Cost-effective photovoltaic power systems presently are employed in a wide range of applications, mainly to supply electric energy to isolated users and remote communities, both in rural areas of IEA member countries and in the developing countries. Solar Home Systems, powering lights and television sets in about half a million rural households, represent a fast growing PV market segment. Their introduction is supported by bilateral and multilateral agencies, because they provide a viable electrification alternative. Ensuring the quality of these systems for their users becomes an important issue.

In the near future the most important PV applications in the IEA member countries are expected to be decentralized generators connected to the utility grid, either integrated into buildings and structures, or ground based plants to provide grid support and peak power, when cost-reduction will encourage the ever larger deployment of these market segments.

In the long term PV will become a significant renewable energy option, which is illustrated by the following initiatives:

• The PV Programmes in the IEA member countries, such as Japan, Italy, Germany, the Netherlands and the USA, aiming at millions of PV covered roofs;
• The rapid growth of investments in PV manufacturing capacity, particularly by multinational energy companies;
• The Renewable Energy White Paper by the European Union.

A number of barriers, principally economic, need to be overcome before sustainable PV deployment can occur:

• Current PV prices are too high for self sustaining commercialization;
• Non traditional benefits of PV have not yet been accepted;
• Lack of awareness of the PV potential for electric service application, sceptical attitude of utilities;
• Infrastructure is inadequate for broad market acceptance - from standardized package to marketing, to installation and operation;
• Lack of market understanding; no business plan, unclear product (selling equipment, power, service);
• Lack of clear technology winners increases uncertainty and risks;
• Assessment of strategic, competitive advantages available in relation to alternative technologies is missing.

Four main categories of priorities are to be addressed to allow PV to become a significant renewable energy option:

• Reduction of cost
• Increased awareness of PV potential and value of PV energy to utilities and customers
• Removal of technical and non-technical barriers to large deployment of PV systems
• Enhancing technology co-operation.

Reduction of cost
The path to cost-effectiveness depends upon progress in several areas. For the PV generator: enhancement of the performance of present silicon technologies; innovative material and device structures; automated and low-energy manufacturing processes. For the balance of system: design of low-cost support structures, pre-assembled panels, reliable inverters; appropriate integration into building and structures; grid interface devices; whole system design.
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Increased awareness of PV potential and value of PV energy to utilities and customers
Grid-connected photovoltaic power systems may be not yet cost-effective when compared to the energy produced by traditional power plants, but is rapidly becoming a real market, given the various green incentives offered in many countries. At the same time they strongly raise the awareness among the public as well as the policy makers about the potential of PV, particularly in the built environment. Success stories should contribute to increasing the awareness of PV potential.
In many off-grid situations PV power systems are presently already competitive with grid extension or, in remote areas, small diesel generators.
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Foster the removal of technical and non-technical barriers
Targeted and reliable information should increase the public and expert awareness of the capability of PV technology, leading to the reduction of market barriers. A variety of non-technical barriers have to be removed, such as lack of standards, lack of legislation, difficult access to the grid, financial and fiscal obstacles. The inclusion of the additional social and environmental "hidden" cost of the various traditional energy processes (the so-called externalities) in the economic planning of power plants should further reduce the gap between cost and value of photovoltaic power systems, which are emission-free during their operation.
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Enhancing technology co-operation
PV systems, powering high efficiency lamps and radio/TV sets, provide an increasingly important electrification alternative for rural households, even at present cost levels. Major barriers for their wide-spread introduction vary from country to country, but usually include: providing acceptable financing, organizing installation and after-sales service, assuring technical quality through national standards, providing and distributing paper information. PVPS can help by enhancing transfer of knowledge on PV systems in general and on quality and standardization in particular.

The IEA Implementing Agreement on Photovoltaic Power Systems (PVPS), established in 1992, is an effort of OECD countries to address a number of the above priorities, except fundamental research, manufacturing processes and consumer applications. Fundamental research on PV cell technologies is being undertaken by other national and international programmes, manufacturing processes are in the competitive domain of PV companies and the consumer applications, such as PV calculators and watches, benefit from a separate and profitable market. The PVPS Agreement focuses on the pre-competitive and non-commercial aspects of the planning, design, construction, operational performance and promotion of PV power systems. The IEA  PVPS Agreement shall encourage and maintain close liaison with appropriate IEA Implementing Agreements and the IEA-REWP.

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