systems had been installed on the roofs of 14,498 homes in total (19,710 kW), which is up from 5,964 homes in 2006 (7,337 kW), 907 in 2005 (2,356 kW), and 310 in 2004 (771 kW). A different deployment subsidy scheme is provided by the central government for 80 per cent of the installation cost, or in a regional variation in which the central government will pay only up to 60 per cent while the local government will pay for some parts as well. Local governments and cities may have various local incentives. There may also be special regulations for the construction of so-called new cities, or new real estate development areas. In particular, the Ministry of Land, Transport and Maritime Affairs, said in early June that all new public and residential buildings will be required to use a not yet announced share of NRE. Additionally, the Ministry will present a revision of the standards for planning and building new urban constructions. The 1 million green homes by 2020 program, targets the construction of carbon neutral homes by employing NRE technology. For installation of solar PV technology at below 3 kW the government will support up to 60 per cent of the installation. There is also mandatory spending on NRE installations of at least 5 per cent of total construction costs


in public buildings exceeding a floor area of 3,000 m2, and an income tax credit at 10 per cent for investments in NRE projects. As above, local incentives and/or regulations, may apply. The registration process with corresponding applications for the various incentives is accessible on the Korean language website of KEMCO’s New and Renewable Energy Centre (http://www.energy.or.kr/). Basically it starts with a request for evaluation and a test or evaluation of the product, which is followed by a request for and issuance of certification. The designated certification body is KNREC.

8.5. PV value chain Market players by product category (not exhaustive)

Polysilicon

Ingot, Wafer Solar cell Module PV System

OCI Company. KCC Corp. LG Chem Woongjn Samsung Chemicals

Hankook Silicon Woongjin Polysilicon

Hanhwa

Woongjin Energy Siltron SKC Co. Kolon REXOR Glosil Inc. Nexolon NEOsemitech Smart Application Qualiflow Naratech

KPE Solar Hyundai Heavy LG Electronics Hanhwa Chemical STX Solar Samsung Electronics

KCC Information & Communication Corp.

Shinsung Engineering

Millinet Solar Kisco

Symphony Energy S-Energy Hyundai Heavy LG Electronics Samsung SDI KD Solar Unison Solar Tech Haesung Solar ETA Solar

Hyundai Heavy LS Industrial Systems LG Solar Energy Hyosung Samsung Everland Hexpower Willings Dastech HY

Source: Ministry of Knowledge Economy; various Note: not all companies may have a manufacturing line at present At the end of 2008 Korean annual production capacity for polysilicon was at 5,100 tonnes divided between OCI Company with a capacity of 5,000 tonnes and KCC Corporation with a capacity of 100 tonnes. Other expected entrants for commercial production are LG Chem, Woongjin Polysilicon, Samsung Petrochemicals, Hanhwa Petrochemicals, SKC, Hangook Silicon, and Jinheung. These players while not yet in commercial production, have already entered deals for future delivery. Woongjin Polysilicion, for example, has made a $508 million deal to supply Hyundai Heavy Industries between 2011 and 2015. Additionally, the company Sodiff has a production capacity of 300 tonnes of monosilane. OCI Company, formerly DC Chemical, commenced production in early 2008 and seeks to expand its current plant capacity by 1,500 tonnes, start constructing a 10,000 tonnes plant in 2009, and another 10,000 tonnes plant in 2010. Based on these expansion plans analysts at Samsung Securities believe OCI has the potential to become the world’s second largest polysilicon maker in 2010 with a market share of 18 per cent. Supporting


this view is the fact that OCI has developed its own patents, has more than half a century experience production experience from the chemical industry, owns factory land for expansion, and more than half its current capacity is already locked into long-term contracts through 2012. KCC Corporation, Korea’s no. 1 manufacturer of paint and glass, plans a 3,000 tonnes production plant, at which test operations initiated in 2007 have been followed by production start. Additionally KCC plans another 3,000 tonnes capacity facility through Korea Advanced Materials, a 51 per cent owned joint venture with the world’s largest shipbuilder Hyundai Heavy Industries (HHI). It is highly likely that KAM will be a supplier to HHI who are already running a solar PV plant of 30 MW with expansion plans to 300 MW. The ingot and wafer production capacity for 2008 has been reported at both 216 MW and 400 MW, by the Korea Photovoltaic Development Organization (KPVDO) and the Korea Institute of Energy Research (KIER) respectively. As the KIER figure was reported at the end of the year, this probably reflects the rapid manufacturing expansion currently taking place. Among the biggest ingot producers is Woongjin Energy, a joint venture between Woongjin Holdings of the Woongjin Group and the Silicon valley-based SunPower Corporation, the latter to whom it will deliver a substantial part of its production. The production facilities in Daegu, Korea’s centre for science and technology, is said to be the largest in Korea covering more than 46,000 m2. Polysilicon is mainly sourced from the above mentioned OCI Company. Nexolon, a wafer producer, is also aggressively expanding targeting a manufacturing capacity of 1,000 MW in 2011, up from 150 MW in 2008. As many others players it believes economies of scale and continuous technology improvement will make solar PV competitive. The multi crystalline silicon solar cell field has been dominated by KPE, with a current manufacturing capacity of 96 MW, almost a third of Korea’s total production capacity of 300 MW. Other companies, such as Hyundai Heavy Industries, Millinet Solar, Sinsung and STX Solar, have started production lines with a capacity of 30 to 50 MW. As these and other companies are aggressively entering production capacity may rise to 915 MW in 2009, according to Displaybank, a consultancy. Furthermore, in 2010 this capacity is forecasted to double, reaching 4.5 GW in 2012. The 2008 modules production capacity has been reported at 370 MW. The two companies KISCO and Alti-Solar have also developed a 20 MW production capacity for thin film-modules. There are currently more than a thousand solar PV plants of various sizes, as mentioned earlier. They are spread throughout the country, which is about three and a half times smaller than Norway. More than 70 of the plants are of 1 MW or bigger. This includes the 14 MW Taean and 24 MW Sinan solar plants, opened in summer and autumn 2008, with annual capacities of 33,000 MWh.4 Many of Korea’s global chemical and construction and installation companies, such Dongyang, Hyosung, Hanhwa, LG, etc. are active in construction and operations of solar PV plants. The plant at Taean is operated by LG and the plant at Sinan by Dongyang. They were both the largest in Korea at their time of completion. The plant at Sinan remains the largest in Korea and Asia. For project financing KDB (Korea Development Bank) is the biggest player. IBK (Industrial Bank of Korea) has also launched a Green Growth Loan Program to support NRE development. The government has announced its intention to launch a Green Fund

4 Cf. footnote 3 above


with a special mandate to support NRE technology development and NRE businesses. Private financiers are also available, and all major international banks are present in Korea. For example, the plant at Sinan, mentioned above, was project financed by Standard Chartered.

8.6. Sector organizations Besides various organizations that cover several NRE sources are a few solar energy related associations. The most recent entrant is the Korea Solar Electric Power Association (KSEPA), which was established mid-January 2009 as an industry interest organization (http://www.ksepa.org/). The two year older Korea Photovoltaic Power Generation Cooperation (KPPC) was established in 2007 as an industry interest organization for information exchange and studies of PV power generation and the solar PV market (http://www.kppc.kr/). The Korean Solar Energy Society, established in 1977, is a technological body composed of individual members. European interests are advocated by the EUCCK (European Union Chamber of Commerce Korea), which is open for memberships for and companies and individuals from Norway as well. The main lobbying tools of the organization are its 27 sector committees, including one for environment and energy. There is also a liaison office with offices in Paris and Brussels, the Europe-Korea Industrial Cooperation Agency (EUKCIA). National solar PV research has been led by the Korea Photovoltaic Development Organization (KPVDO), established in 2004, and being run from Korea University, which has been appointed to plan and manage solar PV R&D programs. Programs involve private companies, national research institutes, and universities. Much of the research focuses on higher efficiency and future generation technologies, such as dye-sensitized solar cells, as well as demonstration and infrastructure programs. There are several national research institutes devoted to research into energy issues, including RD&D on solar PV. Prominent among them is Korea Institute of Energy Research (KIER http://www.kier.re.kr/) carrying out research on industrial NRE technologies and energy efficiency; Korea Energy Economics Institute (KEEI http://www.keei.re.kr/), which conducts research on energy policy and advises the government on many energy and climate related issues; and Korea Institute of Science & Technology (KIST http://www.kist.re.kr/), which has been involved in a government-led BIPV module development project and also conducts research on next-generation solar PV technologies; and the Electronics and Telecommunications Research Institute (ETRI http://www.etri.re.kr/) has been involved in thin-film research, among others. Additionally several universities have their own solar PV research centres or programs. Among them are Korea University, Inha University, Hanyang University, Catholic University, Choenbuk University, Korea Advanced Institute of Science & Technology (KAIST), Gwangju Institute of Science & Technology (GIST), Kangwon University, Youngnam University, and Seoul National University. Energy statistics is presented by the Korea Energy Economics Institute (KEEI) and the Ministry of Knowledge Economy (MKE). These data are also available through the Korean Statistical Information Service (KOSIS).


