Taiwan jumps on the global photovoltaic power generation bandwagon

This article was published by the Taiwan Headlines on September 15, 2006. It reports that the government in Taiwan recently decided to join the burgeoning global effort to develop photovoltaic products and markets, in an attempt to address the twin problems of declining energy supplies and increasing CO2 emissions.

The Bureau of Energy under the Ministry of Economic Affairs recently proposed a plan for the development of the local photovoltaic industry. The target is to expand the industry's annual output value to NT$213 billion (US$6.66 billion) by 2015. This is approximately 30 times the industry's projected 2006 production value of NT$7 billion.

The Bureau of Energy has adopted four major strategies in order to achieve this target. One strategy is the provision of assistance for the development of the local polysilicon industry in order to help domestic photovoltaic companies solve the chronic shortage of polysilicon materials - which is the major bottleneck to the industry's development at present.

Another strategy is to promote the development of polysilicon production technology, by recruiting retired technicians from abroad, by attracting foreign polysilicon suppliers to set up factories in Taiwan, and by investing in the development of such technology. In order to help manufacturers develop high-efficiency, low-cost polysilicon solar cells, the government in Taiwan will further provide subsidies to high-tech products that focus on the manufacturing technology for thin-film silicon chips.

The third strategy is the provision of assistance for the development of next-generation solar cells. The fourth strategy is the offering of help for the development of techniques for the testing and inspection of photovoltaic modules, photovoltaic area networks and photovoltaic production equipment.

Most significantly, the government in Taiwan is following the example of other governments by devoting efforts to the development of the local photovoltaic market. The aim is to boost Taiwan's output of photovoltaic power to 21 megawatts by 2010, up from just 1.2 MW in 2004. In order to achieve this goal, the Bureau of Energy is encouraging city governments to build solar-energy-related structures, to construct solar-energy demonstration buildings at transportation hubs, to subsidize households in the installation of solar roofs, and to establish emergency solar-power-generating facilities in mountain villages and on offshore islands. Meanwhile, the government is also working to enact a Statute for the Development of Renewable Energy with the aim of boosting the development of solar and other renewable forms of energy.

According to this article, the aforementioned effort reflects Taiwan's determination to catch up with global trend toward the development of the photovoltaic industry, which has been gathering steam in recent years due to the increasing global energy shortage and growing concerns over CO2 emissions.

Indeed, the connection of photovoltaic power to utility grids is now mainstream business of the global photovoltaic industry. Independent photovoltaic power generation, mainly for remote areas, is also a prominent issue.

According to this article, the world's total installed photovoltaic power generation capacity topped 2,694 MW in 2004, which was about 86 percent higher than the figure of 1,446 MW of capacity in 2003. Specifically, Japan is the world leader in the field and boasts 1,132 MW of installed capacity in 2004, accounting for 42 percent of the global total. Germany followed with 794 MW, or 30 percent. The United States took the third place with 365 MW, or 14 percent.

According to this article, global photovoltaic generating capacity is expected to hit 13 GW (gigawatts) by 2010. The world's total photovoltaic generating capacity topped 875 MW in 2004, an increase of 18.7 percent from the figure of 737 MW in 2003. The exciting news is that global output is projected to grow at a compound average rate of 32.6 percent between 2006 and 2010. Indeed, the European Renewable Energy Commission believes that by 2040, photovoltaic power will account for one quarter of global power generation.

According to this article, one major reason for the rapid growth of the global photovoltaic industry is encouragement by governments, mainly in the form of direct subsidies and the buying of generated power. In this regard, the Japanese and German governments are the most active advocates.

However, the photovoltaic industry is encountering two major obstacles to further development. One is a serious shortage of polysilicon materials, which has driven costs to an extraordinary high level. The other is the high cost of photovoltaic power generation, which is now about 3 to 10 times higher than that for other forms of power. For example, the current cost of photovoltaic power is US$0.25 to US$0.4 for every kilowatt/hour, compared with US$0.06-0.08 for oil, US$0.02-0.04 for coal, and US$0.03-0.06 for nuclear.

Nonetheless, experts believe that these problems can be solved by improving the efficiency of silicon materials and by making the silicon wafers slimmer. This is expected to cut costs by about 40 percent by 2010. Indeed, experts predict that the cost of photovoltaic power will drop at an annual clip of 5 percent, and that the cost will be equal to that of other forms of power generation by 2030.

According to this article, Taiwan is in an advantageous position for development of the photovoltaic industry because of its highly developed IC industry, whose production technology is similar to that used in the making of solar cells. For example, in 2005, Taiwan's top solar-cell producer Motech boasted a global market share of 4.3 percent, ranking 9th worldwide. In the previous year, the company's global market share was only 2.93 percent and ranked 10th worldwide.