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Frontpage

The Sun Rises on the

Kingdom of Saudi Arabia

An analysis on how to fulfill Saudi Arabias Solar Energy Potential

M.Sc.Cand.Merc. Management of Innovation and Business Development

Dennis Kim Sarup

Signature__________________Date_________.

CPR nr. 300984-2445

Tabs: 181.879

4th of April 2014 Master Thesis

Supervisor: Sigvald Harryson Copenhagen Business School 2014

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Abstract Everything becomes a little different as soon as it is spoken out loud. - Hermann Hesse 1

The theses search of investigation is to illuminate how the Kingdom of Saudi Arabia may utilize their solar

energy investment of USD 109 billion in PV knowledge and technology to develop a sustainable PV industry.

To elaborate on this interesting matter, a qualitative framework is used to perspective the phenomena within

the four top PV nations; USA, Japan, Germany and China. Moreover, an extensive work of state-of-art,

standard and novel PV technologies is presented to illuminate, which technologies may be most preferable

for the Kingdom of Saudi Arabia to invest in. The field of research relays on Grounded Theory, aiming to

provide with a new theoretical approach of how to visualize the hermeneutical maturing process of the PV

technology, PV industry and PV adoption segment, through the implementation of policy incentives. This may

hence be used as a theoretically framework that evaluates the effects of policy incentive and how to kick-

start any random nation PV implementation and development. The steps taking will hence provide with an

answer on how the Saudi PV deployment and development policy should be, by zooming-in on the PV

technology, industry and adoption-segment barriers. The thesis final chapter will provide with 8 proposals

and recommendations, serving as a contribution to the Kingdom of Saudi Arabia future PV solar adventure.

1 Quote 1, homepage

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Table of Content Abstract ............................................................................................................................................................. 2 Abbreviation ..................................................................................................................................................... 5

List of figures ...................................................................................................................................................... 6

List of tables ........................................................................................................................................................ 7

1. Introduction - The sustainable PV solar energy solution ............................................................................... 8

1.1 Solar energy in Middle Eastern market .................................................................................................. 8

1.2 The Kingdom of Saudi Arabia potential PV solar market ........................................................................ 9

1.3 Readers guide ....................................................................................................................................... 12

2. Methodology ................................................................................................................................................ 13

2.1 Qualitative framework ........................................................................................................................... 13

2.2 The theoretical lens ............................................................................................................................... 14

2.3 A deductive and inductive approach ..................................................................................................... 15

2.4 Data Collection ...................................................................................................................................... 16

2.5 Credibility of empirical findings ............................................................................................................ 18

3. Theoretical framework ................................................................................................................................. 20 3.1 The Economics of Industrial Innovation ................................................................................................ 20 3.2 General Purpose Technology ................................................................................................................. 21

3.3 Standardization in technology-based markets ...................................................................................... 21

3.4 Crossing the chasm to the critical citizens.............................................................................................. 22

3.1.1 The Technology Adoption Life Cycle adopter segments ................................................................. 23

3.1.2 Partnership and tactical alliances ................................................................................................... 23

3.1.3 Competition in the market .............................................................................................................. 24

3.5 Chain-Link model .................................................................................................................................... 24

3.6 The Tangible Technology Triangulation model ...................................................................................... 24

4. The PV review ............................................................................................................................................... 27

4.1 State-of-art, standard and novel PV technologies (Summery) .............................................................. 27

5. The beginning of a new self-sufficient energy era ...................................................................................... 31

5.1 Present PV solar installation ................................................................................................................. 31

5.2 PV projections ......................................................................................................................................... 32

5.3 PV grid-parity .......................................................................................................................................... 33

6. The PV industry path to prosperity ............................................................................................................. 35 6.1 The United States of America PV ............................................................................................................ 36

6.1.1 The US PV market structure ........................................................................................................... 37

6.2 The Japanese PV ..................................................................................................................................... 37

6.2.1 The Japanese PV market structure ................................................................................................. 39

6.3. The German PV ...................................................................................................................................... 40

6.3.1 The German PV market structure ................................................................................................... 42

6.4 The Chinese PV ....................................................................................................................................... 43

6.4.1 The Chinese PV market structure ................................................................................................... 44

6.5. Patents in USA, Japan, Germany and China ......................................................................................... 45

6.6 The World dominating PV companies ................................................................................................... 45

7. PV steps of tomorrow .................................................................................................................................. 48

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7.1 Build Integrating PV .............................................................................................................................. 48

7.2 PV environmental hazard ...................................................................................................................... 48

7.3 PV recycling ............................................................................................................................................. 49

8. Analyzing the PV past, present and prediction ........................................................................................... 51 8.1 The PV tehcnology potential future ....................................................................................................... 51

8.1.1 PV time of innovation impact ......................................................................................................... 51

8.1.2 The commercial PV technology ..................................................................................................... 52

8.1.3 PV price relation ............................................................................................................................ 53

8.1.4.PV technology performance ........................................................................................................... 53

8.1.5 The PV price and dust problem ...................................................................................................... 54

8.1.6 PV speed of production ................................................................................................................. 55

8.1.7 PV temperature performance influence ........................................................................................ 56

8.1.8 PV practical ability ........................................................................................................................... 56

8.1.9 Build Integrated PV compelling reason .......................................................................................... 57

8.2 The United States of America PV industry insights .............................................................................. 58

8.3 The Japanese PV industry insights ........................................................................................................ 59

8.4 The German and Chinese PV industry insight ....................................................................................... 60

8.5 Evaluation of the PV Industry achievements ........................................................................................ 61

8.5.1 The consequence of the overcrowded market .............................................................................. 63

8.5.2 The PV paradox .............................................................................................................................. 63

8.6 Alternative and new supplementing adoption approaches ................................................................... 64

8.6.1 SolarCity approach ......................................................................................................................... 64

8.6.2 The Purchasing Power Agreement ................................................................................................. 65

8.7 The PV companies of the next era ......................................................................................................... 65

8.8 Expanding the PV value chain with PV recycling .................................................................................. 66

8.9 National leaps for PV technology and knowledge implementation ...................................................... 66

9.0 An adopter focused solution .................................................................................................................. 69

9.0.1 Price-reduction influence ................................................................................................................ 69

9.0.2 PV system awareness and knowledge diffusion ............................................................................. 70

9.0.3 National visual branding .................................................................................................................. 70

9.1 Forecast scenario ................................................................................................................................... 70

10. Conclusion The 8 proposals and recommendations ......................................................................... 74 10.1 Choosing the right PV technology ....................................................................................................... 74 10.2 Attaining technology leadership through R&D .................................................................................... 76

10.3 Getting the policy incentives right ....................................................................................................... 76

10.4 Using PV industry insights .................................................................................................................... 77

10.5 PV price per watt and industry capacity ............................................................................................. 78

10.6 PV companies of the future .................................................................................................................. 79

10.7 Domestic adopter demands ................................................................................................................ 79

10.8 Promoting PV business development .................................................................................................. 79

11. A perspective on the future ....................................................................................................................... 81

12. Biography .................................................................................................................................................... 82

13 Appendices .................................................................................................................................................. 92

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Abbreviation Make everything as simple as possible, but not simpler Albert Einstein 2