8.7. Market dynamics and future developments Solar PV is regarded as a market in which Korean manufacturers have the potential to become globally significant. In 2008 companies such as Samsung Electronics and Hynix held a combined market share of 49.1 per cent in semiconductor memory chips, while Samsung Electronics and LG Display together held 38.5 per cent of the TFT-LCD market, according to the MKE who believes the infrastructure in these areas is expandable to the solar PV market. Korean actors are likely to be heavily geared towards export and willing to take on substantial scale in production. With a national beam radiation average of 4,441 Kcal/m2day, Korea is also well suited for system installation. National targets and expected market size (annual installations and market size in US$ million)

Source: KNREA From the government’s second national plan for solar PV the cumulative installation target in 2012 is approximately 1.3 GW when the market will reach about US$ 2,250 million (cf. figure above). Samsung Economic Research Institute (SERI), a private think tank, similarly estimates the market at US$ 2,390 million in 2012. The government is currently rolling out promises of financial incentives as a part of its “low carbon, green growth” paradigm for national development (cf. next section), and as a response to the current economic distress. Additionally, solar installations seem to enjoy high public acceptance relative to for example wind and hydro power stations. Grid parity for NRE as a whole is targeted by 2020, but many believe grid parity for solar PV can be achieved sometimes after 2012. SERI, a think tank, believes a critical mass to support grid parity may be in place in 2015. A revision of the feed-in-tariff in autumn 2008 has greatly slowed the pace of new installations. It is therefore likely that the growth rate of the previous years will not be repeated in 2009. Partly depending on the new FiT scheme soon to be announced, and given other economic factors such as the exchange rate, the market is expected to pick up pace again in 2010. The cut in the FiT may be seen in relation to the traditional export orientation of the Korean government. The huge inflow of solar PV technology imports are sought to be gradually exchanged for national technology. Indeed, ambitions are harboured to make


Korea a net exporter of solar PV technology, achieving a 10 per cent market share by 2020. The green growth initiative prepares the introduction of a Renewable Portfolio Standard (RPS) in 2012. Such a standard mandates electricity providers and the industrial sector to include RNE sources in their energy portfolio. A Renewable Portfolio Agreement (RPA) is already in place, with nine public companies committed. The goal of the RPA is the same as that of the RPS, but is a voluntary agreement with the government and not a mandatory target. The RPS is, similar to the FiT regime, a way of increasing the use of NRE. While the FiT is a price-oriented policy, the RPS is a quantity-oriented mechanism. The two may therefore be used in combination, but it is also possible that the FiT level may be reduced after the introduction of the RPS. Electricity demand is expected to increase annually by 2.2 per cent on average during the period of 2007-2020, and peak demand is expected to increase by 1.8 per cent annually on average in the same period. The installed reserve margin is expected to be 5.8~8.3 per cent until 2011, after which it is forecasted at 11.7~23.5 per cent until 2020. Construction intents for 66,136 MW have been submitted for 2008 to 2022 by the five major GenCos (25,400 MW) and nine private GenCos (12,600 MW).5 Of this 6,456 MW, or 9.7 per cent, have been submitted as NRE intents (cf. table below). A retirement of 22 units (3,886 MW) is also planned in the period. Intents for capacity installations of smaller units are not included in the demand expectations.

Renewable facilities expansion (2008 ~ 2022)

Classification Hydro Wind Ocean Solar Biomass Waste Gas (by-product)

Fuel cell

IGCC/ CCT

Total

Under construction

16.1 108.7 254 121.6 0.7 40.3 900 26.5 567.9

Submitted construction

intents

66.0 237.6 2,826 19.4 - 3.0 - 9.6 600 4,661.6

RPA agreement

5.4 111.0 1 16.9 - - - 1 135.3

Licensed to do business

0.1 225.5 - 849.8 3.2 6.8 - 6 1,091.4

Total 87.6 682.8 3,081 1,007.7 3.9 50.1 900 43.1 600 6,456.2

Source: The 4th Basic Plan of Long-Term Electricity Supply and Demand (2008~2022)

5 The private GenCos are POSCO Construction, Daelim, SK Construction, POSCO Power, GS Power, GS EPS, Meiya, DOP Service, and Hyundai Green Power.


The political-legal framework for NRE development is currently being framed by President Lee Myung-bak’s “Low carbon, green growth” national developmental paradigm. The main aim of “Low carbon, green growth” is to create jobs and economic growth from green technology. It recognizes that Korea cannot enjoy continued growth from its traditional industries and must find new engines of growth. Due to the recent economic distress a short- to mid-term stimulus package of 50 trillion won called the “Green New Deal” has also been announced to promote green growth and job creation. In addition, a blueprint for the development of 17 new growth engines, of which six are related to green technologies, has been announced with a fiscal support tag of 24.5 trillion won in the period 2009-2012. The “Green New Deal” of the Korean government announced in early 2009 is the largest stimulus package (approx $38.1 billion) as a share of the national economy of all crisis struck nations, according to the Financial Times. Furthermore, the research team at HSBC, a banking group, estimates that this package has, at 80.5 per cent, the highest share dedicated to climate-related investments. The first basic plan for national energy 2008-2030 is the main guideline for energy policies for the next five years, after which a new national energy plan for a minimum of ten years will be drafted. In this plan NRE plays an important part in all four main goals of (I) improving energy efficiency and reducing energy consumption; (II) boosting the supply of clean energy and reducing the use of fossil fuels; (III) developing a green energy industry; and (IV) ensuring a stable and affordable supply of energy. More specifically the use of NRE will increase to 11 per cent of total energy consumption by 2030, up from 2.4 per cent in 2007. The use of solar PV will have to jump 44 times from its 2007 level. Korea is a party to the United Nations Framework Convention on Climate Change, but as a ‘developing country’ (non Annex-I) it has no binding targets under the Kyoto Protocol. However, most observers expect the Korean government to assume some obligations under a post-Kyoto regime. Signals from the government also strongly indicate that Korea is ready to take upon itself some yet unspecified level of commitments. Due to the large share of the industrial sector in the Korean economy, and this sector’s extremely rapid expansion since 1990, it is possible that Korea may argue for a sector-based approach to international commitments. Alternatively it may side with the camp that advocates a base-year for emission reduction commitments other than 1990. Korea is among the world’s ten largest GHG emitters and a national target for GHG cuts based on a feasibility study is also expected during 2009. The implications of becoming a signatory to the successor of the Kyoto regime will firstly be Korea’s withdrawal from the stage as the world’s largest CDM market. South Korea was the market for 14.6 million CERs at the end of 2008. Secondly, Seoul may develop an internationally integrated carbon market. There is already a local carbon exchange market in place, in which companies sell cuts in GHG emissions to state-run public companies participating in the Renewable Portfolio Agreement (RPA). Consequently a supply and demand mechanism, registration and verification bodies have been established. In the period 2006~2008 2.867 million tCo2 was certified. And thirdly, the government in concert with business will have a stronger political incentive to act on emission reductions. The market is dominated by vertically integrated conglomerates whose family origin is still heavily influential. Some, such as HHI and STX, have ambitions to participate at every step of the value chain for solar PV, and enter other NRE markets such as for


example wind and fuel cells as well. Furthermore, the biggest players are likely to seek integration globally as well. Samsung, for example, has teamed up with Siltronics, a German company, to produce ingots in Singapore. Industrial development in Korea has been characterised by the presence of family-controlled vertically integrated conglomerates, and their close relationship with the government. Technology development blueprints and product development roadmaps are produced largely as a result of consultations between these two major players. The conglomerates are still dominant in Korean society although many of them were broken up and restructured following the financial crisis in 1997-98. The Korean economy has also undergone substantial liberalisation both preceding and following the crisis. The solar PV field has seen smaller companies emerge as well, and the technology level of Korean companies has allowed a major presence of foreign companies through exports and technology transfer.

8.8. Other solar technologies of importance As mentioned in the sector associations and bodies section, Korea has several research institutes and facilities devoted to solar PV research. In terms of research areas, efficiency improvement and next-generation solar cells are the ones of highest national importance. In the government’s roadmap 1st (Si) and 2nd generation solar cells (Si Film, CIGS) will be developed domestically and be commercially competitive by 2015, and 3rd generation cells (dye-sensitized, organic) by 2020. There is currently 1 registered Solar Thermal Power plant in operation in Korea. SinAn Power pant has peak power of 24 MW, and is capable of delivering 33 GWh annually. The plant was completed in October 2008. Daesung Group, an energy-focused business conglomerate, is in the process to build a solar thermal power plant in south-eastern South Korea. The tower-type plant with 200 kilowatts of generation capacity will be built at a site near the city of Daegu, 302 kilometres southeast of Seoul.


8.9. Sources Displaybank. URL: http://www.displaybank.com/

Energy Economy News. URL: http://www.ekn.kr/

HSBC. Climate for Recovery: The colour of stimulus goes green (25 February 2009)

Good Morning Shinhan Securities. various

IEA – Photovoltaic Power Systems Programme. URL: http://www.iea-pvps.org/

Korea.net. URL: http://www.korea.net/

Korea Electric Power Corporation (KEPCO). URL: http://www.kepco.or.kr/

Korea Energy Management Corporation (KEMCO). URL: http://www.kemco.or.kr/

Korea Energy News. URL: http://www.koenergy.co.kr/

Korea Investment & Securities Co., Ltd. various

Korea IT Times. URL: http://www.koreaittimes.com/

Korea New & Renewable Energy Centre (KNREC). URL: http://www.knrec.or.kr/

Korea Power Exchange (KPX). URL: www.kpx.co.kr

Mirae Asset Research Company Analysis (various)

Ministry of Knowledge Economy (MKE). URL: http://www.mke.go.kr/

Organization for Economic Co-operation and Development. (OECD) OECD in Figures 2008

Samsung Securities. Equity research: In-depth Report (various)

Solar Today. various issues


9. SPAIN

9.1. Acronyms and definitions AEF: Photovoltaic business association APPA: Association of producers in renewable energies ASIF: Spanish Fotovoltaic Solar Association CECRE: Control Centre of Renewable Energies (Cecre) IDAE: Institute for Diversification and Saving of Energy MITYC: Ministry for Trade and Industry Pre register: An obligatory register constructed to control the regiment of new installations – registration in advance of new installation – before feed in tariff is set. It is now necessary to register the installation in advance. Type I: roof top facilities Type II: on-the-floor facilities

9.2. General data about Spain Inhabitants: 46 million inhabitants Population density: 92,21 inhabitants/km2 Main cities inhabitants: Madrid (3,1 million inhabitants), Barcelona (1,5 million inhabitants), Valencia (979,600 inhabitants), Sevilla (699,000 inhabitants), Zaragoza (654,000 inhabitants) Public Administration: Central Government in Madrid 17 Autonomous Communities GDP 2008: 1,062,769 Million Eur GDP growth 2008: -3.0% Expected growth 2009: NA GDP pr. Capita: 24,020 euros


9.3. The Spanish energy Market Figure 4: The energy structure in Spain 20086

In general Spain is a very energy dependent country compared to other European countries; their energy production of the total consume in 2008 was 21, 6 % of which 51 % came from Nuclear energy production7 and almost all of the remaining energy sources are renewables: Figure 5: Energy production in Spain 2008

6 Secretaria de Estado de Energia, Ministerio de Industria, Turismo y Comercio, Energy report 28.04.2009, p 3 7 Secretaria de Estado de Energia, Ministerio de Industria, Turismo y Comercio, Energy report 28.04.2009 p 21


At the same time as nuclear energy is Spain’s largest energy production source, the government recently announced that Spain will decrease the number of nuclear power plants. The renewable energy sector could also be decisive in the intent to recover economically after the financial crisis. According to Earnst&Young’s attractiveness index for renewable industries among one of the most interesting countries for investments in renewable energies: Figure 6: attractiveness index for renewable industries:

Figure 7: Plan for the development of electricity production with renewable energies 20208

The Spanish government is committed through the Kyoto agreement to cut emissions and is working to increase the share of renewable energies9 in the energy production

8 http://www.plane.gob.es/plan-de-energias-renovables-2011-2020/ (in Spanish)


which should cover 20 % percent of the energy consume by 2020. To achieve this, the governmental plan for development of electricity production with renewable energies for 2011-2020 has set binding objectives and obligatory minimums regarding the quota of energy that comes from renewable sources in the total energy consume.

