Despite the critical situation due to the collapse in the Spanish market and the restricted access to credit, photovoltaics managed to grow even in 2009. In fact, according to the last assessments made by the IMS research centre, the number of installations around the world should have increased by 5-10% compared to 2008, breaking the 6 GW record for the first time.

Moreover, these estimates may increase even more depending on the final data of the German market, which exceeded 3 GW last year, covering more than half the global photovoltaic capacity. According to Photon research centre, the photovoltaic capacity installed in Germany in 2009 could be between 3.5 and 4 GW and 2008 figures should be adjusted as well, taking them to 1.9 GW. According to these figures, Germany’s total installed photovoltaic capacity may be between 9 and 10 GW. Such a figure would have seemed unthinkable even two or three years ago. But just consider that in Bavaria, in 2009, solar power met 2.5% of electricity demand and it could even reach 4% in 2010!

It is not surprising that international observers are focusing their attention on Germany’s future choices. The main question is understanding how they will manage the evolution of a market that has grown beyond expectation. In January tariffs were cut by 10% as required by the current regulations, decreasing from 43 €cents to 39 €cents per kWh for medium-sized systems installed on buildings. Nevertheless, the combination between the big fall in module prices in 2009 and the growth in the market suggests another tariffs cut.
And here things get delicate, also considering that some elements in the new Italian centre-right coalition, particularly among the Liberals, have never really stomached the mechanisms within the feed-in law. The solar industry is ready for another 5% cut, while some unconfirmed reports speak of 16-17% additional reductions. The government’s major concern is the impact of incentives, which amounted to 2.4 billion Euros in 2008 for photovoltaics alone.

Incentives for renewables, wind, sun and biomass have added 3% to the bills of German families. So far, this financing of clean energy has been fully supported, not least because the number of installed systems has almost reached one million and many people have taken advantage of renewables. After all, as solar industries point out, the annual revenue from direct and indirect taxation on photovoltaics is in the region of 3 billion Euros. Yet, utilities are the most worried about the growth of renewables. In ten years the amount of green electricity has tripled, reaching 15%, a figure that could double by 2020.

In order to create a sustainable photovoltaic market of the order of 2-4 GW per year, it necessarily requires an intelligent reduction in incentives. If big reductions were made, like those being suggested, the repercussions would seriously affect the industry as well. “50,000 employees and investments of 10 billion Euros would be at risk”, warned a representative of BSW-Solar, the German solar industry association. In fact, not only would a drastic cut reduce the internal solar market, but would favour Chinese manufacturers able to sell at lower prices.
The issue is therefore tricky and it’s likely that, in the course of 2010, the total incentive reduction will reach about 20%.

In conclusion, what are we expecting from 2010? At the international level, photovoltaics are expected to see strong growth and, according to the IMS, increase by 40-50%, while costs should decrease slowly (see graph).
As for Italy, which reported an estimated increase of 550-600 MW in 2009, ranking second or third in the world, 2010 could be the year when the threshold of annual installations exceeds 1 GW.

Gianni Silvestrini (scientific director of QualEnergia)