Photovoltaics play a major role in the shift toward renewable energies

The German solar power sector has a key role to play in the move toward 100% renewable energies by 2020, provided it targets its efforts carefully. That is the result of the study entitled "Directions for the solar economy" ("Wegweiser Solarwirtschaft") by Roland Berger and Prognos, commissioned by the German Solar Industry Association (Bundesverband Solarwirtschaft, BSW-Solar).

The study defines three clear elements: First, photovoltaics (PV) has a significant part to play in transforming the power system. Second, the unique advantages of PV have to be leveraged. Third, German industry has to retain its competitive edge – and thereby strengthen Germany as a production location. If the identified targets are pursued persistently and systematically, solar power will offer competitive prices in just a few years. Challenges to the transmission and distribution networks from the higher share of renewable energies can be overcome through innovation.

"The next few years will be crucial for the future of the German PV industry and for achieving the energy transformation," says BSW President Günther Cramer. He emphasizes that "The solar sector in Germany is aware of its responsibility to society and the economy in general. Our sector fulfills this responsibility by focusing on an ambitious vision and clearly articulating the targets needed to realize that vision." Prof. Dr. Torsten Henzelmann, Partner in the Civil Economics Competence Center at Roland Berger Strategy Consultants, says: "In this joint study, we have clearly defined the potential of the PV sector. Now it's up to the sector to fully realize its benefits for the entire economy."

The vision of the German photovoltaics sector and the joint study are based on the claim that the sector can guarantee competitive, affordable, safe/secure and clean power generation from solar energy by 2020. The solar power industry will therefore become a pillar in the system transformation in Germany and around the world: switching over to clean and independent power generation based 100% on renewable energies. The expansion of photovoltaics makes an indispensable contribution to the struggle against climate change by cutting CO2 emissions. What's more, photovoltaics improve the security of the power supply and help protect resources better.

"Solar power combines certain advantages," says Henzelmann. "For example, it's decentralized (generation is close to consumers), easy to install and maintain and offers unlimited availability. Generating it has virtually no competition with other uses and can take place at times of day with high demand (covers demand peaks). These advantages lead – in case of regionally spread new installations - to affordable and sustainable power generation that can be integrated into the overall power system and make a significant contribution to the power supply."

The photovoltaics industry in Germany is currently the technology leader. It wants to maintain this position on a global scale while offering competitive costs. There is high global demand for photovoltaics products "Made in Germany".

To tap the potential of solar power, nine targets need to be achieved:

Cut system prices more than 50% by 2020. That would put the first non-subsidized installations in households by 2017.

Install 52 – 70 GW Photovoltaics modules by 2020 – thus realizing at least the expansion scenario of the German government's national renewable energy action plan.

Limit the extra costs for solar power to about 2 euro cents per kilowatt hour – or less than EUR 2 per month for each person in an average household. The extra costs will be driven by adding an expected 8 GW of solar installations in 2010, and 6 GW in 2011. Starting in 2012, roughly 3 to 5 GW will be added per year.

Invest at least 5% of the sector's sales in research and development to preserve its technological edge.

Secure at least 12% of the world market for German production – given strong growth in global PV demand and multiplication of German exports.

Build up capacity in Germany for PV production of approximately 8.5 GW.

Employ at least 130,000 people in Germany around PV technology.

Have economic benefits offset economic costs in the PV technology by 2020 through investing in further production and innovation along the whole value chain. By 2030, the industry will be generating a net economic contribution of at least EUR 25 billion.

Make photovoltaics a key component of the power system of the future. The increased fluctuation, decreased plannability, decentralized nature and therefore increased control complexity of solar power generation puts high demands on the grid. However, these challenges can be overcome technologically and at a low cost through innovation.

The full report is only available in German. It can be downloaded here.