9.4. State of the art of PV market General data about the Solar PV Industry Spain was number one in new installations in 2008 and responsible for almost half of the total growth in Solar PV capacity. Figure 1: New installed and total capacity 2008

The official number of total installed capacity by the closing of 2008 was 3204 MW and new capacity 2281 MW. The cumulated power in Spain increased more than 4.5 times from 2007. The world leader on solar PV energy, Germany’s total installed capacity in 2008 was 5308 MW and new capacity was 1500.

9 Plan de Energías renovables 2011-2020

Germany Japan* France0

1000

2000

3000

4000

5000

6000

Spain UnitedStates

Italy*

Total Capacity 2008

Source: SEIA

New Capacity 2008


Figure 2: Map over the irradiance level Europe

Spain enjoys the highest sun-radiation level in all of Europe Figure 3: Distribution of installed PV capacity by regions January 2009

Source: InvestInSpain


Spanish Market Overview Incentive schemes: In September 2008 the new legislation for the photovoltaic (solar energy) industry was approved. The law replaced the old RD 661/07 – which allowed a boom of the solar PV industry in Spain. According to EPIA the global solar (PV) market grew to at least 5.5 GW in 2008 compared to 2.4 GW in 200710. Spain ranks first, not even Germany could keep up. There has been expressed a lot of scepticism to the new feed in tariffs that became effective the 29th of September 2008. Mainly because of the cap set to 500 kWh for 2009. As mentioned the total capacity in Spain 2008 ended on 3204 MW, which implies that the growth in new capacity for 2008 in total was 2281 MW, much higher than the goal set for the whole year which was 371 MW. With the cap for 2009 set to 500 MW it is evident that the growth will slow down dramatically compared to 2008. None-the-less the exceptionally good feed in tariffs of the Royal Decree from 2007 could at the same time have threatened the process of reaching grid parity. According to Miguel Bunuel11 there is a need to foster R&D to develop the industry and to reach grid parity. As a part of this process only the most effective companies should survive. Although the growth in 2009 will not be as high as the growth last year, the growth will continue and with the cap the PV-industry in Spain will settle at a sustainable growth level. About the cap: two thirds of which will go to rooftops, with the rest going to ground-mounted facilities. An additional 100 MW and 60 MW cap has been added to the 2009 and 2010 counts, respectively, to be used only on ground-mounted facilities. The annual caps will be increased by the same percentage as the one by which the feed-in tariff is reduced for that same period, with a limit of 10% (i.e. if the feed-in tariff is reduced by 8%, then the cap will be increased by 8%). The feed in tariffs set for 2009 The feed-in tariff12 was cut to 0.32 Euros/kWh for type II on-the-ground facilities, and with the following quotas for new facilities in 2009: 1) 267 MW for type I facilities (on-the-roof or on-the-wall facilities). 2) 233 MW for type II facilities (on-the-ground facilities). The feed in tariffs will be reduced if goals are met. New tariffs after the first gathering: type I remains the same, type II was reduced to 30.72 cts. €/kWh13. After the second gathering the tariffs for type two was reduced once again to 29.91 cts.€/kWh14

10 Report released by EPIA 20.03.2009 – (European Photovoltaic Industry Association) 11 “More news on the Spanish Photo Voltaic (PV) solar market” by Miguel Bunuel, Executive President, EnvEco Consulting 12 Royal Decree: BOE RD 1578/2008 13 TribunaJuridica: http://www.energetica21.com/articulos/tribuna_juridica/2009/Promein.pdf


The concern is the fact that with the cap set to 500 after a year with an increase of more than 2000 MW this means an enormous decrease in growth in 2009 - both in Spain and on a Global basis. The register for pre-assignment To control the regiment of new installations it is now necessary to register the installation in advance. The idea of the register is that once all the paperwork is completed for each project and the necessary permits are given, then a register will file all of them, informing right then about the feed-in tariff the project is entitled too once the construction work is finished. The pre-register will have four annual calls and the feed-in tariff in each one of them will be calculated according to the demand from the former call, with drops in the subsidy that could top 10% per year if the whole cap is met. The yearly cap on 400 MW (+100 +60) is divided into four parts corresponding to the limit for each type of installation. If the cap is exceeded the remaining companies will have to wait to the following quarter to come in under the next quota. At the end of the year the general management of energy and mining politics will add up how much the feed in tariffs have been diminished and the quotes will be raised accordingly (if the quota does not reach 50% within two consecutive meetings the feed-in tariff can be raised – but this is not very likely as of today) If you do come in under the cap – you are entitled to the same feed-in tariff for 25 years Problem: The publishing of the results for the first call in 2009 was delayed more than a month. The reason according to the authorities was the fact that there were a lot of errors in practically all of the applications. The delay also caused a higher number of applications that would have to be analyzed, which implies that the feed in tariffs with the new law still are attractive and profitable. Figure 8: Publication of applications from the second call of the pre-register

Nr of applications Total Power (MW)

Quarterly cap 6,675 Registered 273 3,63

Type: I.1 Same as, or less than 20 MW Not admitted 166 2,51

Quarterly cap 60,075 Registered 233 31,69 Type I.2

More than 20 MW Not admitted 216 32,39 Quarterly cap 58,25 Registered 225 94,72 Not registered 1053 924,82 Type II

On the floor facilities Not admitted 359 323,48 731 130,05

14 Energias renovables, ”Industria inscribe 731 solicitudes en el registro fotovoltaico” 23.04.2009


The delay caused a lot of discontent in the sector. According calculations done by ASIF (Asociacion de la Industria Solar Fotovoltaica) it has caused a stand still of the industry and the loss of 10- to 15.000 workplaces15 The second call was also criticized for delays, but this time the delay only was one week. For the second meeting 731 applications were registered. In total 2720 petitions of inscriptions had been made, but out of these 193 was cancelled by the applicants, and 734 were not admitted for being either incomplete or incorrect. The remaining 1053 has not yet been registered as the Royal Decree demands the selection to be done chronologically according to when the petitions have been done. The cap for on-the-ground facilities was covered again in the second quarter. The registered facilities for the 2nd quarter were about 10 % of the entered applications. The roof-top facilities on the other hand have still not been covered. The new feed in tariffs for on-the-floor facilities will therefore in the 3rd quarter gathering be decreased to 29.91 cents while type I.1 and I.2 stays the same. The next gathering is to be held around the 1st of July.

15 Energias renovables (20.02.2009) ” Industria autoriza 392 instalaciones en la primera convocatoria de la nueva regulación fotovoltaica”


9.5. PV value chain

Metallurgical Silicon: FERROATLANTICA Polysilicon: ISOFOTÓN SILIKEN Wafer: SILICIO SOLAR DC WAFERS Cell Production BP SOLAR ISOFOTÓN INSTALACIONES PEVAFERSA SOLARIA Modules ATERSA BP SOLAR

GAMESA SOLAR ISOFOTÓN ALEO SOLAR ENSOL EURENER PEVAFERSA SILIKEN SOLARIA CUANTUM SOLAR GRUPOSOLAR IATSO VIDUR SOLAR YOHKON ENERGIA Concentration

ISOFOTÓN GUASCOR SOL3G Inverters/ rectifiers ATERSA ECOTECNICA ENERTRON INGETEAM SILIKEN ZIGOR SOLUCION ENERGÉTICAS FAGOR AUTOMATION GREEN POWER

JEMA Batterys AEG POWER SOLUTIONS TUDOR Technology Centres CENER FUNDACION CIRCE IES INSTITUTO DE TECNOLOGIA MICROELECTRONICA ISFOC TECNALIA

The Spanish value chain in PV Industry complete16

16 Invest in Spain, February 2009; Ministerio de Industria, Turismo y Comercio

Silicon

processing

Solar grade

Silicon processing

Ingot and wafer

production

Cell

production

Module

production/ Assembly

System

distribution

Installation

and operation

Among developers there are companies like ABENGOA, ACS, ACCIONA, ARIES, COBRA, ENDESA, ENERSTAR, ENHOL, IBERDROLA, SAMCA, SENER, SOLAR MILLENIUM, UNION FENOSA, VALORIZA Engineers: ABENGOA, FLAGSOL, IBERDROLA, SENER Components: ABENGOA, CRISTALERÍA, ESPAÑOLA, FLABEG, RIOGLASS SOLAR, SCHOTT, SENER, SOLEI Project financing http://www.csptoday.com/eufinance/es/index.shtml ) Support programmes for strategic projects and investments in energy saving and efficiency. The IDAE, a state-owned business entity reporting to the Ministry of Industry, Tourism and Trade, who work to promote the use of renewable energy sources and improve energy efficiency, has set up a loan facility to finance investments in solar-thermal, and standalone photovoltaic projects, among others. The aim is to improve, optimize and complement the resources that the autonomous regions are facilitating to the market. Beneficiaries may be natural persons, SMEs, homeowners' associations, municipalities, and other public bodies, institutions depending on them and entities in other legal forms, excluding large companies. They may apply for just one operation, and the participation of the same natural or legal person in other beneficiary entities with legal personality will be taken into account, such that a single natural or legal person may not take part in two or more applications of the same kind, regardless of the percentage share it has in the beneficiary entities. SME CONDITIONS (In accordance with European Commission Recommendation 2003/361/eC) No. employees < 250 Interest held by other company < 25% Turnover <= 50,000,000 euros Balance sheet total <= 43,000,000 euros What types of investments are financed? New plant and equipment assets of the following types:

• Standalone solar photovoltaic Electricity generating system converting solar radiation into electricity through solar photovoltaic panels not connected to the distribution grid. If the system has electricity storage, this must be able to meet demand from the load for at least 72 hours. Eligible items include: the cost of equipment and plant, photovoltaic arrays, accumulators, regulators, inverters, cabling and connections, and associated civil engineering work (provided it does not exceed 20% of the eligible investment), commissioning, supervision and engineering of the project, technical documentation, manuals for use and operation, processing of permits and aid. The main applicants may be: The owners, whether individuals or companies, of the following applications: domestic electrification, mountain huts, rural tourism, agricultural and livestock applications, water pumping, irrigation systems, greenhouse lighting, etc.

