The amount of energy that radiates over the Earth each day in the form of sunlight is equivalent to about 15,000 times the world's total energy consumption. If only a fraction of this solar energy could be converted into electricity a large proportion of the world's energy problems would be solved. Solar energy is intermittent - electricity production is dependent on sunlight, and is not possible to control.
Solar energy is fast growing
Solar energy is a fast-growing energy source and is currently used to produce both electricity and heat. It is available everywhere although not throughout the entire day. The potential for solar energy is substantial if the technology is developed for large-scale production, with lower manufacturing costs. Although the number of large-scale solar power plants is increasing greatly, production has so far been focused on large numbers of local small-scale systems. In 2011, solar energy accounted for 1.3 per cent of the total European electricity production. The worldwide market for photovoltaic cells (PV) – the dominating method for converting solar energy into electricity – is expected to reach 31 GW / 56 billion € in 2013.
Rapid increase in Germany
The increase in installed PV capacity has been particularly rapid in Germany. This is due to the beneficial conditions of the Energiewende (renewable energy act) and the huge decrease in cost of investment. At the end of 2012 the total capacity was 32GW in 1.3 million installations. On sunny days, PV provide up to 35 per cent of electricity supply in Germany. However, solar energy accounts for only 5.3 per cent of the total annual consumption.
Solar energy research and development currently focuses on improving efficiency, which is quite low in terms of the proportion of the total solar energy converted into electricity.
Cost of solar energy equipment decreasing
In recent years the cost of solar energy equipment has decreased significantly, while retail prices for grid electricity have increased. This means that photovoltaic solar cells (PV) has reached, or will in the near future reach, grid parity for customers in many European countries. Depending on the regulatory framework, it can be assumed that in the next few years small installations for private customers could be economically viable without subsidies in some countries. Large scale PV installations need to compete on the energy market with other electricity producers, and will continue to find this difficult without subsidies.