4T-model: The Tangible Technology Triangulation model

AC: Alternating Current

Approx.: Approximately

A-Si: Amorphous silicon

A-Si/c-Si: Micromorph silicon

BIPV: Building-Integrated Systems

CdTe: Cadmium Telluride

CIGS: Copper-Indium-Gallium-Diselenide

CIS: Copper-Indium-Diselenide

C-Si: Crystalline silicon

CSP: Concentrating solar power

DC: Direct Current

DOE: Department of Energy

DTU: Danish Technical University

FDI: Foreign Direct investment

EIA: US Government Energy Information Administration

EPIA: European PV Industry Association

FDI: Foreign Direct Investment

FIT: Feed-in tariffs

IEA: International Energy Agency

GW: Gigawatt

KACARE: King Abdullah City for Atomic and Renewable Energy

KSA: Kingdom of Saudi Arabia

kWh: Kilowatt-hour

kW: Kilowatt

MW: Megawatt

NEM: Net Metering

PV: Photovoltaic

R&D: Research and Development

RPS: Renewable Portfolio Standards

STC: Standard Test Condition

TALC: Technology Adoption Life Cycle

US: United States of America

USD: United States dollar

2 Quote 15, homepage

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List of Figures Figure 1 - Potential terawatt hours (Statista 2012) ........................................................................................... 9

Figure 2 - Burning natural gas to produce electricity costs more than electricity (Kearney, 2008) ................ 10

Figure 3 - Readers guide step-by-step ............................................................................................................. 12

Figure 4 - Deductive and Inductive approach (Blumberg et. Al., 2003) .......................................................... 15

Figure 5 - Triangulation model (Saunders, et al., 2012) .................................................................................. 16

Figure 6 - Waves of Innovation (Hargroves et al. 2005) .................................................................................. 20

Figure 7 - Technology Adoption Life Cycle (More, 1991) ................................................................................ 22

Figure 8 - Competitive-Positioning Compass (More, 1991) ............................................................................ 24

Figure 9 Chain-Link Model (Kline, et al., 1986) ............................................................................................. 24

Figure 10 - The Tangible Technology Triangulation model ............................................................................. 25

Figure 11 - Illustration of PV system energy generation ................................................................................. 27

Figure 12 - PV technology efficiency records (NREL Efficiency, homepage) ................................................... 30

Figure 13 PV value chain (Deloitte, homepage) ........................................................................................... 31

Figure 14 Accumulated and annual global PV installation; 2004 2014 (appendix 7, 4) ............................ 32

Figure 15 - PV c-Si price curve; 1980 2014 (Appendix 7, table 2) ................................................................ 33

Figure 16 - National PV price grid-parity (Bloomberg Energy Finance) ........................................................... 34

Figure 17 - PV domestic market in Japan, 19902013 (Appendix 7, 8.1) ........................................................ 38

Figure 18 - PV domestic market in Germany, 19902013 (appendix 7, 8.2)................................................... 40

Figure 19 - German PV module price decline, 2009 2014 (Appendix 7, 1) ................................................... 41

Figure 20 - German upstream PV value chain (Grau, et al., 2011) .................................................................. 42

Figure 21 German PV cluster (Industry overview; The PV Market in Germany 2013/2014, report) ........... 42

Figure 22 China PV upstream PV value chain (Grau, et al., 2011) ................................................................ 44

Figure 23 PV ustream patent 20062007 (Glachant, et al., 2010) ............................................................... 45

Figure 24 - Annual patent application for PV (Glachant, et al., 2010)............................................................. 45

Figure 25 - Top 10 PV company in 1988 (Jones, et al., 2012) .......................................................................... 46

Figure 26 - Illustration of the PV Recycling Cycle ............................................................................................ 49

Figure 27 Global Adoption and price-reduction curve (Appendix 7, 6.1 ) .................................................... 52

Figure 28 Illustration of PV module value .................................................................................................... 54

Figure 29 - Average price of PV c-Si and thin-film (Appendix 7, 3).................................................................. 55

Figure 30 - Crystalline PV module price in Japan, Germany and China; 2009 - 2014 (appendix 7.1) ............. 62

Figure 31 - PV market future forecast momentum ......................................................................................... 65

Figure 32 - The PV value chain extra link of PV Recycling ............................................................................ 66

Figure 33 - National PV leaps ........................................................................................................................... 66

Figure 34 - Illustration the potential global installation; 2003 2050 (Appendix 7, 4)................................... 71

Figure 35 - Three possible PV forecast scenarios; 2014 - 2020 ....................................................................... 72

Figure 36 - Illustrating irradiation absorption of the band-gabs (Clean Technica, homepage) ...................... 93

Figure 37 - Installed capacity and hypothetical values for the scenario (Leepa, et al., 2013). .................... 110

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List of Tables Table 1 - Explorative interviews ...................................................................................................................... 16

Table 2 - Semi-structured interviews .............................................................................................................. 17

Table 3 - PV technology overview .................................................................................................................. 28

Table 4 - Incentive table ................................................................................................................................. 35

Tabel 5 - World ranking of PV companies from 2008 2013 ......................................................................... 47

Table 6 - PV technology kWh/m2 output in KSA .............................................................................................. 75

Table 7 - Top 15 PV companies (Appendix 3.1) ............................................................................................. 104

Table 8 - Innovation companies or research center (NREL Efficiency, homepage) (appendix3.2) ............... 104

Table 9 - Comparison of different FIT regimes (Leepa, et al., 2013). ............................................................ 110

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1. Introduction - The sustainable PV solar energy solution It is easier to resist the beginning than the end Leonardo da Vinci 3

The increasing global electricity energy consumption has the last decades created a pressing need to

accelerate the innovation development among the sustainable energy technologies. According to the US

Government Energy Information Administration (EIA), the world electricity consumption was approx. 17

trillion kWh in 2005. This is expected to rise to 24 trillion by 2015, and 33 trillion by 2030 (Solarfact,

homepage). This raises the issue of how to address the global challenges of energy security, climate change

and national energy independency (Sherwani, et al., 2009; Bahrami, 2012). Solar energy has proved to be a

top renewable candidate to meet the earths future challenges, as the solar technology efficiency has

increased remarkably. Renewable energy resources have since the early 1960s been a philanthropic

environmental quest to reduce carbon dioxide globally. However, it is not until recently that a part of the

sustainable energy solution, including solar energy technology, has reached an economic motive among

many nations. While electricity-price on conventional production methods are staying stable or increasing,

the cost of a solar energy is declining. Solar energy has transitioned from being primarily driven by

environmental ideology, to actually being a cost effective solution (Singh, 2013; IEA-Technology, 2010;

Chowdhury, et al., 2014).

Conditions and circumstances may differ substantially from nation to nation, due to different energy policies

implementation, public support programs, national structural setup and the range of centralized utility

markets- Four particular nations where the solar energy is sparkling is USA, Japan, Germany and China (that

will be inspected in the thesis). These examples have a worldwide meaning, as they encourage many other

nations, governments and politician to follow the sustainable energy path. A particular region that is

sprouting and testing the PV technology by installing PV pilot projects is the Middle Eastern region.

1.1 Solar energy in Middle Eastern market

In the last five decades the Middle Eastern region been a one of the fastest growing emerging economies

worldwide with a growth-rate of approx. 4% in 2012 (IMF, article). The Middle East region will in the coming

decades, if widely held predictions turn out to be correct, not sustain sufficient energy to cover the rapidly

rising energy consumption that is occurring in line with the growing population and a demanding energy

industry (Griffiths, 2012). With the intention of developing the sufficient energy foundation towards the

future, proactive sustainable and renewable energy solutions are in the preliminary implementation stage in

many the Middle Eastern nations. In 2011, the whole Middle Eastern region installed PV solar energy of 0.131

3 Quote 14, homepage

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gigawatt (GW), which compared to Europes 21.939GW, Chinas 2.2GW, USA 2.2GW must be considered to

be relatively low, indicating that the Middle East is developing solar pilot project (EPIA, homepage).