• Solar thermal facilities with power of >= 20 kW Solar energy installations using elements to heat a fluid from directly collected solar radiation, by means of officially approved solar panels, for use in thermal applications. Eligible items include: the cost of the solar array field, including the panels, structure, interconnections between arrays, etc,; storage consisting of tanks, heat exchangers,


circulation pumps, expansion tanks, etc.; civil works (provided they do not account for more than 20% of the eligible investment); and where applicable, absorption machines to produce chilling; and regulation, control and monitoring. Potential applicants may be: owners, homeowners' associations, companies and public administrations. Tax deduction for investigation, development and innovation technology17 Up to a 100% of the reference cost of the project can be financed. The public system for R&D is financially compromised to the development of R&D projects in the PV solar energy sector

• European funds • National funds (CDTI, IDEA, Profit) • Regional funds

9.6. Sector organizations APPA: Association of producers in renewable energies – main association on renewable energies in Spain. Gathers about 500 companies and entities that develop all the clean technologies: Biofuels, biomass, wind, geotermical, hydraulic, marine, mini-wind, solar PV and solar thermoelectric. ASIF: A forum for companies working within the Spanish sector for Solar PV energy. (private non-profit organisation) Work with the promotion and development of the industry Help judicial and physical persons who want to produce or use solar PV energy Lobbying and networking to promote the production of Solar PV energy AEF: Photovoltaic business association (private non-profit organisation) - Founded 27th of July 2008 – lobbying for the PV Solar Industry CECRE: Red Eléctrica has started up a Control Centre of Renewable Energies (Cecre), a worldwide pioneering initiative to monitor and control these energy resources. Cecre allows the maximum amount of production from renewable energy sources, especially wind energy, to be integrated into the power system under secure conditions. Cecre is an operation unit integrated into the Power Control Centre (Cecoel). The generation of the renewable energy producers, which have been set up in our country are managed and controlled by Cecre. With Cecre, Spain has become the first country worldwide to have a control centre for all their wind farms of over 10 MW. IDAE: The Instituto para la Diversificación y Ahorro de la Energía (Institute for Diversification and Saving of Energy, or IDAE) is a state-owned business entity that reports to the Ministry of Industry, Tourism and Trade through the General Secretariat for Energy.

17 http://www.idae.es/index.php/mod.pags/mem.detalle/idpag.114/relcategoria.1160/relmenu.57


The two main poles guiding the institution's activity are achieving the targets set by the 2007-2012 Action Plan under the Spanish Energy Saving and Efficiency Strategy and those of the Renewable Energy Plan for 2005-2010 MITYC: Ministerio de Industria, Turismo y Comercio

9.7. Market dynamics and future developments “Spanish Solar PV market to be hit by Trimming of Subsidies and Credit Crisis The Spanish Solar PV market has grown tremendously over the years. With around 2,670 MW of annual installations in the year 2008 alone, the market has witnessed significant growth in the solar PV segment. The remarkable growth observed by the Spanish Solar PV Market has of late been impacted by the shrinking subsidies and credit crisis. This would have an adverse impact on the annual installations in the year 2009. GlobalData believes that in the long run, the Spanish Solar PV market will gradually grow and reach total capacity of 33,738 MW by 2020”18 The main perception of the Spanish Solar PV markets near future development seems to be that Spain will experience a decrease in growth in 2009 – 2010 as a consequence of the new caps on the feed in tariffs. The exceptionally good feed in-tariffs with the 2007 decree have caused an explosion in new PV solar energy producers and the next to years will be tough on many small and medium size energy producers. However the companies that survives the next two years will most probably see the market rising again and as commented above in the global solar market analysis Spain will then gradually grow and reach total capacity of its goal 33.738 MW by 2020.

9.8. Other technologies of importance: solar thermal As demonstrated above (The register for pre-assignment) the solar thermal market has not reached the caps set by the government. This means that there are great opportunities on this market to come in under the feed-in tariffs. Spain is number four in EU in use of solar thermal energy. The lack of Polysilicon (wafer/crystalline silicon) is pushing forward the development of thin film and other new PV technologies still in the research and development stage like Multi-union systems, Multi-band Cells, Full Spectrum Systems, Nano technology etc.

18 From the press release of Global Solar Photovoltaic Market Analysis and Forecasts to 2020


Figure 3: The development of new technologies:

Within thin film four different technologies stand out: a-Si (silicio amorfo) CIGS (Cuper, indio, galio, selenio), CdTe (Cadmino Telurio) and CIS (cuper, indio selenio). The amorphus silicon is a non-crystalline and the most popular technology at the moment. Many companies have invested in this product which have caused that the market share has increased by almost 40 %. Still, despite all alternatives in the market and under development Polysilicon is still the great dominator on the market 19.

19 ASIF Informe 2008


9.9. Sources IDAE SEIA MYTEC Energias Renovables


10. U.S. The United States’ energy consumption is the highest in the world. It may seem that the U.S. lags in the adoption of renewable energy, but the numbers clearly show that the country is not to be underestimated in this regard. A number of policy initiatives and large financial efforts are going into renewable energy, as well as numerous production and R&D efforts. Renewable production (excluding Hydro Electric Power) was 3% of the energy supply in 2008. The installed solar capacity by the end of 2008 was 1,100 MW of photovoltaic (PV) and 418 MW of utility-scale concentrated solar. This report will make an effort to explain the current U.S. situation as well as providing an insight into the future market opportunities for PV. In the research we conducted for this report we found numerous extensive resources describing the energy markets, the policies, the various incentive structures in the U.S. etc. We have chosen to highlight part of this information in this report, but we absolutely recommend reading the papers highlighted in Appendix D as well as in the appropriate chapters, for a better understanding of the U.S. energy markets. It is worth noting that a most of the U.S. energy policies related to renewable sources are handled on a state level and in many cases also on a city/county level. This report will not enter into specifics within each state, but we do seek to explain the differences and priorities between the states where this is relevant for the context of this report. Innovation Norway’s office in San Francisco has for several years worked with companies and organizations in the renewable space including solar. We have an extensive network within the California regulators as well as a number of city councils that we regularly interface with. We may therefore be slightly California biased. But, California has been and still is the most progressive state in the U.S. in terms of environmental policies and initiatives for renewable energy. The AB32 law was passed in 2006 and outlines aggressive goals for the reduction of greenhouse gases. At the time the law was passed, it was then the U.S. most progressive policy for carbon reduction through law. Other states and eventually the federal government tend to follow California’s initiatives. Because of California’s special position related to renewable energy, we have included case studies from San Francisco and Berkeley, two cities on the leading edge of renewable policy, for solar power systems. San Francisco being the city in California with the largest installed base of solar panels per capita; Berkeley with the first initiative to have the cost of solar panels amortized over increased property tax. We believe that these examples will be adapted by other cities and states later.


10.1. Acronyms and definitions RPS............. Renewable Portfolio Standards

DG.............. distributed generation

GW ............ gigawatt

GWh ........... gigawatt-hour

IOU ............ investor-owned utility

LSE ............ load-serving entity

MW ............ megawatt

MWh .......... megawatt-hour

POU ........... publicly owned utility

PRC ............ public regulation commission

PSC ............ public service commission

PUC............. public utilities commission

PV .............. photovoltaics

REC ............ renewable energy certificate

RPS ............ renewables portfolio standard

TWh ........... terrawatt-hour


10.2. General data about U.S. U.S. Population according to the census bureau was 307,026,892 as per July 28, 2009 – 4.52% of world population. Figure 1. U.S. Population Density - 2000

2000 U.S. population density each county, in persons per sq. mile (lower 48 states only): Light to dark (yellow to blue): 1-4 (y), 5-9 (lt. green), 10-24 (teal), 25-49 (dk. teal), 50-99 (blue-green), 100-249 (blue), 250-66,995 (black). As of July 2009, the United States has a total resident population of 307 million. It is a very urbanized nation, with 81% of the population residing in cities and suburbs as of mid-2005 (the worldwide urban rate was 49%). The mean population center of the United States has consistently shifted westward and southward, with California and Texas currently the most populous states. The total fertility rate in the United States estimated for 2008 is 2.1 children per woman, which is roughly the replacement level. However, U.S. population growth is among the highest in industrialized countries, since the vast majority of these have below-replacement fertility rates and the U.S. has stronger immigration. Accordingly, the United States Census Bureau shows an increase of 0.95% between November 2007 and November 2008 for the resident population. Nonetheless, though high by industrialized country standards, this is below the world average annual rate of 1.19%. Long term, the U.S. growth rate is projected to surpass that of the world at large, per Census Bureau projections of 439 million in 2050, which is a 46% gain from 2007. However, the United Nations projects the U.S. population to grow from 306 million in 2007 to 402 million in 2050, an increase of 32%, less than the world's 38%. People under 20 years of age make up over a quarter of the U.S. population (27.6%), and people age 65 and over made up one-eighth (12.6%) in 2007. The national median age was 36.7 years. Source: http://en.wikipedia.org/wiki/Us_population


The economy of the United States is the largest national economy in the world. Its gross domestic product (GDP) was estimated as $13.8 trillion in 2009. The U.S. economy maintains a high level of output per person (GDP per capita, $46,800 in 2008, ranked at around number ten in the world). The U.S. economy has maintained a stable overall GDP growth rate, a low unemployment rate, and high levels of research and capital investment funded by both national and, because of decreasing saving rates, increasingly by foreign investors. In 2008, seventy-two percent of the economic activity in the U.S. came from consumers. Source: http://en.wikipedia.org/wiki/US_economy

10.3. The U.S. energy market Figure 2. U.S. Primary Energy Consumption by Source and Sector – 2008 (Quadrillion Btu)

Source: Energy Information Administration http://www.eia.doe.gov/emeu/aer/pecss_diagram.html


Electricity Consumption

Figure 3. U.S. Total Energy Consumption growth – 2008

Figure 4. Residential Electricity Price


Figure 5. Energy Consumption across States, Top 10, 2007, MWh

0

50 000

100 000

150 000

200 000

250 000

300 000

350 000

400 000

TX CA FL OH PA NY IL GA NC VA IN MI TN KY AL WA MO SC NJ LA

Series1

Figure 6. Electricity Prices, States Cents per kWh, 2008

Cents per kWh

0

5

10

15

20

25

30

Hawaii

Conne

cticu

t

New Y

ork

Massa

chus

etts

Rhode

Islan

d

Alaska

New H

amps

hire

Maine

New Je

rsey

Distric

t of C

olumbia

Vermon

t

Marylan

d

Califor

nia

Delaware

Florida

Texas

Nevad

a

U.S. Tota

l

Penns

ylvan

ia

Michiga

nIllin

ois

Source: Energy Information Administration


Electricity prices in the U.S. vary significantly from state to state with the east and west coasts often being the higher priced. These variations do play a large role when investment analysis is done for solar. Renewable Energy in the U.S. The share of Renewable energy excluding Hydro in the US is 3% of which nearly 40% is wind. Figure 7. Renewable Energy as share of total Electricity, 2008

