Last decade was stamped by the rapid growth of solar photovoltaics market. Global capacity grew from 6 GW in 2006 to almost 300 GW by the end of 2016. This marks the beginning of a new trend in the global renewable energy industry. The main drivers of the capacity growth are China and Japan that have contributed 88 GW alone between 2014 and 2016. Especially China, is the home of 27% (2016) of the global installed capacity of solar PV. United States present slow but steady growth of the PV market, while Europe presents a decline in its annual installations. Together with the global increase of installed capacity, comes increased efficiencies that eventually lead to reduced prices. Indeed, solar PV panels increased their efficiency from 12% in 2006 to 17% in 2016, while in laboratory conditions, efficiencies of 24% are observed. The increased efficiency facilitates the reduction of prices and eventually the costs to consumers. Europe leads the race of cost reduction; as solar PV modules are now 83% cheaper comparing to 2010. In United Kingdom, the cost for a utility scale PV power plant was almost 5700 USD/kW in 2010 while now the same plant will cost 76% less at 2000 USD/kW. In 2016 the average selling prices for China were around 0.43 USD/Watt, while in US was 0.61 USD/Watt. As can be observed in Figure.1, prices may vary not only with the technology of the PV module but with the location of the manufacturer as well. Crystalline PV modules, the most used ones, present greater efficiency and highest price per Watt produced compared to Thin film a-Si and CdS-CdTe. Following 2010, a sharp reduction, due to technological breakthroughs, is noticed and by the end of 2017 prices around the world tend to equalize. Globally, the levelised cost of electricity (LCOE), which refers to the actual price the consumer pays for the electricity from a PV power plant, experienced a dramatic fall from an average of 0.36 USD/kWh to 0.10 USD/kWh in seven years. Once again, innovation and governmental subsidies lead to a free fall for prices and open new opportunities for solar energy. With such costs and great capacity factors, solar energy starts to become competitive in markets like Africa, where few years back only pilot power plants were existed. The final cost is constituted from three main sub-costs. More than 70% is the hardware cost that includes the module, the inverter, cabling and the connection to the grid. Those costs fell substantially during the past decade and are expected to fall more. The installation costs are stable, not only worldwide but during the past years as well.
Figure.1, Average monthly European solar PV module prices by technology and manufacturer. GlobalData, 2017;
Economic opportunities have caused significant growth in the commercial sector solar PV installations. The declining trend in the costs, continues globally and in UK alone, an 82% occurred. Not such sharp changes are noticed in the residential sector. Mostly subsidies drive residential solar plants costs down. France is the leader with a decrease of costs of 66% and Spain following with 48% decrease, between 2013and 2016. Last but not least, is worth mentioning that research and subsidies drive PV costs down in a rapid way. Cheap costs imply low prices for consumers and increased competitiveness of the solar power plants. With such prices, new opportunities arise for the emerging economies and developing states. Still 600 million people are out of grid connection, the majority of them in Africa and Asia. Residential scale solar PV plants could provide a great solution to electrify the remaining population through the application of solar mini grids.