We can look back on unusually quiet last weeks at the end of the 2019, without the hustle and bustle in the photovoltaic market and the panic at the end of the day that has frequently been observed. As a result, there are no significant price cuts in sight for 2020. Here we look back over the second half of 2019, and what’s to come in 2020.
How did the solar industry fare in 2019, a year of climate strikes, falling module prices, feed in tariff cuts and patent lawsuits. Here, I’ll continue to shed light on the industry’s actual situation, based on key events throughout the second half of the year.
July 2019: Thanks to cuts in the incentives for new medium to large new installations introduced in April, small systems - preferably with hybrid inverters in combination with storage - increasingly caught the attention of those interested in photovoltaics. Many installers, in Germany at least, almost exclusively built small plants up to 30 kW this year. Although German inverter manufacturers such as SMA and KOSTAL face increasing pressure from major Chinese suppliers, they have managed to retain a large market share in the small-plant segment. Even so, established inverter manufacturers seemed to have been caught off guard by the uptick in demand, with the result that most devices in the 5 to 25 kW range sold out very quickly in the June/July timeframe. Suddenly there were delivery delays of several weeks or even months in the PV industry again.
It is not easy to understand why this bottleneck occurred, as the forecasts for 2019 had predicted precisely this. Storage systems for PV plants in this size category were also scarce at times, and still are in some cases. At mid-year, however, there were also fears that modules were headed for a bottleneck. News from China suggested we could see an unprecedented year-end rally. After a comparatively weak first half, subsequent auctions were held for systems with a total capacity of around 22.7 GW. At the same time, the forecast for 2019 in China was raised to around 40 GW. It has now become clear, however, that this boom failed to materialize, and the feared shortage of modules was unfounded.
August 2019: Numerous social and interest groups, such as the German Solar Industry Association (BSW), had been calling on the German government for months to remove the 52 GW cap in the Renewable Energy Act (EEG). Volker Quaschning of the Berlin University of Applied Sciences (HTW) sent Federal Economics Minister Peter Altmaier a discarded toilet lid with the inscription "Get rid of the PV lid." There were also voices within the GroKo (Germany's Grand Coalition) that the CDU/CSU parties, the senior partner in the coalition, would ultimately have to abandon its blockade of lifting the cap.
There was broad speculation about the consequences of retaining the cap: the fixed upper limit, which would abruptly cut off incentives under the legislation, would have an increasingly negative effect on decisions to invest in PV plants.
Meanwhile, although elimination of the 52 GW cap has been incorporated into the climate package, the question of a possible follow-on regulation has not been conclusively settled, and no concrete date has been set for doing so.
October 2019: Because no module bottleneck occurred, inverters and storage systems became available again - what else could stand in the way of installing photovoltaics on every available surface and thus the rapid implementation of the energy transition? The lack of qualified technicians!
Following the huge collapse in the solar industry since 2011, more and more solar electricians moved to other segments with the result that - in Germany, at least - there was a shortage of numerous workers and specialists in the PV sector. Many installation jobs could not be taken on or, if they could, only with long delays - lead times for electricians' work rose steadily to as much as five months in September. This installation bottleneck alone has given rise to fears that if climate targets in the electricity sector reached at all, it will only be with considerable delays. In the coming years, huge investments will have to be made in research, and in training new skilled workers. For this purpose, the German government has earmarked, unfortunately... nothing!
December 2019: Leaders had another chance to set a decisive course at the UN Climate Change conference in Madrid last month. To encourage delegates to take action, there was another major climate strike on November 29th, with hundreds of thousands of participants worldwide. Once again, however, only half-hearted declarations of intent were drawn up and the much-needed drastic changes in our resource-consuming economic system were neglected. So the groups working against climate change will probably have to continue striking. Because there is no alternative, even if many people may still hope for a miracle. The negative signs of global warming are already clearly visible.
Outlook
Renewable energy will play a major role in the sector; this is now the broad consensus. To this end, the obstacles that currently hinder their use outside the government-sponsored framework must be quickly removed. These include bureaucratic hurdles in the implementation of tenant electricity models and citizen energy systems, excessively high grid transmission fees and taxes.
On the technology side, we will see a further increase in module efficiency, although multicrystalline's days are probably numbered. Nearly all major manufacturers have converted to purely monocrystalline. Price levels will at best continue to decline slightly - that is, apart from inventory clearance or emergency sales. The end of the downward price spiral due to more efficient production technologies, and above all economies of scale, seems to have been reached at least for silicon products, as shown by the price graphs in the pvXchange price index, which have been moving sideways for months.
An interesting trend in the wind sector was presented at this year's New Energy World Forum in Berlin: floating wind turbines. The elimination of foundations anchored in the seabed allows the development of new offshore areas and the expansion of the wind turbines beyond the 10 MW capacity limit. Nevertheless, hope remains that the new distance regulation for onshore wind turbines announced in Germany will be reconsidered. These turbines help to avoid oversized and expensive power lines, which have similar public acceptance problems as large modern wind turbines. The involvement and financial participation of local residents is an effective means of improving acceptance. In this area we can look forward to more and more new ideas and innovative models in the future. The climate crisis cannot be tackled by individuals alone; it has to be a group effort!
Overview of the price points by technology in December 2019 including the changes over the previous month (as of December 10, 2019):
