Solar photovoltaics (PV) convert solar energy directly into electricity using a semiconducting material. Conventional crystalline silicon-based solar PV cells comprise the majority of this market today, though recent shortages of silicon have increased investments in alternative types of PVs such as thin film cells. Thin film technology is cheaper than silicon-based PV, but is currently less efficient.
Solar cells can be used in small products such as calculators and watches, or grouped into solar panels, which in turn can be assembled into arrays to meet greater energy needs (see figure). Larger applications include remote stand-alone systems, grid-connected systems for buildings, and large-scale power plants. The modular flexibility, ease of installation, low maintenance, and minimal environmental impacts make PVs attractive long-term prospects for mass production and application in many parts of the world. Solar PVs produce energy without emitting air pollution or greenhouse gases; thus, they are an important option to meet rising electricity demand in a carbon-constrained world. There are some environmental and human health concerns associated with chemicals, such as cadmium and arsenic, used in the manufacturing process. However, these hazards can be minimized with proper handling and safety precautions.
According to the Solar Energy Industries Association (SEIA), global PV market growth has averaged 25 percent annually over the last 10 years, with worldwide growth rates for the last 5 years well over 35 percent. Despite this rapid growth, PVs still account for a small percentage of global electricity generation. Deployed PV systems around the globe totaled approximately 5,000 megawatts of capacity in 2005. One of the primary reasons for limited diffusion of PVs is high costs, particularly for grid-connected systems. Capital costs have declined significantly since the 1970s from $30-35 per watt to $4-5 per watt today. Nevertheless, PVs are not yet competitive with grid connected systems. The intermittent nature of this power is an additional hurdle; off-grid systems require back-up power or battery storage, increasing overall costs.
The main challenge facing the solar industry today is to improve the efficiency of PV systems while making costs comparable to other electricity generating technologies. Solar PVs are gradually becoming popular, particularly for small off-grid applications. Japan and Germany are leading the way with robust national incentive policies, despite inferior sunlight availability. In the United States incentives are being provided by states to buy down the costs of PV installation. California’s Million Solar Roofs Program, with a goal to create 3,000 megawatts of new solar installations by 2017, is a significant step in promoting the abundant resource. With technological innovation, coherent policies and further cost reductions, solar photovoltaics will play an increasingly important role in meeting our energy needs.