Solar energy industry and engineering is becoming a breakthrough

Solar energy is becoming profitable

JEAN PIERRE FARANDOU / KEOLIS CEO | DEC. 12th

A photovoltaic power plant in Dubai - courtezy enerzine

A Dubai solar field is considering to sell its power generation for € 48 per MWh.
In many countries, this energy is no more subsidized.

The revolution of solar energy is on. Friday, Acwa Power, a Saudi company, won a tender in Dubaï, as it offered a 48€ rate per MWh for a photovoltaic solar field. The steadily decrease of solar power production cost carries on.  In many countries, such as Chile, South Africa or India, this energy is becoming less expensive than traditional ones: coal, gas or nuclear…”Even in France, the gap has been divided by three since several years”,  said Gérard Mestrallet, GDF Suez CEO. But France is quite an exceptional case because of its particularly low price of historic nuclear power generation: the market price amounts to € 40 per MWh.

No risk in the long term

Why is there a so dramatic reduction of costs? “Three factors must be taken into account”, explains Thierry Lepercq, Solairedirect CEO (a French SME). “First, we face a steadily increase of photovoltaic cells yield, which may increase by 20% more in the next decade. Then, since 2008, the costs of modules producing solar energy have dropped by six. Finally, financial costs have been reduced by two, as investors consider that the risk rate of the sector is relatively low in the long term.”

In some countries, solar energy is no more subsidized. Gérard Mestrallet says: “when its costs will reach the market levels, many public and private actors will swing over to this energy generation, which will be at the core of the energetic transition”. France has still a lot to do. Whereas our Italian neighbor produces 10% of its power demand from solar energy, this one only supplies 1% of the French power generation. That’s why the general public has got an image of a secondary energy, used only to plug some information panels or to warm pools.

Nevertheless, French groups are reconsidering their position. In 2011, Total bought back Sunpower, an American leader of the sector. Patrick Pouyanné, Total CEO, confirms the strategic aspect of this activity for the French oil group : “We have invested € 2 billion in solar sector. We consider that this sector will develop, as this activity has become profitable in some twenty countries, compared with other power sources.”

How high may the evolution of solar sector be? The GlobalData cabinet expects that the installed power will grow by three by 2020, to amount to 414 gigawatts. “Solar market share may amount to 20%. Beyond this limit, the problem of its sporadic feature, such as night, will arise”, Thierry Lepercq says.

The next challenge to be faced by the sector shall consist in storing the produced power. Moreover people will need to change their habits, such as consuming power when the sun shines!

Jean-Pierre Farandou, Les Echos