Industry
$1 Trillion Market Opportunity
The $1 trillion renewable energy market is large and growing rapidly. Solar Photovoltaic (PV) energy is expected to capture significant share of the market due to large government incentives that are driving down project costs.
Based on lessons learned from the wind industry, Solargen Energy has identified utility-scale solar farms as a significant long term solution to U.S. energy needs.
The Solar Market
The current 'Global Warming' phenomenon has changed the world energy scenario to focus on the importance of renewable energy sources for augmenting power production worldwide. Renewable energy is produced mainly from solar, wind, hydro and bio-mass waste, etc. Solar energy is the perennial source of energy abundantly available. Solar cells, when exposed to the sun’s radiation, produce electricity directly. Wind energy is dependent on location, wind speed and seasonal changes. Similarly, hydropower depends on rain and water reserves. It is widely believed that solar will become a major source of energy in the next decade.
The Solar Photovoltaic (PV) industry experienced a growth rate of over 40% in the last 5 years representing a phenomenal rise of more than 6 fold growth in production and 10 fold in revenue from 2003 to 2007. According to independent market reports, the global PV market is expected to continue its healthy growth at least till 2030. Today, global demand is approximately 8 to 10 gigawatts (GW) per year, where a gigawatt is one billion watts of electricity.
Solar is at par or near grid parity in several markets including Germany, Japan, Italy, Spain, Portugal, Greece, and some states in the U.S. The State of California alone is spending heavily on grants and incentives to promote renewable energy with solar energy being the top recipient of incentives. Rising grid prices, environmental compliance costs, rising carbon prices, and growing concerns for global warming will continue to improve solar’s competitiveness.
The renewable energy market is expanding. Governments and utilities are diversifying their generation portfolios. The market is realizing the Levelized Cost of Electricity (LCOE) offered by solar energy and is rapidly driving industry growth. Opportunities for solar expansion are being driven by:
- Global acceptance of government mandated Renewable Portfolio Standards "RPS", requiring a percentage of energy supplied by utilities to be generated from renewable resources, are driving demand for rapidly deployable solar solutions.
- Many countries are investing in renewable energy to hedge against raising oil prices, create jobs, and reduce their dependence on foreign oil.
- Despite the impact of the global credit crisis, in Q3 2008 clean technology VC investments increased from $2.2 billion in the second quarter to $2.6 billion, of which the solar industry, primarily driven by thin-film technologies, saw approximately 40% of all cleantech investments. (Deutsche Bank Group, Investing in Climate Change 2009)
Solar energy, while still a fraction of global energy supplies, is rapidly expanding. In 2007, global installed Solar Photovoltaic capacity was nearly 4 gigawatts (GW), while capacity is projected to exceed 22.7 gigawatts by 2017 with a compound annual growth rate (CAGR) of 35%. The Solar industry growth is due to government incentives and transition from a boutique industry to main stream industry. Solargen has seen the transition from residential installations driving the market to large, utility-scale solar farms. This transition mirrors the wind industry evolution whose benefactors are either major manufacturers or large-scale developers.