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Solar at the heart of utility corporate strategy

  • Publication Date:May 2009
  • Publisher:Datamonitor
  • Product Type: Report
  • Pages:36

Solar at the heart of utility corporate strategy

The development of solar power is proceeding at a strong pace, yet necessary technological breakthroughs must now come from solar component manufacturers for the sector to undergo exponential growth. As the technology draws near grid parity, involvement from the major utilities as a source of significant demand will be of paramount importance.

  • Market segmentation data, annual and cumulative solar cell production data, regional and national production shares and top 10 global cell producers.
  • Solar installed capacity data for major US and European utilities and detailed market/technology/regulatory/company operational and financial drivers.
  • An overview the drivers and implications of the current solar industry trends towards manufacture consolidation and vertical integration.
  • Forecasts of annual / cumulative solar capacities and market growth potentials for utilities seeking to develop their solar strategy (13 key markets).

Manufacturing growth along the solar value chain has been dramatic by any standards: 2008 saw further large increases in solar production capacity, diversification of manufacturing locations and shifts in leadership. With new companies and fresh markets wrestling for prominence strong industry consolidation and vertical integration is now expected.

So far, solar manufacturers rather than established energy companies are exploiting opportunities presented by the fast-expanding market. Indeed, European utilities have largely shunned the solar market. However, European utilities will quickly become the largest and one of the most important customers for the solar industry.

India is emerging as an aspiring producer of solar technologies with the infrastructure to support utility-scale involvement. European utilities seeking to diversify into solar should also turn their attention to Italy's solar market, but also Germany's, which is expected to reclaim the number one spot as the most mature solar market worldwide.

  • Quickly determine and assimilate the most critical developments and issues across 13 key solar markets today and in years to come.
  • Understand how demand and supply sides of the industry have evolved and why the era of gigawatt factories and utility-scale projects is now upon us.
  • Determine the relative appeal and growth potential of key markets based on national policy developments, and tailor your strategy accordingly.
  • DATAMONITOR VIEW
  • CATALYST
  • SUMMARY
  • SOURCES
  • ANALYSIS
    • A new value proposition for investment in solar energy has emerged over the past decade as industrialists address a shifting set of strategy drivers in an increasingly buoyant environment
    • The demand side of the international PV market can be clearly divided into four market sectors
    • On the supply side, manufacturing growth along the solar value chain has been dramatic by any standards
    • 2008 saw further large increases in solar manufacturing capacity, diversification of manufacturing locations and shifts in leadership
    • With new companies and fresh markets wrestling for prominence, strong industry consolidation and vertical integration is expected
    • Component manufacturers, utilities, and regulators are making decisions now that will determine the scale, structure and performance of this nascent sector
    • Solar manufacturers rather than established energy companies are exploiting opportunities presented by the fast-expanding market
    • European utilities have largely shunned the solar market
    • European utilities will quickly become the largest and one of the most important customers for the solar Industry
    • During the march to grid parity, the decisions of regulators will affect not only utilities but the entire solar sector
    • The horizontally-integrated model is best for utilities seeking to rapidly and significantly scale existing solar while diversifying into new solar technologies and markets
    • For utilities, the horizontal integration of fixed-cost solar assets would be an unhedged yet comparatively safe business model
    • Solar will form part of utilities' horizontally integrated renewable operations, with upstream benefit but barriers downstream
    • India is emerging as an aspiring producer of solar technologies with the infrastructure to support utility-scale involvement
    • European utilities seeking to diversify into solar should turn their attention to Italy's well-segmented solar market
    • Due to the reduction in the Spanish cap, Germany is expected to reclaim the number one spot as the most mature solar market
    • Ask the analyst
    • Datamonitor consulting
    • Disclaimer
  • List of Figures
    • Figure 1: Rural applications of solar PV and large scale PV power production are driving the solar boom
    • Figure 2: FiTs provides investors with a planning horizon that allows new production capacity to be matched with expected demand
    • Figure 3: Regional and national shares of PV cell production and top 10 PV cell producers (2007)
    • Figure 4: The current solar industry trend - which became obvious in 2007 - is toward vertical integration
    • Figure 5: The extent and speed of this emerging sector's growth depends on many sets of players
    • Figure 6: Unlike most of their European counterparts, US utilities have embraced solar energy early on
    • Figure 7: Technology, market, regulatory, operational and financial drivers are encouraging utilities to take-up large scale solar generation strategies
    • Figure 8: Solar makes for a safer unhedged horizontally integrated asset than convention generation
    • Figure 9: As the scaling of utility ownership of renewable energy grows, consolidation of solar portfolios will become commonplace as utilities seek to leverage scale and efficiencies
    • Figure 9: India's adoption of new FiTs for solar power coupled to support for solar PV manufacturing has put it on the map
    • Figure 11: Besides high sun irradiation, Italy offers an attractive premium FiT
    • Figure 12: The highest potential for utility-scale involvement is (and will continue to be) found in Germany
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