1.2 The Kingdom of Saudi Arabia potential PV solar market

The Kingdom of Saudi Arabia (KSA) will in the coming decades face the challenge of electricity scarcity, due

to an accelerating level of electricity consumption and a growing population, expected to grow from 27.2

million (2010) to 43.5 million by 2040 (Population Review, homepage). To address

this issue, the Custodian of the Two Holy Mosques King Abdullah have recently

declared a new plan of energy diversify from oil to solar energy and other

renewable energy resources - and founded in April 2010, King Abdullah City for

Atomic and Renewable Energy (KACARE) (KACARE, homepage). The Deputy

President of KACARE, Walid Abu Al-Faraj, states that this will lead to an energy

production shift in the Kingdom, by converting the country into a sustainable

energy nation (ArabNews, article). KACARE have announced that the KSA will

invest USD 109 billion in solar energy to produce 41GW by 2032 (SaudiGazetta,

article). This is an ambitious goal from where several domestic challenges,

implications and opportunities arise. KACARE states that PV solar are now playing

an increasingly important role and are an area where KACARE seeks to become

involved in both their development and manufacture alongside local and international stakeholders, whilst

also transferring technical capabilities and skills to Saudi citizens (KACARE , homepage). According to Maher

Al-Odan at KACARE, the plan involves developing 41GW of solar power within two decades, estimated to

cover a third of the energy consumption. The current plan is to install 25GW solar thermal plants and 16GW

PV (PV) panels. KSA plans to start its first tender targeting 2GW of solar energy in early 2013 and plan a

second tender in 2014 aiming for 2.5GW. The solar energy investment is anticipated to reduce the KSA

domestic oil consumption by as much as 523,000 barrels a day over the next 20 years, prolonging KSA global

oil advantage, and continue to generate a high revenue, when sold to foreign nations (Saudi-Gazette,

article).4 KSA is blessed with plenty of sun hours and has a high quantity of irradiation. Compared to for e.g.

Germany and Denmark with an average annual irradiation sum between 900 1200 kWh/m2, KSA has an

average annual irradiation sum between 1800-2200 kWh/m2 (Appendix 5, 1). This means that the harnessing

the sun energy theoretically could be twice as effective on the same PV module, thereby lowering the

payback time by half (ISE Fraunhofer 2012, report). KSAs high irradiation and untouched landmass of

4 The demand for oil is estimated to grow from 3.4 million barrels/day in 2010 to 8.3 million barrels/day of oil in 2028.

Figure 1 - Potential terawatt hours (Statista 2012)

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1,149,927 million km2 creates an energy potential of approx. 70,000,000GW per year (figure 1), which is

enough to cover half of the world energy consumption on approx. 150,000,000GW in 2013 (IEA, homepage).5

KSAs domestic unsolved energy shortage lead by a growing population and a raising energy consumption in

combination with its high solar irradiation, many solar hours, large untouched areas and a the willingness to

invest a tremendously amount of capital in solar energy, makes KSA a particularly interesting nation under

the consideration PV diffusion and domestic adoption. However, KSAs extreme low convention electricity

prices at USD 0.03/kWh is one of many barriers KSA is facing for the adoption PV energy (Bloomberg New

Energy Finance).6 Ironically, the conventional energy is subsidized by the KSA government, which mean that

the real price is approx. USD 0.15-0.20/kWh (figure 2). In 2013, KSA was among the 20 best countries of

doing business in the world (number 11 in 2012). (Royal Danish Embassy, Interview). However, interviewed

domestic and foreign PV companies along the PV value chain remain in a waiting and wondering position,

ready for the departure stage of the KSA solar adventure (figure 10)(Solaria Energia; Spire Solar;

SolarWorld; EnergyGlow, Interviews).

In my time in KSA (August 2012 February 2013) as a Commercial Trainee at the Royal Danish Embassy, I got

an impression that the Saudi citizens doubted that the solar plan would become a implemented reality, as

KSA did not sustain the necessary capabilities to develop the success criteria. This general lack of belief made

me wonder - where is KSA in the Technology Adoption Life Cycle (TALC) (figure 7)? What is actual demand

for PV energy? How could KSAs successfully PV model be realized, and which challenges and barriers have to

be identified and penetrated? The answers were few, and so I decided to begin my thesis journey to

investigate and illuminate the past, present and prospective PV challenges and opportunities.

5 510.551 quadrillion BTU = 149,627,728GW 6 Compared to Denmarks USD 0.38/kWh, Germanys USD 0.34/kWh, Japans USD 0.19/kWh.

Figure 2 - Burning natural gas to produce electricity costs more than electricity (Kearney, 2008)

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Based on the above wonderings and considerations, this thesis will pursue to answer the following the

Research Question (RQ):

How can the Kingdom of Saudi Arabia utilize the investment in PV knowledge and technology to

help build a sufficient sustainable energy development for the future needs - and thereby reach

the PV 2032 goal?

I find the RQ highly interesting, relevant and renewable from an MIB-students point of view, as concepts as

knowledge development and innovate technology diffusion are central dynamic objects in a phase of

processing a potential new energy era. The reason why the RQ uses the term help is to avoid implying that

PV knowledge and technological is the only solution for KSA to close the insufficient energy gap.

The below sub-questions is formulated to narrow a clear the direction of the main RQ:

Which state-of-art, standard and novel PV technologies does exist? What are their characteristics, qualities

and limitations? How does the PV technologies fit to particular markets? What are the main barriers for

the PV technology diffusion?

Moreover, what factors enabled some countries to reach a high level PV adoption, and how can KSA

learn from these enablers and barriers to reach the 2032 goal?

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1.3 Readers guide

The 1st step (chapter 1) will present the methodological approach of the theses, illuminating

the qualitative framework, the phenomenology approach and the field of research (Grounded

Theory). The chapter will hence connect the theoretical lens with empirical data and frame it

in an inductive and deductive hermeneutical knowledge process. The 2nd step (chapter 2)

intents is to set the theoretical frame, allowing the thesis to connect the evidence (induction)

to a guided determined voyager (deduction). The theoretical frame will hence finalizes with a

contribution the self-made The Tangible Technology Triangulation (4T-model) that will

provide with a clear direction and coherency of concepts, that will shape the analysis (chapter

(4). The 3rd step (chapter 3) is a divided block, consisting of chapter; 3.1, 3.2, 3.3, 3.4 presented

is following; Chapter 3.1 presents with a PV technology perspective, and provides with an

overview of the existing state-of-art, standard and novel PV technology. Chapter 3.2

provides a brief overview of adoption rate and PV price/watt, through a perspective of

the beginning, present and a forecast prediction.

The aim is to comprehend the link between adoption and PV price and to identify for pattern.

