One question that comes up is that, if this is such a large market, then why aren’t large conventional power plants being built? It turns out that the needy regions are often rural and cannot afford to buy a large power plant and distribution system. But they can afford to “pay as they go” buying a few more solar panels for their homes and villages each year. Another question is what about building smaller fossil fuel burning generators (which are still somewhat cheaper than PV to install)? In some regions, many of these are being built, but in other areas, fuel is very expensive and difficult to have delivered. What is happening now is that the PV industry is rushing headlong to meet an ever increasing demand. At present, PV costs S2.5/W to manufacture and sells for $3 to $6/W, depending on volume. This cheap enough that an African fanner can purchase a PV system and fluorescent lights for less than he would spend on a year’s worth of batteries and kerosene. At present, the demand for PV exceeds the supply, by a factor of 3 to 10. This is causing two interconnected phenomena. 1) The price of PV is being “held up” to some degree, because factories are selling everything they make. 2) Manufacturers are expanding their factories by factors of 2 and 3 to meet the demand In a couple of cases (Solarex and Iowa Thin Film) new factories will be producing 10 times more than the pilot plants did, by the end of this year. The expansions taking place are all happening in 1 to 2 years. Some of the manufacturers expect to reduce the cost of PV to less than Sl/W in 1 to 3 years. Thus, we are going to see the use of PV grow greatly, even in developed countries, before the year 2000. In the news of May 1996, it was reported that Amoco/Enron intends to build a 4 MW PV power plant in Hawaii in 1997 for the amazing installed cost of S1.75/W (PV Insider, May 1996). If they succeed at this, then the cost of PV will be low enough for extensive building-integrated, grid-inter-tied applications, next year. Other companies, seeing the dollars, are quickly jumping into the fray to make PV and PV products. Between 1992 and 1996, PV module manufacturing costs dropped by 56% (PV Insider, June 1996). Manufacturing (and sales) in the US have increased from 35 MW in 1988 to 83 MW in 1995 to around 90 MW so far this year. The PV industry world-wide is growing between 20% and 30% per year. This rivals the growth of computer manufacturing and sales. The effect of energy efficiency Around 1990, federal legislation was passed requiring manufacturers of appliances to meet certain standards of energy efficiency. This led to innovation in energy efficiency with little increase in cost. One of the greatest advances has been in refrigeration. New refrigerators use perhaps 1/4 the energy as old ones did. Since refrigerators can be a significant part of the home load, a new one will pay for itself in about 2 years, just in energy savings. Though not mandated, inventions in energy efficient lighting (compact fluorescent bulbs) has led to lighting that costs 1/4 the energy that traditional incandescent lighting does. Aside from the obvious advantage of lowering the load and hence the bill, energy efficiency means that you can now run a typical building with 4 times fewer solar electric panels, than you could in 1989, if the load is lights and appliances. This means the solar electric system needed is 4 times less expensive than it would have been without energy efficiency. New types of PV coming soon There are several new types of PV that will be on the market in the next 2 to 3 years.
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