Coal49 %

Natural Gas21 %

Nuclear20 %

Hydroelectric6 %

Other 1 %

Renewables3 %

Figure 8. Renewable Energy as share of total Electricity, 2008

Wind42,04 %

Solar0,67 %

Other renewables57,28 %


10.4. State of the art of PV market At year-end 2008, the U.S. had about 8,800 megawatts (MW) of installed solar capacity. This included about 1,100 MW of photovoltaic (PV), 418 MW of utility-scale concentrating solar power, at least 485 MWTh (megawatts thermal equivalent) of solar water heating systems, and over 7,000 MWTh of solar pool heating systems. The U.S. ranks fourth in the world for cumulative installed solar electric power. Germany (with solar resources similar to that of Alaska) ranks first, Spain second, and Japan third. More than 18,000 individual PV systems were installed in 2008. These additions totalled 342 MW, of that 292 MW was grid-connected, an 81 percent increase over 2007 grid-tied capacity additions. Source: Solar Energy Industries Associations (SEIA) US Solar Industry Year in Review 2008 - www.seia.org/galleries/pdf/2008_Year_in_Review-small.pdf Table 1. Comparisons of States installed PV capacity

Grid-Tied PV Capacity in the States (MW-dc)

State Installed in 2008 Cumulative

California 178.6 530.1 New Jersey 22.5 70.2 Colorado 21.6 35.7 Nevada 14.9 34.2 Hawaii 11.3 15.8 New York 7.0 21.9 Arizona 6.4 25.3 Connecticut 5.3 8.8 Oregon 4.7 7.5 North Carolina

4.0 4.7

Others 15.3 36.4 TOTAL 292 791


Figure 9. PV capacity by Market Segment

Figure 10. PV System Installation by Market Segments

Solar energy potential in the US is very strong and when compared to Germany, the leading country in solar energy, it shows the tremendous opportunities that exist.


Figure 11. Photovoltaic Solar Resources - United States and Germany

For a good understanding of U.S. Solar Industry we recommend reading the full report: http://www.seia.org/galleries/pdf/2008_Year_in_Review-small.pdf and: http://www.seia.org/galleries/pdf/2008_Year_in_Review_Slides.pdf and: http://irecusa.org/fileadmin/user_upload/ASES_09/Sherwood-Market_Trends-ASES-May09.pdf U.S. Grid system An old grid with insufficient transmission that has seen little investments over the last years is recognized as one of the main challenges for the U.S. to increase its overall use of renewable electricity. Often the areas with high demands - urban locations - have little or no interconnect to prime areas for development of large scale renewable energy. There are a number of initiatives and legislation in the works mostly at state level and some at federal level, to improve this, but the insufficient grid system will continue to be a large issue for many years to come. Developers planning larger installations must carefully understand the grid structure in the area of interest.


“It is important to note that there is no "national power grid" in the United States. In fact, the continental United States is divided into three main power grids:

• The Eastern Interconnected System, or the Eastern Interconnect • The Western Interconnected System, or the Western Interconnect • The Texas Interconnected System, or the Texas Interconnect.

ECAR — East Central Area Reliability Coordination Agreement ERCOT — Electric Reliability Council of Texas FRCC — Florida Reliability Coordinating Council MAAC — Mid-Atlantic Area Council MAIN — Mid-America Interconnected Network MAPP — Mid-Continent Area Power Pool NPCC — Northeast Power Coordinating Council SERC — Southeastern Electric Reliability Council SPP — Southwest Power Pool WSCC — Western Systems Coordinating Council

The Eastern and Western Interconnects have limited interconnections with each other, and the Texas Interconnect is only linked with the others via direct current lines. Both the Western and Texas Interconnects are linked with Mexico, and the Eastern and Western Interconnects are strongly interconnected with Canada. All electric utilities in the mainland United States are connected with at least one other utility via these power grids. The grid systems in Hawaii and Alaska are much different than those on the U.S. mainland. Alaska has an interconnected grid system, but it connects only Anchorage, Fairbanks, and the Kenai Peninsula. Much of the rest of the state depends on small diesel generators, although there are a few mini-grids in the state as well. Hawaii also depends on mini-grids to serve each island's inhabitants.” Source: US Power Grid - http://www.eere.energy.gov/de/us_power_grids.html Figure 12. U.S. Grid Structure

Visualizing the grid: http://www.npr.org/news/graphics/2009/apr/electric-grid/


Renewable energy: policies, incentives, availability Feed-In Tariffs as widely adopted in Europe is not common in the U.S. and the growth of renewables is driven by a combination of policies and incentives:

• Renewable Portfolio Standards • Financial Incentives, Federal, State, and City/County Level. • Net Metering and Grid Availability • Solar Access Laws

For an extensive database of incentives and Programs for Renewable this website is excellent: Database of State Incentives for Renewables and Efficiency by North Carolina Solar Center and the Interstate Renewable Energy Council (IREC). Source: http://www.dsireusa.org/ Renewable Portfolio Standards A renewable portfolio standard (RPS) is a policy that requires electricity providers to obtain a minimum percentage of their power from renewable energy resources by a certain date. The focus on RPS has mostly been within the states, but the Congress and the Senate have passed versions of a Federal RPS, but that has not yet been signed into Law. It is expected that the Obama administration will introduce a federal RPS. Over the last year(s) more states have added RPS policies and several states have updated and strengthened theirs. The details of each states RPS varies, but in general it requires retail electricity suppliers to purchase a minimum quantity of renewable energy. Most often the purchasers are free to buy the least costly alternatives available. Typically the requirements increase over time. In addition some states allow trading of renewable energy certificates (REC). The states use some variations of compliance mechanisms and there are exceptions to the policies. Some RPSs have specific mandates for certain types of renewables, i.e. solar. It is expected to become more common to design RPS programs with focus on particular technologies. It estimated that within a few years RPS will cover ~50% of retail electricity sales. Recommended reading about RPS in the United States: Ryan Wiser, Galen Barbose “Renewable Portfolio Standards in the United States”: http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf State Level RPS Initiatives Currently there are 24 states plus the District of Columbia that have RPS policies in place. Together these states account for more than half of the electricity sales in the United States. Table 2. Overview of State Renewable Portfolio Standards State Amount Year Organization Administering RPS

Arizona 15% 2025 Arizona Corporation Commission

California 33% 2030 California Energy Commission

Colorado 20% 2020 Colorado Public Utilities Commission


Connecticut 23% 2020 Department of Public Utility Control

District of Columbia

20% 2020 DC Public Service Commission

Delaware 20% 2019 Delaware Energy Office

Hawaii 20% 2020 Hawaii Strategic Industries Division

Iowa 105 MW Iowa Utilities Board

Illinois 25% 2025 Illinois Department of Commerce

Massachusetts 15% 2020 Massachusetts Division of Energy Resources

Maryland 20% 2022 Maryland Public Service Commission

Maine 40% 2017 Maine Public Utilities Commission

Michigan 10% 2015 Michigan Public Service Commission

Minnesota 25% 2025 Minnesota Department of Commerce

Missouri 15% 2021 Missouri Public Service Commission

Montana 15% 2015 Montana Public Service Commission

New Hampshire

23.8% 2025 New Hampshire Office of Energy and Planning

New Jersey 22.5% 2021 New Jersey Board of Public Utilities

New Mexico 20% 2020 New Mexico Public Regulation Commission

Nevada 20% 2015 Public Utilities Commission of Nevada

New York 24% 2013 New York Public Service Commission

North Carolina 12.5% 2021 North Carolina Utilities Commission

North Dakota* 10% 2015 North Dakota Public Service Commission

Oregon 25% 2025 Oregon Energy Office

Pennsylvania 8% 2020 Pennsylvania Public Utility Commission

Rhode Island 16% 2019 Rhode Island Public Utilities Commission

South Dakota*

10% 2015 South Dakota Public Utility Commission

Texas 5,880 MW

2015 Public Utility Commission of Texas

Utah* 20% 2025 Utah Department of Environmental Quality

Vermont* 10% 2013 Vermont Department of Public Service

Virginia* 12% 2022 Virginia Department of Mines, Minerals, and Energy

Washington 15% 2020 Washington Secretary of State

Wisconsin 10% 2015 Public Service Commission of Wisconsin

Source: US Department of Energy http://apps1.eere.energy.gov/states/maps/renewable_portfolio_states.cfm


Solar Specific RPS Initiatives A number of states have mechanisms to support solar, most typical through set-asides, in which some share of the RPS must be met with solar and also customer-sited distribution generation (DG), which is typically solar. The popularity of set-asides for solar and DG has increased in recent years and many states have created new programs or increased previous targets. Most programs are not restricted to PV, but PV only programs exist as well. Although many states set solar specific RPS targets, California is an example of a state without, but where the development of solar projects is very strong. Figure 13. Support for Solar Energy in State RPS Policies

RPS Policies with Solar/DG Provisions

State renewable portfolio standard with solar / distributed generation (DG) provision

State renewable portfolio goal with solar / distributed generation provision

www.dsireusa.org / July 2009

Solar water heating counts toward solar provision

WA: double credit for DG

NV: 1.5% solar by 2025;2.4 to 2.45 multiplier for PV

UT: 2.4 multiplierfor solar

AZ: 4.5% DG by 2025

NM: 4% solar-electric by 20200.6% DG by 2020

TX: double credit for non-wind(Non-wind goal: 500 MW)

CO: 0.8% solar-electric by 2020

MO: 0.3% solar-electricby 2021

MI: triple credit for solar

OH: 0.5% solarby 2025

NC: 0.2% solarby 2018

MD: 2% solar-electric in 2022

DC: 0.4% solar by 2020;1.1 multiplier for solar

NY: 0.1542% customer-sitedby 2013

DE: 2.005% solar PV by 2019;triple credit for PV

NH: 0.3% solar-electric by 2014

NJ: 2.12% solar-electric by 2021

PA: 0.5% solar PV by 2020

MA: TBD

14 states & DChave an RPS with

solar/DG provisions

Source: www.dsireusa.org/documents/SummaryMaps/Solar_DG_RPS_map.ppt#256,1,Slide Financial incentives There are financial incentives on many levels: Federal, State and Local City/Council.