Chapter 3.3 will illustrate; USA, Japan, Germany and China from the chronological

perspective. The nations provides with valuable insights into best practices and pitfalls, which

may be applied to the KSA PV deployment and development policy. The respective nations

political effort is illustrated to capture the most essential elements for a high technology

innovation to progress, and to zoom in on the factors that made it possible to break-down of

technology and adoption barriers. The chapter 3.4 gathers three important aspects; Building-

integrated PV (BIPV), PV Environment consequence and the PV Recycling. The 4th step

(chapter 4) focus is to analyze the empirical insights and PV contribution (chapter 3) through

the theoretical framework (chapter 2) of 4T-model, through the circulation of three central

elements; PV technology, PV industry and adoption segments, including policy incentives. The

analytical chapter will hence attempt to answer how a nation may investment in PV technology

and knowledge that will hence prepare the thesis for the 5th step (chapter 5), which develops

a basis for valuable suggestions and recommendations in the concluding section, answering

the RQ. The conclusion will consist of 8 proposals and recommendations that will be outline

and serve a contribution to KSA development, which additionally may be used as a theoretically

framework that evaluates the effects of policy incentive implementation, kick starting any

nation technology innovation within the dynamic maturing circulation of 4T-model.

Figure 3 - Readers guide step-by-step

Introduction

step 1

Methodology section

step 2

Theoretical

framework

step 3.1

The PV Review

step 3.2

The beginning of a new self-sufficient energy era

step 3.3

The PV industry path to prosperity

step 3.4

PV energy of tomorrow

step 4

Analysing the past, present and prediction

step 5

Concluding the Saudi Solar stept

Step 3

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2. Methodology People think focus mean saying YES to the thing you got to focus on. But that not what it means at all. It mean saying no to the hundred other good

ideas - Steve Jobs 7

This chapter (1) presents the methodological approach of the theses, by illuminating the qualitative

framework and describe the connection to the phenomenology approach. The chapter continue by explain

the purpose with the field of research and the connection to theoretical lens to set thesis motion in the

desired direction. The inductive and deductive and the data collection is framed to show the hermeneutical

knowledge process, within a critical view on the credibility of findings.

2.1 Qualitative framework The research is based on qualitative methodology (in contrast to quantitative methodology), indicating the

curiosity to illustrate how something is done, understood, interpreted, perceived or developed (Brinkman,

et al., 2010). The qualitative research methodologies includes approaches such as fieldwork and interviews,

and uses the phenomenology approach as a tool to illuminate previous experience processes; including

interaction, learning and development of a an industry (Brinkman, et al., 2010; Fuglesang L., 2004). The thesis

moves within this qualitative analytical research frame with an aim to suggest or explain why or how

something is happening, e.g. underlying causes of industrial action. An important feature of this type of

research is in locating and identifying the different factors (or variables) involved. (Neville, 2007 s. 2).

To illuminate and understand the phenomena (approach) of the PV industry and technology early, the

achievements of USA, Japan, Germany and China will be presented to contribute with a unique PV experience

of how to engage the barriers at different technology maturity stages within the PV industry - all of which is

relevant to solving the RQ. The thesis moves in a dynamic hermeneutical zone of knowledge circulation

enhancement (interviews or second literature sources), evaluated and used for it purpose.

The red-thread of the thesis is the horizontal chronological time-line from where the past is perceived trough

a structural guidance of the forerunning PV nations experience in developing a successful PV infrastructure.

Learning from the past, looking to the future is the goal within the view of the four national PV development.

By exploring this time horizontal approach, I may spur, connect and elaborate evidence on the concept taken

into consideration. The national, industry and technology maturity may shares a common denominator for

success, which is aimed to be unfolded to illustrate how the PV industry knowledge and technology

improvement may flourish, and by then allowing the thesis to draw valid proposals and recommendations to

guide KSAs PV future direction.

7 Quote 2, homepage

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This thesis field of research relies on Grounded Theory, developing a general theory from the data collected

(Glaser, et al., 1967). The Grounded Theory research allows for the combination of inductive and deductive

approaches in theory building. The characteristic of Grounded Theory is that theory is developed from data

generated by a series of observations and phenomena taking place in the investigated field. These data lead

to the generation of predictions that are tested in further observations, which may confirm the predictions

(or proposals and recommendations) (Saunders, et al., 2012). The constant reference to data in testing and

building theory is what characterizes this approach. The purpose is to compare collected data with selected

concepts and categories in order to develop the theory (Saunders, et al., 2012). The thesis theory is

generated from observation made in the process and an aim to approach the research with no preconceived

ideas about what may be absorbed, discovered and learned (Neville, 2007).

The concepts of knowledge and technology development and transfer of PV adoption in certain nations

are especially situated in a cross-disciplinary field of Management of Innovation and Business Development,

offering a perspective to analyzes the development process from a wide range of incidents that have

occurred across a technology-, industry- and adoption segment level. All of which are conceptually

connected and can be used to explain the history of the PV maturity improvement. This triangulation

approach is funneling a macro scale industry actions to the micro adoption level through the innovation

technology, describing a correlation in a general (Grounded) theory. "In discovering theory, one generates

conceptual categories or their properties from evidence, then the evidence from which the category emerged

is used to illustrate the concept" (Glaser & Strauss, 1967, s. 23). The analytical frame (and hence concluding)

intention is to clarify the factors of a nations investment activity in terms of policy incentives, influencing

the innovation industry level. The correlation phenomena approach used will be outline through the founding

PV nations; USA, Japan, as well as todays leading PV production nations; Germany and China, to illustrate the

implications in a pursuit for sustainable and balanced PV solar Industry.

2.2 The theoretical lens

The theoretical approaches used consist of - Kondratieff and Innovation wave, General Purpose Technology,

Standardization of Technology, Diffusion of Innovation, Technology Adoption Life Cycle and the Chain-Link

Model. The theories is funneling a coherent explanation from a macro level to a micro level of the dynamic

technology maturity process. The Kondratieff and innovation wave view is used to determine what may

foster or hinder Innovation in a society, leading to the general purpose of the innovation. The GTP will

contribute with an understanding of what a technology innovation such as PV technology requires to be

determined as a GTP, through an adopter segment perspective of the TALC theory. This view are disclosing

how a technology may cross the chasm and move on from a small-market segment of exploration phase

lead by technology enthusiast and visionaries (early adopters), to a mass-market segment of acceleration

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phase lead by pragmatist and conservative (early and late majorities) (figure 7 and figure 10). Using the

foundation of TALC I may capture the essential elements to explain the technology transfer and focus on

national Diffusion of Innovation (Rogers, 2003).

2.3 A deductive and inductive approach

The research approach is characterized by being both inductive and deductive. The deductive approach can

be visualized as the initial research was collected and derived from a review of the theoretical literature.

Within this stage an overall direction of thesis is developed, which provides with the basis for the exploratory

interviews. An important element of the deductive approach is the requirement to operationalize the

concepts in order to ensure clarity of definition (Saunders, et al., 2012). The thesis has also taken advantage

of the inductive approach to make a general statement of theory from the empirical observations made.

Within the inductive approach the contextual theoretical relations is visualized trough a heuristic perspective,

which allows to explore and solve the RQ by evaluate the previous experiences (Fuglesang L., 2004). Though

many enlightening up-to-date PV research papers came in handy, a series of qualitative interviews was

gathered to collect a sufficient knowledge-bank that contributes with a unique perspective on the PV

countries, PV companies, PV developments and technology trends and status the KSA (exploration and

waiting position).

The thesis did not use the quantitative method, as frequency and statistical approach, as the phenomena

was not asses to give a satisfying and applicable results within the methodology and theoretical set-up.

