In 2008, 2600 megawatts of photovoltaic electricity were installed in Spain. It was the world market leader that year with private investors, many of whom were foreign, investing 16000 million euros. In addition, approximately 1000 million euros were invested in high technology companies, something unprecedented in the Spanish economy.
In order to place this achievement in perspective it is important to mention that the photovoltaic energy installed that year compensated for the gap in supply produced by closure of the Garoña nuclear plant, the future of which had caused controversy that same year. What made the difference was the fact that it was all installed in the space of a year whereas it would have taken about ten years to install a new nuclear plant. Never before has an energy technology been installed so rapidly.
Today with approximately 4000 megawatts of photovoltaic energy installed, this power source now accounts for approximately 3% of Spanish electricity consumption.
A wave of harsh criticism accompanied this resounding success. Clearly it was based on a generous tariff, which was, incidentally, promulgated in the latter stages of the Aznar government (with restrictions raised later on) of over 40 eurocents per kilowatt hour (the normal tariff is around 18 euros for the consumer) which unquestionably became an important levy which will affect electricity prices for years to come, however, this perfectly justified observation was accompanied by a number of bizarre criticisms of impossible allegedly fraudulent practices which unfairly gave this business sector a bad name. Obviously, it goes without saying that, just as in any other important human activity, there will always be a few unscrupulous people prepared to breach established moral codes for their own profit.
We are nevertheless convinced that photovoltaic energy will become the most important electricity source before the half century is out and there will be further developments which today appear unthinkable. This conviction is supported by an article that we published in a scientific journal in 2001 (thus counteracting the criticisms of unknown colleagues) in which we predicted, based on a series of differential equations, the development of photovoltaic energy during the first half of the century. Our prognoses have been fulfilled for over a decade now.. The article set out three alternative scenarios, any one of which, should it be fulfilled, would ensure that photovoltaic energy became the predominant source of supply for global electricity demand. One such prognosis was that a cheaper means of marketing would be found. This actually occurred in Spain in 2008. The large photovoltaic plant, which until that time had not been considered a realistic way of operating this technology, gained credence with Spanish businessmen and led to the above mentioned results. Centralised marketing of this technology is indubitably much cheaper than selling through small almost domestic facilities which require a whole host of sellers and specialised electricians.
Today, the photovoltaic sector is in crisis. The world market in 2012 has only grown by 10% compared to 2011, instead of the annual 60% to which we have become accustomed! Nevertheless, it is a fact that photovoltaic companies worldwide are going under. Why should this be so? Because production of photovoltaic modules in the Far East, particularly in China has considerably exceeded demand, which has been explosive, and a strategy has been followed of lowering prices, something unsustainable for such companies, who are now in serious difficulties and this has led to an untenable situation for western manufacturers who are unable to produce such unrealistically low prices. Prices are so low that it is now possible to produce photovoltaic electricity at approximately 10 eurocents per kilowatt hour, or less, which is a competitive price compared to other sources of electricity in the daytime hours slot!
And this bubble was created precisely in the Spanish market when it discovered how cheap it was to build large scale plants! Many of the modules installed in Spain were Chinese. The response of the world’s new 21st century superpower, China has totally proved our thesis that photovoltaic energy is the electricity of the future.
What does the future hold? The incorporation of several thousand million individuals to the consumption patterns of the developed world has generated a need for much more electricity, and as mentioned, there is no technology easier and quicker to install than photovoltaic energy. However, in the short term many photovoltaic companies will fail and it will be necessary to exhaust the stocks which have been misguidedly generated. This will occur in about three years time, when, once again, we will see a rise in the price of photovoltaic electricity thus permitting development of a technological leap which in fact is on the point of occurring and which has only been postponed by the artificially low prices of current photovoltaic energy. Multijunction solar cells for concentration with performance exceeding 40%, third generation cells etc. This technological leap was another of the alternative conditions that we mentioned in our article which would ensure that photovoltaic electricity would gain ascendancy over other technologies.
This is because one aspect of photovoltaic power is that, more than any other energy source, it forms an integral part of 21st century science and technology. As a result, the pre-eminence that we had envisaged by mid- century, will now probably happen by the end of the first third.
How do we explain why this revolution (or bubble as some might like to call it) has occurred in Spain rather than in any other country? Spain has been involved in photovoltaic research since 1975. Solar cells have been manufactured here since 1981. It is one of the foremost countries and a pioneer in this area. Business schools in Spain are among the best in the world and many Spanish entrepreneurs are providing an enviable example of how to overcome the current crisis. Despite the fact that most of the technological investments in 2008 have fallen by the wayside, nevertheless, Spanish installers and technicians continue to lead the world in building large scale plants abroad.
The foregoing is intended to provide some assistance in assessing the counterpart to the levy on our electricity tariff from the photovoltaic bubble or revolution of 2008, and more importantly, to attempt to recover what we can from this disaster, which is a global phenomenon, and to persevere, having learnt new lessons, in an adventure which unquestionably has a certain future.
Antonio Luque is professor at the Polytechnic University of Madrid (UPM) Director of the UPM Solar Energy Institute and founder of Isofotón.