The head of Canadian Solar, one of the four biggest solar PV manufacturers in the world, expects the global installation rate of solar PV to treble by the end of the decade to more 100GW a year.
In an interview with RenewEconomy, Shawn Qu, the CEO of Canadian Solar, said the declining costs of solar, and the rising cost of fossil fuels meant that the future of solar was guaranteed, although he had doubts about the future of large-scale centralised grid.
In 2012, the world installed more than 35GW of solar PV, which is expected to increase to around 40GW in 2013. Qu says that in two to three years, he expects to see a 50GW annual run rate, before rising to 100GW a year.
“I think the market will sustain at that level (100GW) for 10-15 years, until solar reaches 5 to 10% of total global capacity,” Qu told RenewEconomy in an interview last week at the All-Energy 2013 conference in Melbourne. “Then we will see. It will depend on whether storage or hybrid solution can be mature at that time.”
Qu said it was a pity that Australia had so far produced little in the way of large-scale solar plants, and he was concerned about talk that Australia may dilute its renewable energy target following another government review.
Australia has built just one 10MW solar farm in Western Australia. The Canadian province of Ontario, where Qu’s company is based, has or has permitted 100 projects of that size.
Canadian Solar’s own pipeline in Ontario is 500MW, and it is building 100MW a year of utility scale solar in the US, as well as a growing number of projects in China and Japan.
Qu said China will be the number 1 market in the world, and Japan is probably number 2. “Eastern Asia start to take lead in solar installations.”
Qu said that the lack of large-scale centralized solar systems in Australia – the sort of mega plants built in the US and once envisaged under Australia’s solar flagships program – may not matter in the long wrong, given the likely change in the nature of grids, which will move to a more centralised system.
He identified a series of key trends that will likely shape the market:
The first was the arrival of retail “grid parity”, and Australia was one of the first countries to get there. This meant that it was a cheaper option for households to put solar on their roofs than to source electricity only for the grid.. This also meant that for rooftop and commercial customers, Australia was one of the most attractive markets in the world
“The economics of self consumption really work, particularly for commercial buildings that have higher power consumption in the daytime that better match the profile than households,” he said.
Qu said that solar combined with storage will be the next revolution in the industry, enabling the output to become more reliable and to shift the output according to the load.
Meanwhile, solar costs will go down – not just in hardware, where silicon and wafer costs are likely to fall considerably – but in “soft costs” such as permitting, better financing, greater awareness and economies of scale.
New technologies would bring in smart and hybrid distributed energy systems, meaning that the nature of grids could change. “Large scale or centralized generation won the first round, but I think in round 2 the game will change.
“The grid will change fundamentally, we might have large projects of 10, 20, 30MW, but they will be closer to use,” he says. “The market will switch to the distributed level, and solar will be able to continue without subsidies.”
The other major trend is for solar companies like his to move to “total solutions”, rather than just the commodity markets of module manufacturing and project development. Canadian recently launched a leasing program in the US and Qu said customers were looking to companies to look after all their energy needs.