Although it could have been interesting and valuable to make several quantitative interviews (and thereby a

statistical approach) with early adopters and early and late majorities in Japan, USA, Germany and China

to spot the particular value-proposition of these segments although the circumstances of adoption most

likely like be different between a e.g. German population and a KSA population. This is also a valuable point

to make, when using the qualitative approach in an analytical frame, as the resembling between two so

distinct cultures and national differences must be taken in consideration.

Figure 4 - Deductive and Inductive approach (Blumberg et. Al., 2003)

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2.4 Data Collection

The thesis has through the process relied on triangulation

of concepts and information gathered, as the use of two

or more independent sources of data or data-collection

methods within one study in order to help ensure that the

data are telling you what you think they are telling you

(Saunders, et al., 2012 s. 683). The data collection went on

throughout the whole process and influenced the focus

and direction along the way. The thesis can be

characterized by a movement back and forth between

theory and data, which has also allowed for supplementary

data in term of interviews to be collected later in the process as new fields of inquiry surfaced. In order to

establish a general understanding of the PV industry and technology, secondary data as books, academic

papers and articles has been attained, with a critical sense to retrieve the most updated and qualified

research. Primary data was collected through a range of qualitative interviews with PV industry experts,

scientist and high-level officers, with many years of experience. Explorative as well as semi-structured

interviews were conducted, which has proven to be highly valuable for knowledge enhancement and allowed

the findings of the study to be confirmed from different data sources and ensured greater validity and

reliability. Furthermore, personally data, knowledge and experience was attained as (previously mention)

the stay in KSA. As the Commercial Trainee, I participated in Embassy meetings, environmental and

construction exhibitions and events, and relevant energy conferences, which offered a first-hand perspective

on the energy-issues related to the KSAs current energy diversification.

After the initial research data (which through a personal process became information and hence pure

knowledge) was gained from the literature, an exploratory approach to the company interviews was chosen

to improve the overall understanding of the identified subject matter. This exploratory approach was

performed to test the initial ideas of PV industry-development through the literature review and move closer

towards the final focus. The interview participants are listed in table 1 and table 2.

Table 1 - Explorative interviews

Name Position Company Nation Location Date

PhD.Karsten Nielsen (KN)

Chief Executive Officer

GreenGo Energy (GGE)

Denmark GreenGo Energy

Head Office Friday, 18th of October 2013

PhD. Martin Aagesen (MA)

Chief Executive Officer

Gasp Solar (GS) Denmark Bio Center

Copenhagen Thursday, 31th of

October 2013

Figure 5 - Triangulation model (Saunders, et al., 2012)

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PhD. Frederik Krebs (FK)

Head Professor Dep. of Energy & organic material

Denmark Technical

University (DTU) Denmark Skype

Monday, 9th of December 2013

The interviews provided with a thorough perspective and an interesting discussion of the benefits and doubts

of the past, present and future PV technology. The triangulation approach was found valuable in the

resembling of the three interviews, which surprisingly enough varied a lot more than expected.8 After an

assessment of the findings from the explorative interviews, a further consideration of the literature, and a

tightening of the research focus, a range of semi-structured interviews were conducted.

Table 2 - Semi-structured interviews

Name Position Company Nation Location Date

Ed Hurley Vice President Spire Solar USA Skype 21th November 2013 and 5th February 2014

Ali El-Hadidi Head of the Commercial Section

Danish Embassy in KSA

Saudi Arabia Skype 7th of January 2014

Eric Olson Director of Business Development

Sol Voltaic AB

Sweden Skype 30th of January 2014

Juan F. Gil Engineering and R&D Department Manager

Solar Energia Spain Skype 7th of February 2014

Saleh Al-Khozaim

Marketing Director Energy Glow Saudi Arabia Skype 10th of February 2014

Edwin Koot Chief Executive Officer SolarPlaza Deutch Skype 13th of December 2014

Ali Ghaouti Business Development Manager

SolarWorld Germany Skype 26th February 2014

These semi-structured interviews allowed for a more focused investigation of the RQ. The structure of the

interviews was flexible enough to accommodate an elaboration of any valuable input mentioned outside the

scope of the formal interview-matrix. The series of semi-structured-interviews were conducted with the

ambition to fill up the empty locker of international PV companies a global market functioning level. The

interviews contributed with perspectives from a triangulation-angle: Firstly, the PV companies where chosen

to elaborate on crucial history events within the PV industry and to identify the important issues for the

development high-tech company. Secondly, the solar Dutch energy-organization SolarPlaza CEO Edwin Koot,

was interviewed to illuminate a different perspective on the PV industry development, the encouragement

of solar energy promotion in various nations, as well as to lift the credibility of the analysis. Thirdly, the Head

of the Commercial Sector at the Danish Embassy, Ali El-Hadidi, was interview to perspective some of the

particularities in KSA industry, that may have influence on the technology solar transfer and knowledge in

KSA.

8 Different statements on the preferable PV technology in a hot climate

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Each interview contributed with a unique view of the PV technology, as the interviewees had different

experience drawn from their respective national markets. For this reason, it was important to ask follow-up

questions, as the answer given might not be the one expected and would be more fruitful when following-

up to examine aspects the observer could not have foreseen. The selected interviewees are all positioned in

high-level posts in their respective companies and organizations, which enhances the interviewees reliability,

as they naturally poses a wide-industry knowledge and reflections upon more general considerations

connected to the past, present and future PV. Significant time and resources was devoted to get as many

qualified interviews as possible was made and approx. 70 qualified companies, organizations and scientists

was contacted, repeatedly emailed and called until the hand-in date was reached.

All interviews was recorded and transcribed in order to extract valuable information.9

2.5 Credibility of empirical findings

The collection of qualitative data is an important consideration concerns the credibility of the research

findings in issuing key concerns of reliability, validity and generalizability, when doing a solid research design

(Saunders, et al., 2012).

Reliability of a study refers to the degree that the thesis would yield the same results in other occasions. It

furthermore address to what extent the same observations would be found by other researchers, as the main

challenge within qualitative research can be to freeze a certain social setting to make it accurately replicable

for other researchers (Bryman, 2004). A great concern or threat to the reliability may also originate from

either the participant (interviewee) or the observer. The main threat in relation to the participant is the

degree of bias in their statements, which might be reflect from their role in the organization or an underlying

agenda they are trying to push.10 When guiding the direction of the interview as well as decoding the data,

the threat of bias inevitably introduces a concern in terms of how the answers and statements are

interpreted. As this threat is especially relevant for open-ended questions, which was the primary interview

approach, this naturally constitutes a concern. However, the information gathered through different

methods and a range of various sources, as well as the constant reference to theory, the triangulation as

describes above has sought to mitigate this concern.

Validity in general refers to an assessment of whether research is in fact investigating what it actually sets

out to study (Bryman, 2004). The main concern regards to the qualitative data collection is therefore if the

interviewee understands the questions fully - and responds with the acknowledgment to what the researcher

9 All the interviews fill too much to attached in the printed version of the thesis, and only one interview matrix is in the appendix 8, as an illustration. However, to whom may be interested in the rest of the interviews, please email dennis0sarup@gmail.com and I will gladly send them by email (green agenda: save-the-environment). 10 This risk was apparent in the first three qualitative interviewees, as each interviewee proclaimed somehow to advocate the respective PV technology.

19 | P a g e

is asking. To ensure a high degree of validity the interview participants were well informed in advance of the

focus of both the overall study and the specific interview. The participants received a project outline

description of the thesis as well as a short explanation of idea with the specific interview to ensure the

interviewees recognition of a clear direction of the interview. A short introduction was given before each

interview with the aim of ensuring a correlation between the responses and the focus on the thesis.

