Timescale and deployment barriers home > PV snapshot>
Last updated: 13 June 2007

The main reason for relatively low deployment of PV in both developing countries and grid-connected markets is the high cost of the technology. Achieving the technology cost reductions to underpin PV pricing that is competitive with the alternatives will require public support - probably significant and possibly over an extended period of time. Failing to achieve this could see the technology only advancing slowly beyond the current almost imperceptible contribution to global energy supplies, while attaining marketable price levels within the next decade could herald undreamt of possibilities for growth of the industry and a real impact on global energy supplies in coming decades.

The main support measures that have been and are being used to address deployment barriers in the IEA PVPS countries continue to be the subsidies to reduce the up-front cost of systems and the payments for the PV electricity produced (enhanced feed-in tariffs). Various forms of tax credits appear to be emerging in a number of countries as an attractive support measure. Also, as the PV market matures and opportunities for business are identified, various non-utility as well as utility-based commercial initiatives are emerging. These include activities such as preferential home mortgage terms and green loans from commercial banks, share offerings in private PV investment funds plus other schemes that all focus on wealth creation and business success using PV as a vehicle to achieve these ends. Many governments turning their attention to longer-term approaches to climate change and energy security issues are implementing or considering the regulatory approach commonly referred to as the 'renewable portfolio standard' (RPS) to increase renewable energy deployment in their countries. Within the electricity utility sector different business models of PV promotion are emerging, partly in response to public policy and regulation and partly to realize business opportunities. There are a number of 'green power' schemes offered by electricity businesses in which customers can purchase green electricity. In practice, support can involve a combination of measures and will usually function more effectively when this is the case. Funding issues, awareness raising and stakeholder engagement are significant and are critical to the success of any mechanism.

In developing countries, the problem is not the great number of potential applications but the lack of spending power and financing options - in spite of the fact that today PV is already competitive with other technologies for these applications.