Federal incentives Key federal incentives are: Investment Tax Credit for Solar (ITC) This is a 30 percent tax credit for solar installations. Through the Emergency Economic Stabilization Act of 2008 (EESA) this credit was extended for eight years, the cap for residential PV installations removed, it allowed credit against alternative minimum tax and allowed utilities to use it. American Recovery and Reinvestment Act of 2009 (ARRA) As an alternative to ITC large solar customer can receive cash grants to cover up to 30% of the cost of installing solar equipment. Companies can choose to use this grant whether or not they have sufficient tax liability to take full advantage of ITC. $3 billion will be made available through the program that covers a variety of renewable energy types.

A more extensive list of Federal incentives can be found: http://www.dsireusa.org/incentives/index.cfm?state=us&re=1&EE=1 State/County/City incentives A variety of incentives exists and varies from state to state, and cities and counties

• Direct Incentives • Tax Credits/Deductions/Exemptions • Low-Interest Loans • Sales Tax Exemptions • Property Tax Incentives • Industry Recruitment Incentives • Sale of Renewable Energy Credits

Visit http://www.dsireusa.org/ for details. Guide to understand states solar policies: http://www.nrel.gov/docs/fy09osti/44853.pdf Net metering and grid availability A PV system installed on a home is located “behind-the-meter,” meaning the on-site generation is fed directly into the house for its use. The electricity produced by the PV system reduces the amount that needs to be purchased from the local utility Net Metering is also available for homeowners and businesses with solar electric or wind generating energy systems. Through interconnection with the power grid and your time-of-use meter, the net difference between the energy generated by your renewable energy system and the energy you receive is measured. If you produce more energy than you use, you can bank the credits and use them at a later time when your system is not fully meeting your electricity needs. Most Net Metering systems do not allow you to get credits for more electricity you produce. You can get a reduced electricity bill, but you will not get money back if you produce more than you need. The way Net Metering is structured today has an impact on how large systems are typically installed and do not sufficiently utilize potential.


For an in-depth study of various Net Metering policies we recommend reading: Freeing the Grid: 2008 Edition: Best and Worst Practices in State Net Metering Policies and Interconnection Standards http://www.newenergychoices.org/uploads/FreeingTheGrid2008_report.pdf Solar access laws “Solar energy systems, whether thermal or photovoltaic, require direct access to sunlight to operate efficiently. The installation of a solar energy system on a new or existing building requires exterior modifications that are subject to building codes and private regulation. As our energy policies shift to advancing solar energy as a significant source of our energy portfolio, the conventional view of building codes and restrictive covenants must yield to guaranteeing access to sunlight to the fullest extent possible.”

• 18 states limit or prohibit restrictions that neighbourhood covenants and/or local ordinances may impose on the use of solar-energy systems

• 33 states allow for the rights to existing solar access on the part of one property owner to be secured from another property owner whose property could be developed in such a way as to restrict the solar resource

• 14 states have provisions for both Sources: Interstate Renewable Energy Council, A Comprehensive Review of Solar Access Law in the United States, Suggested Standards for a Model Statue and Ordinance. Prepared by Colleen McCann Kettles, Florida Solar Energy Research and Education Foundation - http://www.solarabcs.org/solaraccess/Solaraccess-full.pdf Feed-in tariffs Feed-in tariffs policy is not widely adopted in the U.S. There are states that are proposing polices to follow the European model. For a greater understanding of the current landscape for feed-in tariffs in the U.S., we recommend the following publication by: Wilson Rickerson, Florian Bennhold and James Bradbury: “Feed-in Tariffs and Renewable Energy in the USA - a Policy Update” (May 2008) http://www.boell.org/docs/Feed-in%20Tariffs%20and%20Renewable%20Energy%20in%20the%20USA%20-%20a%20Policy%20Update.pdf Feed-in Tariffs in California “California has played a leading role in developing feed-in tariffs in the U.S. California Assembly Bill (AB) 1969 of 2006 established a feed-in tariff for systems with a capacity of 1.5 MW and below, capped at 250 MW total statewide. Generators can choose 10-, 15-, or 20-year contracts, and can opt to sell either 100% of their power or offset their retail load and sell only their excess electricity. Unlike in the German law, California’s tariff rates are based on time-of-delivery, rather than the generation cost of individual technologies. This means that all technologies are offered the same price, but that this price varies depending on whether the electricity is generated during peak or off-peak times. In Southern California Edison territory, peak payments can be up to $0.31/kWh in the summer (Rickerson et al., 2008). The original program was limited to facilities sited


at wastewater and water treatment facilities, but the California Public Utilities Commission (CPUC) extended the program to all customer-types, and expanded the cap to 478.4 MW in 2007. Subsequent bills have sought to expand both the overall program cap and the individual project cap, and a recent bill (AB 1807 of 2008) is seeking to increase the system capacity limit to 20 MW, and shift to a more European-style structure based on technology-specific payments.” Source: Wilson Rickerson, Florian Bennhold and James Bradbur: “Feed-in Tariffs and Renewable Energy in the USA - a Policy Update More information can be found at the California Public Utilities Commission’s website: http://www.cpuc.ca.gov/PUC/energy/Renewables/hot/feedintariffs.htm Case study 1: San Francisco PV program The City and County of San Francisco offers incentives to residents, businesses and non-profits to install solar on their properties. The incentives program is in addition to federal tax credits ITC and the California Solar Initiatives, a rebate program sponsored by the State of California. These incentives combined could pay up to half the cost of an installed solar power system. There are various incentive levels starting at $2000, but can be higher through programs for people with low income and by using local installers with employees coming from the City’s Workforce Development Program. The typical incentive for the homeowner is $5000. Business incentives are $1,500 per kW installed up to $10,000. For a typical installed system of 3000 Watt, which produces 4,931 kWh/year, the economics will be: System Cost 3000 Watt system $30,000

Incentives

CSI PG&E EPBB (Residential) (Step 5), 100% DF

$4,650

San Francisco PV Incentive $5,000

Federal Tax Credit (Res.) (Jan. 2009) $6,105

less Total Incentives $14,245

Increased Federal Taxes Assume 35% tax

San Francisco PV Incentive - Basic (Res.) (Feb. 2009)

$1,750

plus Total Federal Tax Increase $1,750

NET COST

$15,995

Average monthly bills, using standard electricity demand profile


Source: Go Solar California, http://cec.cleanpowerestimator.com/default.aspx It is worth noting that despite large incentives offered through federal tax credits, state rebates and local San Francisco city, the payback time for a system is still ~20 years (depending on your financing). But the program has been very popular and last year 820 residents installed new system in San Francisco up from 200 the year before. One disadvantage in the program is that it shifts a large portion of the financing burden from the Federal level to the City. A $5000 incentive reduces the federal tax credit with $1500 and in addition increases total federal tax ~1750, since the incentive is taxable. The overall value of the incentive is therefore less than $2000. Source: Ms. Barbara Hale, Assistant General Manger for Power, San Francisco Public Utilities Commission, City and County of San Francisco, Power Enterprise, www.sfwater.org Case study 2: Berkeley PV program BerkeleyFIRST (Financing Initiative for Renewable and Solar Technology) is a solar financing program operating in the City of Berkeley. It provides property owners an opportunity to borrow money from the City’s Sustainable Energy Financing District to install solar photovoltaic electric systems and allow the cost to be repaid over 20 years through an annual special tax on their property tax bill. The tax will only be paid by Berkeley property owners who voluntarily participate in the BerkeleyFIRST program. The BerkeleyFIRST program has attracted international and national attention because it dramatically reduces the upfront costs of installing solar photovoltaic systems for residential and commercial property owners without using City funds. All upfront capital costs and most administrative costs for the program are funded with private financing.


Benefits from the program:

• There is relatively little up-front cost to the property owner. • The cost for the solar system is paid for through a special tax on the property,

and is spread over 20 years. • The financing costs are comparable to a traditional equity line or mortgage. • Since the solar system stays with the property, so does the tax obligation—if the

property is transferred or sold, the new owners will pay the remaining tax obligation.

The interest rate will be fixed for 20 years once funding is requested and is included in property tax payment. The interest rate for the bond repayment is set at 3.25% over the 10-year U.S. Treasury Note or 6.75% whichever is greater. Initial and on-going City and County administrative fees are built into the rate and add approximately 1% to the rate. Source: City of Berkeley - http://www.ci.berkeley.ca.us/ContentDisplay.aspx?id=26580

10.5. PV value chain The PV industry in the US has during the last years experience rapid growth and US companies is involved in every aspect of the Value Chain. The Energy Information Administration published a report of the PV manufacturing market and this report is recommended reading in order to understand the industry better. Solar Photovoltaic Cell/Module Manufacturing Activities 2007 http://www.eia.doe.gov/cneaf/solar.renewables/page/solarreport/solarpv.html A reference to some of the main companies in the industry here follows. BP Solar (HQ Frederick, Maryland) http://www.bp.com/sectiongenericarticle.do?categoryId=8051&contentId=7036665 BP Solar’s contributions to PV technology include:

• first to move solar electric technology from spacecraft to commercial needs on earth

• first to commercialize multicrystalline cells and develop a low cost silicon ingot casting process

• first and only company to incorporate buried contact cells in commercial modules • first to produce semi-transparent modules for roofing applications (BP service

station canopies) • first use of wire saws in the PV industry • first use of hot-melt metallization inks in the PV industry • invention of continuous emitter deposition equipment

In recent years, BP Solar’s technology initiatives have focused on the development of new silicon feedstock and alternative wafer fabrication techniques. These advances, coupled with BP Solar’s significant improvements in device efficiency, provide a sound footing in the march towards grid parity (where solar electricity costs the same as conventional retail electricity) in the face of rising material costs. Moreover, the current scale of the solar industry and sustained government support will allow the economic introduction of these advances in coming years.