Generalizability describes to what extent research is equally applicable to other research settings (Bryman,

2004). This thesis issue of generalizability is stronger than it would have been in a single-case study, due to

the number of nation perspective and the many interviews from various organizations and scientists - though

a larger number of interviews is always preferable to enhance the quality of a research project (Saunders, et

al., 2012). A concern related to the research was the fact that the concept explored in the organizations was

subject to a certain degree of confidentiality. In general, the interview participants were not shy to

communicate about PV market experience. However, the companies were reluctant to disclose any specifics

collaboration with the Saudi government or domestic KSA companies, due to confidentiality arrangement,

which had no immediately effect for the focus the thesis.

Summery remark

The methodology chapter (1) served with illuminating the steps and direction to be taken, including

framework, approaches and field of research, and moreover which data is collected and how they are used.

As a natural leap, the thesis is now ready perspective the next chapter (2) of the theoretical lens.

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3. Theoretical framework It is hard enough to remember my opinions, without also remembering my reasons for them. Friedrich Nietzsche 11

The chapter (2) intent is to set the thesis stage with a theoretical frame, which will allow to connect the

evidence (induction) to a guided determined voyager (deduction). The ambition is to supply the thesis with

relevant theoretical perspectives that guide and illuminate the incidents and phenomena witness within in

the theories of Kondratieff and Innovation wave, General Purpose Technology, Standardization of

Technology, Diffusion of Innovation, Technology Adoption Life Cycle and the Chain Link Model. Hence, the

theoretical framework will be finalize with the contribution of 4T-model that will provide with a direction

and coherency of concepts that will shape the analysis (chapter 4).

3.1 The Economics of Industrial Innovation

Economics of Industrial Innovation are

shaped by an important incident in a

societal context. Technology cycles shaping

the future may also be titled as Kondratieff

Waves or Waves of Innovation

(Kondratieff, 1925; Hargroves, et al., 2005).

The impact of PV technology may at first not

show its true colors with massive economic

fluctuations, although the historic course of

events may or may not provide evidence for

PV technology to be linked to the growth cycle of

connecting new industries and technologies. In order for a Wave of Innovation to occur there needs to be a

significant array of relatively new and emerging technologies, and a recognized genuine customer demand

in the market, which may stay unidentified until the product is developed, lunched and produced (Hargroves,

et al., 2005). The demand includes efficient appliances and resource saving fittings that PV solar energy may

provide. The sixth Wave of Innovation is identified as the Wave of Need, as there is an urgent demand to

prevent further pollution, climate change, ecosystem decline and foremost energy shortage.

A nation may foster or hinder entrepreneurial ideas and innovational diffusion by accessing the necessary

venture capital or supplying with a proper education needed to develop, produce and sell innovations

11 Quote 3, homepage

Figure 6 - Waves of Innovation (Hargroves et al. 2005)

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(Freeman, et al., 1997). Furthermore, there are a series of national institutional and regulatory barriers,

influencing business productivity, innovation development and innovation diffusion. Realizing this generates

a significant source of potential productivity for companies and societal growth (Hargroves, et al., 2005).

3.2 General Purpose Technology

GPT provides with an explanation of how to analyze the close link between economic growth and the

innovative application. A second purpose lies in the microeconomics of technical change and continuous

progress between different types of innovation. A third contribution is the macro and micro perspective in

order to comprehend an understanding of the linkages between the aggregate economic growth that PV

technology contributes in coherency relation with the policy incentives structured (Bresnahan, 2010). The

basic definition of a GPT is separate in three parts; 1) widely used; 2) capable of ongoing technical

improvement; and 3) enables innovation in application sectors (Helpman, et al., 1998). The combination of

assumptions (2) and (3) is called Innovational Complementarities (Bresnahan, 2010; Trajtenberg, et al.,

1995).12 The complication arrives due to uncertainty and asymmetric information, which destabilizes the

current market and makes coordination difficult. In the time of impact the GTP generate uncertainty, making

it difficult to coordinate and provide adequate innovation incentives to the GPT and application sectors

(Trajtenberg, et al., 1995).

There exist a factor of innovation production timing in a society purpose context, which is influencing the

pace of innovation diffusion, usability and application opportunities for the innovation. PV as an innovation

is only commercially relevant when other application needs it purpose (on e.g. a satellite). The timing and

the correlation have important implications for the social return and for the future role of GPTs in long-term

swings in productivity growth (Bresnahan, 2010).

3.3 Standardization in technology-based markets

In contrary to disruptive innovations with unbalanced heterogeneity market, Tassey (2000) develops a

concept of standardization in technology-based market. This concept may assist by giving an explanation to

how and why standardization of innovations occurs and influence the adoption.

The concept of Standardization arrives from the complexity of modern technology and represents a

codification of innovational products. Moreover, standardization has a significant effect on innovation,

productivity, and the market structure (Tassey, 2000). The codified elements in an innovation has become

standardized commoditizes (for companies or adoptors), which raise the industry competition. The

standardized product then becomes increasingly based on price and service-related aspects (and not based

on niche-factor). This evolutionary pattern was noted by the Austrian economist Joseph Schumpeter, who

observed that the essential dynamics of capitalism is assuring that the silk stockings initially purchased

12 The PV technology contains all three criteria to be defined as a GPT.

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only by the rich would eventually be items of mass consumption (Tassey, 2000 s. 592). The standardization

have important effects on the achievement of economic growth objectives, as it do lower the uncertainty

barrier. A strategy of selling codified elements or products to markets or nations is characterized by

proprietary turnkey systems, which requires a high degree of product segmentation.

Governmental policy innovation progress tools consists of R&D facilities, research projects and industry

development, leading to technology development and economic standardization techniques. Government

R&D can establish and demonstrate a backbone infrastructure, which promotes private-sector R&D

investment in standards to allow effective use of industry-infrastructure (Tassey, 2000). The standardization

effect a significant contribution for the barrier of adopter segment, which will be visualized in below.

3.4 Crossing the chasm to the critical citizens

A diffusion of Innovations centers not only on awareness-knowledge, but also on attitude change, decision-

making, and implementation and transition of product innovation, as the word-of-mouth diffusion may be

positive or negative information (Rogers, 2003). A main dependent variable is innovativeness, expressing a

degree to which some individuals are faster to adopt than others. Figure 7 illustrates distinct adopters of

markets, which each represent a unique psychographic profile. Understanding each profile and its

relationship to its neighbors is a critical component of high-tech marketing wisdom (More, 1991).

The way a company may move to one market to another is by breaking the TALC model up in market

segments. In this effort, companies must use segment as a reference-base to capturing the next following

segment, representing a new market challenge of penetration. Between the two segments, visionaries (early

adopters) and pragmatist (early majority) has been introduced a gap, which symbolizes the separation two

group containing different acceptance on a new innovation.

Figure 7 - Technology Adoption Life Cycle (More, 1991)

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3.1.1 The Technology Adoption Life Cycle adopter segments

The first market segment; technology enthusiast are providing with technical topics, and are the first to

appreciate the architecture of the high technology product. Second, is the visionaries, who are best known

for tolerant price-sensitivity and innovativeness, which is be connected to the high social status and general

openness to change, having a high impact on the overall diffusion process. The third and most relevant

segment is pragmatists (early majority), who have a tendency to focus on the standardization and is more

sensitive the innovation uncertainty, which may be limited by enhancing the information and knowledge

level. Thereby the innovation abstraction level is codify, simplifying the product (Seba, 2012; Rogers, 2003).

