By Costis Stambolis
Over the last two to three years photovoltaic panels-which convert solar energy into electricity-are becoming more visible on the rooftops of office buildings, hotels, airports, industries and even on some house roofs. In addition several large and established power generating companies, especially in Europe, Japan, Australia and in the USA are investing in large scale photovoltaic power generation. The Brussels based European Photovoltaics Industries Association (EPIA) estimates that the global pv market is expanding at the phenomenal annual rate of 40%, a trend which they expect to last until 2010. From then on EPIA believes that market growth will be curtailed to 25% per year, falling even further to 20% by 2020.
In order to meet demand pv industries are investing heavily on new plant capacity or expanding existing one to the tune of 2.6 billion euros per year, for 2007 alone. According to analysts a total of 15 billion euros will be invested by industry in new facilities and research from now until 2010 in order to service the needs of a global market estimated at some 2.5 to 3.0 GW per year, corresponding to 12 to 15 billion euros in terms of sales. It is of interest to note that the European pv industry has a well recognized global lead as it is responsible for some 2.0 GW of pv production per year. This is in line with the fast growth of pv applications across Europe where 63% of the global grid connected applications are situated.(57% in Germany and 6% in other countries) Latest EPIA figures suggest that the total worldwide pv installed capacity is now in excess of 7 GW which is equivalent to seven large (i.e 1,000 MW each) nuclear power stations.
In sunny Greece, which compared to Germany and other northern European countries, incident solar radiation is on average twice as strong, the solar pv market is at its infancy. It is debatable if over the last twenty years a total of 5.0 MW has been installed. The bulk of these installations are to be found in remote telephone relay stations,in lighthouses and in thousands of small household applications in areas where grid connection is just too expensive.
Last year the government in an effort to boost renewable energy applications, in order to meet European Union targets for a 20 % power generation from RES by 2010, introduced a pioneering law (No.3468/2006) which provides hefty subsidies to RES producers, especially from photovoltaics and wind. The rates offered for the purchase of electricity from pv power producers vary between 0.40 to 0.50 per kwh, depending on location, and are considered to be some of the highest feed in tariffs in Europe.(the term feed in indicates that the power purchased is used to feed electricity into the grid) In addition a pv producer is entitled to a state subsidy, of 20% up to 40% of the total investment cost. As the rest of the pv installation cost can usually be covered through a bank loan, for a pv producer who happens to own the land, which is normally the case, the investment for a pv facility comes virtually free. No wonder that the Regulatory Energy Authority(RAE) which issues the necessary production licence has been flooded with thousands of applications from would be pv power producers.
Since the beginning of the year more than 1,500 applications have been received by RAE corresponding to 1,000 MW plus, surpassing the government’s target of 850 MW to be achieved by the year 2014. Market sources talk of the ‘photovoltaic craze’, or the ‘photovoltaic bubble’, very much reminiscent of the Athens Stock market
peak of 1999 and its subsequent crash of 2000. Especially in rural Greece the interest for pv related investments is so strong that there have been many cases where families have sold their houses to invest in pv installations. For a 100kw pv installation, costing 600,000 euros, a minimum land area of 5 acres (stremmata) is required. This is the type of installation that the large majority of home investors go for since below 100 Kw a full license is not required and normally an exemption is granted. For installations above 100 kw the licencing procedure gets more complicated and the need for an environmental waiver is paramount.
Given the unexpectedly large number of applications submitted and the continuously growing interest by investors,the government has found itself in a tight spot and has announced that the whole pv programme may soon come in for revision. Which means that it will soon be obliged to introduce an upper ceiling and therefore stop receiving new applications for some time. However, as the country has entered a pre election period no politician in his right frame of mind will dare announce such unpopular measure before elections. The ministry of the economy is also extremely concerned with the way that the photovoltaic licences are being granted since fairly soon, within 2008, it will have to find substantial
amounts of money to pay for the investment subsidies, which according to one source already exceed 400 million euro for next year and 800 million euro for 2009. Government sources familiar with the situation note that economy minister Mr. George Alogoskoufis has warned the ministry of Development, which supervises the energy sector, that there is no way that state budget can support this type of expenditure in order to finance a new breed of entrepreneurs.
Notwithstanding the financial mess that the pv licencing management is leading the government into,and the thousands of investors who may soon find themselves holding useless licence documents, the pv market in Greece may soon face one more shock as the readily available pv stock for sale cannot satisfy orders of more than 20 to 30 MW for delivery in 2008, assuming that Greek companies manage to get their act together and actually order such capacities. Another limiting factor for developing a truly large scale pv market, in the scale that the government aspires to, is the lack of adequate electricity distribution lines. “To add one megatt here and few kilowatts there the present grid can cope adequately. But if you start putting few megawatts in one place and tens of megawatts in another you will need to expand and upgrade the present grid’, notes an electrical engineer with a first hand knowledge of the Greek grid structure. If you add all the above constraints, add market sources, it will be a miracle if some 10 to 15 MW of pv plants will have been actually installed in Greece by the end of next year. A far cry from the government’s grandiose plans to make Greece the new photovoltaic Eldorado.