First Solar (HQ Tempe, Arizona) - http://firstsolar.com/ First Solar, Inc. is a publicly-held U.S. energy company in the solar sector. It manufactures photovoltaic solar modules using a thin film semiconductor process based on CdTe, to produce photovoltaic modules. It is the largest manufacturer of thin-film cells in the world, with production capacity expected to reach over 500 MW per year by the end of 2008. The process uses different materials than most other solar cells, is more economical, tolerant of a wide range of conditions, but less efficient at converting light to electricity First Solar was founded as Solar Cells Incorporated by Harold McMaster and in 1999 was purchased by True North Partners LLC, which rebranded the company as First Solar. Citizenrē (HQ Wilmington, Delaware) - http://www.citizenre.com/web/index.php Citizenrē is a renewable energy startup company that plans to rent photovoltaic (PV) solar systems to homeowners in the United States. The company's business plan is based on the premise that they can reduce the cost of generating electricity by cheaply manufacturing and installing company owned residential roof top solar electric panels. The electricity produced will be purchased by householders under contract to Citizenrē. Excess power produced during daylight hours will be "banked" with local electric utilities by net metering to be drawn on at night. Entech Solar (HQ Fort Worth, Texas) - http://www.entechsolar.com/index.php Entech Solar, formerly WorldWater & Solar Technologies Corp., is a company in solar electric engineering, water management solutions, and solar energy installations. The company has solar technology projects in over 20 countries around the world. In the US, it provides solar electric, water pumping and purification technology to water utilities, agribusiness, industry, schools, communities, homeowners and emergency responders. The company is responsible for some major breakthroughs in solar power technology and holds many solar-related patents. GE Energy - http://www.gepower.com/prod_serv/products/solar/en/index.htm GE delivers complete solutions for commercial-scale solar electrification, from engineering design through installation and service. Systems from tens to hundreds of kilowatts can be installed on your building rooftop. Roof Integration, a technology pioneered by GE, seamlessly blends solar modules into a variety of residential roofing materials. GE's 66W PV module was specifically designed for this technique, and is the highest powered module for this installation type on the market today. Global Solar (HQ Tucson, Arizona) - http://www.globalsolar.com/index.php Global Solar is a maker of copper indium gallium selenide (CIGS) thin-film solar cells. Global Solar Energy opened in 1996, and in 2008 finished another phase of development as it expanded its CIGS factory in Tucson, Arizona to a capacity of 75 MW. [4] [5] The company expects to produce 20 megawatts of the films at the plant in 2008 before ramping up to 40 megawatts of capacity in 2009 and 140 megawatts by 2010. [6]. This makes Global Solar the largest full-scale manufacturer of CIGS thin-film photovoltaic. HelioVolt (HQ Austin, Texas) - http://www.heliovolt.net/ HelioVolt Corporation is a solar energy company specializing in Copper Indium Gallium Selenide (CIGS) non-vacuum nanomaterial-based solar panel technology. The company has attracted over $100 million in investment. It is based in Austin, Texas. International Solar Electric Technology (HQ Chatsworth, California) - http://www.isetinc.com


ISET is a company heavily invested in copper indium gallium selenide (CIGS) photovoltaic. ISET's research over two decades has been largely funded by grants from the National Renewable Energy Laboratory. Members helped found or worked in many of the more well known CIGS companies, such as Nanosolar, Solopower, Showa, and Honda Soltec. Despite a lack of venture capital, ISET plans to launch a thin film, produced in a new Chatsworth plant with hundreds of megawatts per year capacity after the pilot plant is proven. The company believes they will be able to at first achieve 10% efficient modules sold for $0.65 cents per watt, then 15% efficient for $0.50 per watt, and potentially ultimately as low as $0.40 per watt (a tenth of current prices). Konarka Technologies (HQ Lowell, Massachusetts) – www.konarka.com Konarka Technologies, Inc. is a solar energy company founded in 2001 as a spin-off from University of Massachusetts. The company is developing two types of organic solar cells: polymer-fullerene solar cells and dye-sensitized solar cells (DSSCs). Konarka cells are lightweight, flexible photovoltaics that can be printed as film or coated onto surfaces. The company hopes its manufacturing process, which utilizes organic chemistry, will result in higher energy conversion efficiency at lower cost than traditional silicon fabricated solar cells. Konarka is also researching infrared light activated photovoltaic which would enable night-time power generation. Miasolé (HQ Santa Clara, California) – www.miasole.com Miasolé is a solar energy company developing CIGS solar cells. They focus on manufacturing thin-film solar cells. Miasolé’s production system utilizes stainless steel foil substrates and a roll-to-roll process that allows for the production of an “all sputtered” CIGS solar cell in which each layer of the cell is deposited in a single pass through a single vacuum system, greatly increasing throughput and reducing costs. Stainless steel enters the vacuum system and fully coated solar cell material exits. The entire operation takes less than an hour and does not require additional lighting, leading to cost-effective manufacturing. Plans are afoot for a new manufacturing facility in Santa Clara, which will eventually have the capacity to produce 200/megqwatt systems. The semiconductor layers of a CIGS solar cell are less than 1/100th the thickness of silicon in a conventional crystalline silicon solar cell. Because Miasolé’s production process is also less capital intensive and requires a single deposition of the silicon compound, the process is less labour-intensive and has lower overhead costs. The company’s goal is to reduce the cost of installations by 75% or crystalline silicon. That would make solar installations potentially competitive with conventional sources of electricity. Miasolé has raised over $100 million in investment and government grants. Nanosolar (HQ San Jose, California) - www.nanosolar.com Nanosolar is a developer of solar power technology. Nanosolar has developed and commercialized a low-cost printable solar cell manufacturing process. The company started selling panels mid-December 2007, and plans to sell them at around $1 per watt (one fifth the price of the silicon cells). Nanosys, Inc. (HQ Palo Alto, California) - http://www.nanosysinc.com/index.html Nanosys is using innovative techniques to produce solar cells. By combining thin-film electronics technology and high performance inorganic nanostructures, Nanosys can produce a new type of solar cell that performs like a traditional solar cell but can be configured like a lightweight flexible plastic. This hybrid technology, which was pioneered at Berkeley Lab, has the potential to provide low cost solar power through currently available, high volume and inexpensive manufacturing techniques based on conventional thin-film processes.


Pyron Solar (HQ San Diego, California) – http://pyronsolar.com/ Pyron Solar has developed an innovative concentrating photovoltaic (CPV) solar power generator for utility scale customers. The company has recently closed a Series A round of equity financing with New Energies Invest. Pyron Solar is one of the earliest entrants into the CPV market, and has collaborated with Boeing's Spectrolab for more than a decade to enhance the multi-junction (MJ), or high efficiency solar cells. Pyron integrates the Spectrolab MJ cell into its electronics package at its factory in San Diego, California. Signet Solar (HQ Menlo Park, California) - www.signetsolar.com/index.htm Signet Solar was established in 2006. They produce photovoltaic modules, and have manufacturing plants in India and Germany. The modules are made using thin film silicon technology on large area (5.7 m2 (61 sq ft)) glass substrates, referred to as Gen 8.5. SolFocus, Inc. (HQ Mountain View, California) - http://www.solfocus.com SolFocus specializes in low-cost solar panel products. The first-generation design for a low-cost photovoltaic module at SolFocus was honoured with the grand prize at the recent National Renewable Energy Laboratory’s 18th Industry Growth Forum. A second-generation version of this device uses a very thin, solid optic to provide the primary and secondary reflective surfaces. Micro-concentrators are molded into a single glass sheet, and the highest efficiency cells from Spectrolab are placed on the back of the glass using high speed pick-and-place equipment. Because of their thin construction and low weight, these devices will be suitable for commercial rooftop installation and may become commercially competitive with flat panel PV cells, provided a reliable method is developed to maintain a clean environment and a constant orientation towards the sun. Spectrolab (HQ Sylmar, California) – http://spectrolab.com/ Spectrolab is a subsidiary of The Boeing Company that manufacturers space solar cells and panels. It is also a subsidiary of the Boeing Satellite Development Center, which is a unit of Boeing Integrated Defence Systems. It was founded in 1956 by Alfred E. Mann, who has gone on to become a billionaire American entrepreneur and philanthropist. Spectrolab was acquired by Hughes Aircraft Company in 1975 and became a subsidiary of Hughes until its sale to Boeing in 2000. The company claims its "NeXt Triple Junction" high efficiency solar cells have a minimum average efficiency of 29.9%. In 2006 testing at the National Renewable Energy Laboratory demonstrated an efficiency of 40.7% using triple-junction solar cells developed by Spectrolab. Sungevity (HQ Berkeley, California) – http://www.sungevity.com/ Sungevity specializes in remote solar design and installation of home solar electric systems. Sungevity and its Network of Preferred Installers currently operate in San Francisco, San Diego, and Los Angeles. In June 2009, Sungevity was presented a Green Award by the San Francisco Business Times for its leadership in solar installation. Sungevity is proving that going solar is easy, a good investment, and a viable way to reduce carbon emissions. SunPower (HQ San Jose, California) – http://us.sunpowercorp.com/ SunPower Corporation designs and manufactures high-efficiency silicon solar cells, roof tiles and solar panels based on a silicon all-back-contact solar cell invented at Stanford University. SunPower is publicly traded on the NASDAQ as SPWRA and SPWRB.


10.6. Sector organizations Sources: http://www.builditsolar.com/References/Associations/Associations.htm http://www.ecobusinesslinks.com/solar_energy_associations.htm National

American Council on Renewable Energy (ACORE) – http://www.acore.org/front ACORE, a 501(c)(3) non-profit organization based in Washington D.C. and San Francisco, was founded in 2001 to bring together leading proponents and innovators in all facets of the renewable energy sector for the purpose of moving renewable energy into the mainstream of America’s economy. American Solar Energy Society (ASES) - http://www.ases.org/ Established in 1954, the American Solar Energy Society (ASES) is the nation's leading nonprofit association of solar professionals & grassroots advocates. Their mission is to speed the transition to a sustainable energy economy. They advance education, research and policy, inspiring the nation to go solar. A national organization dedicated to advancing the use of solar energy for the benefit of U.S. citizens and the global environment. ASES sponsors the National Solar Energy Conference, publishes SOLAR TODAY magazine and Advances in Solar Energy, publishes white papers, sponsors issue Roundtables in Washington, DC, distributes solar publications, organizes a Solar Action Network and has regional chapters throughout the country. ASES is the United States Section of the International Solar Energy Society. Environmental Energy and Study Institute (EESI) – http://www.eesi.org/about EESI incorporated and received its IRS 501(c)(3) status in 1984, based in Washington DC which promotes environmentally sustainable societies. Founded by a bipartisan and bicameral group of Congressional Members, EESI seeks to be a catalyst that moves society away from environmentally damaging fossil fuels and toward a clean energy future. EESI advances policy solutions that will result in decreased global warming and air pollution; improvements in public health, energy security and rural economic development opportunities; increased use of renewable energy sources and improved energy efficiency; and the protection of areas such as the Arctic and coastal regions. Interstate Renewable Energy Council (IREC) – http://www.irecusa.org/index.php?id=9 Formed in 1982 as a non-profit organization, supports market-oriented services targeted at education, coordination, procurement, the adoption and implementation of uniform guidelines and standards, workforce development, and consumer protection. IREC's mission is to accelerate the sustainable utilization of renewable energy sources and technologies in and through state and local government and community activities. National Renewable Energy Laboratory (NREL) – www.nrel.gov


Located in Golden, Colorado, as part of the U.S. Department of Energy, is the United States' primary laboratory for renewable energy and energy efficiency research and development. Solar Electric Power Association (SEPA) – http://www.solarelectricpower.org/ SEPA is comprised of over 560 utilities and solar industry members. From national events to one-on-one counseling, SEPA is the go-to resource for unbiased and actionable solar intelligence. Breaking down information overload into business reality, SEPA takes the time and risk out of implementing solar business plans and helps turn new technologies into new opportunities. The Solar Energy Industries Association (SEIA) – http://www.seia.org/ The Solar Energy Industries Association (SEIA) is the leading national trade association for the solar energy industry. They work to expand markets, strengthen research and development, remove market barriers and improve education and outreach for solar energy professionals. Located in Washington, D.C., SEIA was founded in 1974.