Pragmatists care about the company reputation, the quality of the product, the infrastructure of supporting

products and system interfaces, and the reliability of the service they are going to get (More, 1991 s. 32) and

are loyal with the anticipation to use this particular high technology product for a long time. For this reason,

the return for building relationships of trust are worth the effort, as they also encourage an innovation by

providing interconnectedness between individuals in the social system.

Once a product entered the mainstream market, it has a tendency to open horizontally and new market

development will support with complementary product and service (Seba, 2012). For this reason pragmatists

accepts only proven market product Innovation and company leaders, as they know that third parties will

design supporting products around a market-leading product. The fourth segment, conservatives (late

majority) are against discontinuous innovations, as they believe in tradition rather than progress, and is often

doubtful towards new ideas. Late majority have enormous value to high-tech industry as they extend the

market for high-tech components that are no longer state-of-art. The fifth segmentation, the skeptics, does

not participate in the high-tech marketplace, except to block purchases.

3.1.2 Partnership and tactical alliances

Partnerships are a connection of interrelated interests interoperating to create value, generating self-

reinforcing market. Tactical alliances have one and only one purpose: to accelerate the formation of whole

product infrastructure within a specific target market segment (More, 1991 s. 93). The commitment is to co-

develop a whole product and ensure adopter satisfaction, opening new sales opportunities. Tactical alliances

between different sectors may cross knowledge banks and speed-up the development progression of the

whole product infrastructure. This drives the customers compelling reason to buy and despite of the overall

high-risk nature of the transition chasm period, any company that executes a whole product strategy

competently has a high probability of mainstream market success (More, 1991 s. 96).

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3.1.3 Competition in the market

Competition is central factor, as the pragmatists reflect, resemble

and compare products and companies in an arbitrary utility

function. Competition hereby becomes a fundamental condition

for the innovation adoption. The perceived market value chain

changes over time, representing a transition from product-

technology based values to market-companies based values. The

transition from product to market is signify that pragmatists are

more interested in the markets response to a product than in the

product itself (More, 1991).

3.5 Chain-Link model

An enhanced view of innovation path is assessable, when

comprehending that the linkage to innovation steps lies

along with development process. The model contains five

major path activities of innovation processes. The path back

and forth motion indicates that an innovation adoption is

not a linier curve, but will be meet by an order of adopter

resistance, as the innovational technology manifest a

disruptive and unbalance market situation (Kline, et al.,

1986). Policy incentives as R&D, manufacturing and deployment are defined as Market pull versus

technology push (R&D) are in this sense artificial, since each market need entering the innovation cycle leads

in time to a new design, and every successful new design, in time, leads to a new market condition (Kline, et

al., 1986 s. 290).

3.6 The Tangible Technology Triangulation model From the above theory-outline, I have developed 4T-model, which contributes with the possibility to position

any random nation within the context of the innovation of diffusion line and analyze the particular nation

within the concepts of (PV) technology, (PV) industry and (PV) adoption, with the policy incentives in the

middle.

The dynamic technology innovational development and adoption of a technology can be visualized in the

experimentation, learning-by-doing and mass-production stages. The shift to a later innovation (as PV solar

energy) does require the process of time for the technology, industry and adoption circulation to develop

and mature. This dynamic progress is characterized within the 4T-model, below at figure 10.

Figure 8 - Competitive-Positioning Compass (More, 1991)

Figure 9 Chain-Link Model (Kline, et al., 1986)

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Figure 10 - The Tangible Technology Triangulation model

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The Exploration' phase is where the technology enthusiasts will buy an untested and expensive technology

(PV system, not even close to the grid-parity). Elaboration of improvement by continued R&D in the initial

stage is required to develop new technological variations and applications. The Departure phase is

dominated by the environmental visionary ideologist. The interrupting technology begins to influence the

(conventional system) existing market, and slowly transfer from a niche market to rooting in society with the

increasing intrinsic innovation market competition. The Acceleration phase is driven by the technology that

through the success in the two previous stages has obtained a momentum of standardization and maturity.

The market has crossed some essential barriers and now reached a wider audience of the early majority. In

the Stabilization stage, the technology has been totally accepted, as main dominating companies has

concurred and large-size the market, making the technology reliable as is has been tested and is public visible.

The system is replaced by a market balance and adopter trust

It is simplified model of the dynamic development process that an innovation is going through to reach

a market and technology maturity, and ultimately a mass-adoption. The purpose with an innovation is

to replace the existing market (or conquer the untouched market) by fulfilling the demand or desire of

the adopters segments; enthusiasts, visionaries, pragmatists, conservatives and laggards. To get the

market (and adoption) wheels spinning, a certain injection of governmental policy incentives may be

necessary to generate a dynamic growth of the interrelated concepts. The model-frame contributes the

analysis (chapter 4) within the triangulation of the concepts mentioned.

Summery remark

The chapter (2) provided with the theoretical lens, capturing and framing the empirical incidents and

phenomena within a macro and micro level. The final part of theoretical framework connects the dots

in the theories by culminating and contributing with a coherency of concepts in (own made) model.

This model shapes the overall direction of circulation between adoption, technology and industry that

will be used as three top elements in the analysis. The thesis is now prepared to perspective the next

step, consisting of existing PV technologies.

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4. The PV review If there is a dream solar technology it is probably PVs They have no moving parts and are consequently quiet, extremely reliable, and easy to

operate. - Allan L. Hammond 13

This chapter (3.1) presents the basics of a how a PV system functions, and will hence provide with an overview

of the existing state-of-art, standard and novel PV

technologies PV technology with the aim of

analyzing the most preferable PV technology to KSA.

A PV technology table (3) is presenting a general PV

technology overview.

The basic principle behind the solar panel technology

is PV Effect (photo = light, voltaic = electricity), which is the conversion of sunlight radiation into electrical

energy. When photons of sunlight strike the cell, electrons are knocked free from the atoms on the used

material and are drawn off by a grid of metal semiconductors.14 (Sherwani, et al., 2009). Figure 11 illustrates

the steps of how solar irradiation is transferred into usable electricity.

4.1 State-of-art, standard and novel PV technologies (Summery)

There are a numerous types of PV technology application, from low efficiency at low-cost rates, to high-

efficiency at higher cost rates. PV technology types differs in weight, flexibility, efficiency, life time (quality)

and price (IEA, 2010). Various types of PV technology have increased the last decade as the surging global

solar demand has been fueled by falling prices. Distinct PV stages of maturity has emerged through the

continued R&D and industrialization, leading to technologies as multi-junction, crystalline silicon (c-Si),

concentrating PV (CPV), organic solar and nanowire solar (IEA, 2010). Each PV technology have a specific

commercial market attached, due to the price and efficiency variation as well as physical adaptability.

Extreme temperature show to have a negative effect on 5 % on PV thin-film, and 8-9% PV c-Si (appendix 1.2)

For a more detail PV technology perspective and general information, please see appendix 1, however, a

summery and an evaluation of each PV in presented.

