Analysis of diffusion paths for photovoltaic technology based on experience curves

This paper assesses the prospects for diffusion of photovoltaic (PV) technology for electricity generation in grid-connected systems. The analysis begins with the calculation of the break-even price of PV systems and modules, which is the price that can assure commercial viability without incentives or subsidies. The calculated average break-even price of PV systems for building-integrated applications is about $3.2/W-p, but can go up to about $4.5/W-p in areas with very good solar irradiation and if a low real discount rate is applied. These are higher values than the break-even prices estimated in the literature to date. PV system break-even prices for intermediate load generation in utility-owned systems are also calculated, their average being, about $1/W-p. The methodology of experience curves is used to predict what would be the different levels of cumulative world PV shipments required to reach the calculated break-even prices of PV systems, assuming different trends in the relationship between price and the increase in cumulative shipments. The years in which the break-even levels of cumulative shipments could be theoretically obtained are then calculated by considering different market growth rates. Photovoltaics could enter the niche of building-integrated applications without incentives in the first years of the next decade, provided that the PR is 80% and the average annual world market growth rate is at least 15%. The final part of the paper analyzes the niche markets or applications that seem promising for the diffusion of photovoltaics in the next few years. (C) 2003 Elsevier Ltd. All rights reserved.