Solar Alliance – http://www.solaralliance.org/home/index.html A state-focused alliance of manufacturers, integrators and financiers dedicated to accelerating the promise of solar energy in the United States. We specifically target our efforts to help legislators, regulators and utilities make the transition to solar power by providing the technical and policy expertise that is in the best interest of residential, commercial and government customers and Americans as a whole.

California

NorCal Solar – http://www.norcalsolar.org/ Northern California Solar Energy Association is a non-profit educational organization whose mission is to accelerate the use of solar energy technology through the exchange of information. Since 1975 this membership-based group has educated tens of thousands of Californians about solar energy solutions through our events, publications, information center, website, and advocacy programs. California Solar Energy Industries Association – http://calseia.org/ supports the widespread adoption of solar thermal and photovoltaic systems by educating consumers, supporting solar legislation and conducting business in a professional and ethical manner.

Colorado

Colorado Solar Energy Industries Association – http://www.coseia.org/newsite/index.php?id=1 The Colorado Solar Energy Industries Association represents the solar industry in Colorado.


Illinois

Illinois Solar Energy Association – http://www.illinoissolar.org/ The Illinois Solar Energy Association (ISEA) was founded in 1975 and chartered by the State of Illinois in 1979. Our goal is to provide energy education and promote the application of solar and renewable energy technologies. Solar Home Tours.

New England

SEBANE – http://www.sebane.org/ is a business association of solar energy companies based, or doing business, in New England. Our membership includes companies from all sectors of the PV industry, including photovoltaic ("PV") cell and module manufacturers, component part manufacturers, project developers, system designers, and installers.

New York

New York Solar Energy Industry Association – http://www.nyseia.org/ Promoting solar energy use in NY state.

New Mexico

New Mexico Solar Energy Association - NMSEA – http://www.nmsea.org/ was one of the first organizations in the country to seek methods and ideas on how to use renewable energy, how small villages could live sustainably, and how to empower people through education about these issues.

Oregon

Solar Energy Association of Oregon - SEAO – http://www.solaroregon.org/ has been a leader in the creation and passage of landmark utility restructuring, global warming, conservation planning, energy-efficiency and solar access legislation, policies and programs. These have kept Oregon in the forefront of renewable energy activity nationwide, and have helped make Oregon fifth in the nation in terms of solar systems purchased. Oregon Solar Energy Industries Association – http://www.oregonseia.org/ Dedicated to promote the benefits of renewable energies and developing a strong local industry.


Texas

El Paso Solar Energy Association – http://www.epsea.org/ In addition to monthly meetings/seminars, EPSEA conducts technology demonstrations, information booths, and conducts project development work related to renewable energy technologies in the Southwest U.S. and Northern Mexico. EPSEA is a Chapter Member of the Texas State Solar Energy Society, of the American Solar Energy Society. Texas Solar Energy Society – http://www.txses.org/solar/ The Texas Solar Energy Society is dedicated to educating the public about the use of solar and other renewable energy technologies. Our membership includes educators, engineers, researchers, students, bankers, electrical contractors, architects, builders, building inspectors, home owners and solar enthusiasts. Publishes a quarterly newsletter and engages in educational projects and conferences.

10.7. Market dynamics and future developments The common perspective on the solar market is that it has a bright future. With advances in technology, cost reductions and with the United States’ enormous solar potential territory, the market is set to grow. There is a strong incentive to introduce more renewable energy in the U.S. and there are a number of initiatives favouring solar. The current financial crisis is strongly impacting the market. It has become very hard for large scale renewable projects to find financing and many have been placed on hold. For residential projects the market is also tougher. Given that a typical residential solar panel installation has ~20 year pay back time, and as people have seen their property values reduced, this marketplace is softer. Nevertheless even in this economic climate PV Solar capacity grew by 342 MW in 2008. Through the Emergency Economic Stabilization Act of 2008 (EESA), the Investment Tax Credit for Solar last year, the 30% tax credit will remain for the next 8 years. The ITC is significant in budgeting new installations, but unless there is sufficient tax liability to offset, it has little value. The ARRA (American Recovery and Reinvestment Act of 2009) should become valuable with cash grants in lieu of ITC. The U.S. has a multiplicity of regulations varying between States, but also on a city/county level and it is necessary to study the rules of the particular area one wants to operate. States and local government are separately developing regulations and incentives and given the autonomy of the local governments in the U.S., this will continue. A benefit of this fragmented structure is that within all these initiatives hopefully the best one will prevail and be more common. A large number of ideas are continuously being tried and tested. There are regulatory hurdles to more PV Solar going forward and there are certainly areas that can be simplified to better facilitate deployment. But, there is a trend going forward with more renewable energy being deployed with the strong incentives and


penalties being moved forward with ever more stringent RPSs. This eventually leads to a better regulatory landscape. The House of Representatives passed on June 26, 2009 – by a vote of 219-212 – a major climate change bill, the American Clean Energy and Security Act (ACES). The bill is now off to the Senate, but it is by no means certain to pass. The bill would establish a variant of a cap-and-trade plan for greenhouse gases to address climate change. It will also set a Federal RPS target of 20% by 2020. What about Concentrated Solar Power (CSP)? There is less CSP installed capacity in the U.S. 418 MW vs. 1,100 MW PV. There have been a number of new test facilities operating, but no new capacity feeding the Grid in 2008. Nevertheless, there is strong interest in CSP, due to cost advantage, and there are 6,000 MV of CSP projects queued up through different phases of development.


10.8. Sources Overview http://en.wikipedia.org/wiki/Us_population & http://en.wikipedia.org/wiki/US_economy Energy Demand Energy Information Administration: http://www.eia.doe.gov/emeu/aer/pecss_diagram.html Energy Consumption Energy Information Administration: http://www.statemaster.com/red/graph/ene_tot_ele_con-energy-total-electricity-consumption&b_map=1 Solar Energy Industries Association (SEIA) - US Solar Industry Year in Review 2008 http://www.seia.org/galleries/pdf/2008_Year_in_Review-small.pdf http://www.seia.org/galleries/pdf/2008_Year_in_Review_Slides.pdf http://irecusa.org/fileadmin/user_upload/ASES_09/Sherwood-Market_Trends-ASES-May09.pdf Grid http://www.eere.energy.gov/de/us_power_grids.html Renewable http://www.dsireusa.org/ RPS US Department of Energy http://apps1.eere.energy.gov/states/maps/renewable_portfolio_states.cfm Federal incentives http://www.dsireusa.org/incentives/index.cfm?state=us&re=1&EE=1 State/County/City incentives http://www.dsireusa.org/ Solar Access Laws Interstate Renewable Energy Council, A Comprehensive Review of Solar Access Law in the United States, Suggested Standards for a Model Statue and Ordinance. Prepared by Colleen McCann Kettles, Florida Solar Energy Research and Education Foundation - http://www.solarabcs.org/solaraccess/Solaraccess-full.pdf Feed-in tariffs Wilson Rickerson, Florian Bennhold and James Bradbury: “Feed-in Tariffs and Renewable Energy in the USA - a Policy Update” (May 2008) http://www.boell.org/docs/Feed-in%20Tariffs%20and%20Renewable%20Energy%20in%20the%20USA%20-%20a%20Policy%20Update.pdf California Public Utilities Commission www.cpuc.ca.gov/PUC/energy/Renewables/hot/feedintariffs.htm Case study 1 Go Solar California - http://cec.cleanpowerestimator.com/default.aspx


Ms. Barbara Hale, Assistant General Manger for Power, San Francisco Public Utilities Commission, City and County of San Francisco, Power Enterprise, www.sfwater.org Case study 2 City of Berkeley, http://www.ci.berkeley.ca.us/ContentDisplay.aspx?id=26580 PV Manufacturing and Installation Activities Solar Photovoltaic Cell/Module Manufacturing Activities 2007 http://www.eia.doe.gov/cneaf/solar.renewables/page/solarreport/solarpv.html

References (and recommended reading) AB 32 - The Global Warming Solutions Act of 2006 http://www.arb.ca.gov/cc/docs/ab32text.pdf Emergency Economic Stabilization Act of 2008 (EESA) http://www.gpo.gov/fdsys/pkg/PLAW-110publ343/content-detail.html American Recovery and Reinvestment Act of 2009 (ARRA) http://www.gpo.gov/fdsys/pkg/PLAW-111publ5/content-detail.html Ryan Wiser, Galen Barbose: “Renewable Portfolio Standards in the United States” http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf Visualizing the Grid http://www.npr.org/news/graphics/2009/apr/electric-grid/ Renewable Energy: Policies, Incentives, Availability Database of State Incentives for Renewables and Efficiency by North Carolina Solar Center and the Interstate Renewable Energy Council (IREC) http://www.dsireusa.org/ Solar Energy Industries Associations (SEIA) US Solar Industry Year in Review 2008 - www.seia.org/galleries/pdf/2008_Year_in_Review-small.pdf Federal Incentives: http://www.dsireusa.org/incentives/index.cfm?state=us&re=1&EE=1 Solar Policies: http://www.nrel.gov/docs/fy09osti/44853.pdf Freeing the Grid: 2008 Edition: Best and Worst Practices in State Net Metering Policies and Interconnection Standards http://www.newenergychoices.org/uploads/FreeingTheGrid2008_report.pdf Wilson Rickerson, Florian Bennhold and James Bradbury: “Feed-in Tariffs and Renewable Energy in the USA - a Policy Update” http://www.boell.org/docs/Feed-in%20Tariffs%20and%20Renewable%20Energy%20in%20the%20USA%20-%20a%20Policy%20Update.pdf California Public Utilities Commission: http://www.cpuc.ca.gov/PUC/energy/Renewables/hot/feedintariffs.htm


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