13 Quote 4, homepage 14 Semiconductors as gallium arsenide, Indium gallium phosphide, tellurium, silicon etc.

Figure 11 - Illustration of PV system energy generation

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Table 3 - PV technology overview

The PV multi-junction technology produces the highest efficiency Standard Test Condition (STC) 44.4% and

is the most costly per watt. The commercial market is primary motivated by adopters that need a high

efficiency on a limited area, no matter the costs - as e.g. in military equipment or space-satellites (Brown, et

al., 2009). However, the multi-junction material is used in CPV technology. The CPV technology may have a

promising future, due to the high-efficiency output. However, the technology does not have a 30-year history

as PV c-Si, which create an uncertainty-risk for large solar-investors. The high efficient cell is exposed to the

concentrates of 100 to 300 times the suns radiation, due the mirrors. The main-disadvantage is it

sensitiveness to irradiation interruption due to the use of multi-junction technology (Gasp Solar, Interview).

15 Soitech, report 16 Soitech and Irena, report

PV technology

Module efficiency in%

Module efficiency (STC) in%

USD /watt USD/kWh price in KSA15

Surface area: 1kWp

Advantage Disadvantage

Triple Multi-Junction

30% 44.4% USD 150

250 -

4 m2

- Best efficient on the market. - Highly robust - state-of-art technology

- Highly expensive. - Bottleeffect

Concentrating PV 16

20-25% - - USD 0.22 (tracker)

- - Less semiconduter material - High efficiecy

- No long tract record - Cloud and dust sensitive

PV Nanowire

30-35% (expected)

13.3% USD 10-15 - 5 m2 - High efficiency. - Low use of semi-conducter material

- High production cost - New and non-market tested

Mono-crystalline

Silicon 16 20% 25% USD 0.9

USD 0.26 (tracker)

7 9 m2

- Bedst efficiency for the basic consumer - Easily availeble - Highly Standidized

- Use more silicon then poly silicon - Less intolerent in hot climate

Poly Crystalline

Silicon 14 19% 20.4%

USD 0.9

USD 0.27 8 9 m2

- Less silicon use, time and energy for production - Highly Standidized

- marginal less efficient then m-Si

Thin-film CIS

7 12%

20.4%

-

USD 0.25 9 15

m2

- marginal better performance in hot climate - Less expensive

- Use more area (1kWh) then c-Si

Thin-film CdTe

8 12% _

USD 0.74

-

10 11 m2

- Less expensive - Best thin-film cost-cutting

- Use more area (1kWh) then c-Si

Thin-film a-Si

7 9% _

USD 0.62

- 15 18

m2 - Less expensive - Less silicon use

- Use twice the area (1kWh) then c-Si

PV organic 2 4% 11.1 % - USD

0.20-25 49 63

m2

- Best price 1kWh - Very fast production - Easy to recycle

- Use 6-8 more area pr. 1kWh then c-Si. - Less life time

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The PV crystalline-structure use silicon as a semiconductor material and is separated in two main-categories:

mono and poly-crystalline. The notable difference is that mono-crystalline is cut from a single crystal of

silicon, where poly-c-Si cells are cutting and sliced from a block of silicon, made into wafers (Chaar, et al.,

2011; IEA, 2012). C-Si PV is the oldest and the dominating PV technology, representing approx. 85% of the

commercial market (Irena 2013; IEA roadmap 2010, report). The Mono-crystalline modules have a higher

commercial efficiency of approx. 15-20% depending of the module and material (IEA, 2012). The maximum

efficiency of mono-c-Si solar cell has reached was 24.7% under STC (Chaar, et al., 2011). PV poly-crystalline

technology is commercially the best alternative when measuring in the parameters of price/efficiency. The

crystalline technology does fit the large commercial rooftop market, when looking at the factors: cost and

limited area (Gasp Solar, Interview).

The thin-film technology is characterized by the reduced cost of the active material, but with a markedly

lower efficiency. Thin-film reduces the quantity of material and manufacturing cost without jeopardizing the

cells lifetime. A great thin-film advantage is the flexibility of the PV modules, which has resulted in a non-

existing market in 2000 at 18-20% in 2012, reduced to 5-9% in 2013 (Chaar, et al., 2011; Cern, et al., 2013).17

Thin-film is not recommended to put on the rooftop, as they do not deliver a satisfied energy production,

which also is a disadvantage in thin-film technology.

PV organic cells are a novel innovation of thin-films that consists of organic semiconductors such as polymers.

The highest efficiency achieved is approx. 12% (STC), but in real life the polymer cell have approx. 2-4%

efficiency (DTU, Interview). The organic PV technology is actually cheaper in price/efficiency (kilowatt)

compared to mono and poly-crystalline, but do requires 6-8 times more surface area. Due to the low-

efficiency and extensive surface requirements, the PV organic technology is not rooted in any commercial

market yet.

PV nanowire solar is a relatively new discovery in the PV technology. PV nanowire may utilize the irradiation

up to 15 times of the normal sun intensity, which is remarkable as it opens a potential for developing a new

type of high-efficient solar cell (Solardaily, article). With the reduced material prices and an estimated effect

on 30-35% (using Silicon as semiconductor), the PV nanowire prices is expected to be USD 10-15/watt.

However, PV nanotechnology is still far more expensive than PV c-Si at a price on USD 0.9 watt. The market

for the new improved PV nanowire would be in the category of high-efficiency small solar modules like mobile

17 With an expected market of USD 320 million, compared to approx. 1 billion investment in 2012

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charger or for military use. Figure 12 illustrates the research-labs and innovating companies ongoing

development in improving the PV technology efficiency.

Summery remark

The chapter (3.1) enhances with a understanding of the pros and cons, performance, development and

provided with an general overview of the existing state-of-art, standard and novel PV technologies. The

thesis is hence to clear perspective the phenomena of PV past and present Global adoption.

Figure 12 - PV technology efficiency records (NREL Efficiency, homepage)

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5. The beginning of a new self-sufficient energy era Petroleum springs and coal mines are not inexhaustible but are rapidly diminishing in many places. Will man, then, return to the power of water

and wind? Or will he emigrate where the most powerful source of heat sends

its rays to all? - Augustine Mouchot (in 1873) 18

This chapter (3.2) provides with a brief overview of adoption rate and PV price/watt, starting with the very

beginning, to present time and ending with a forecast prediction. The aim is to comprehend the link between

adoption and PV price and to identify for pattern. Moreover, it will enhance the knowledge of the connection

between sun irradiation level and the kWh produced, leading to possible grid-parity.

The French physicist Edmond Becquerel discovered the PV innovation in the year 1839, observing a battery

voltage increase as the sunlight hit a silver plate (Bahrami, et al., 2012; Singh, 2013). The PV technology took

the next step in 1878, as the French mathematician August Mouchet invented a solar-powered steam engine

using parabolic dish collectors. A reinvention of the solar technology followed after the Second World War,

with the development of the first solid PV solar cell silicon with an efficiency of 6% (Chaara, et al., 2011). The

solar PV industry value chain came to consist of several stages illustrated in figure 13.

Figure 13 PV value chain (Deloitte, homepage)

5.1 Present PV solar installation PV solar energy technology is one of many renewable energy methods available.19 Since 2000, PV production

has become the number one renewable technology, increasing more than 125 fold, with annual growth rates

between 40% and 80% the last decade (Chowdhury, et al., 2014; IEA-Technology, 2010). The worlds

cumulative installed (not production) PV capacity was approx. 24GW in 2009, 40.7GW in 2010, 71.1GW in

2011 and by 2012 the PV energy technology reach the golden mark of 100GW globally, which corresponds

to 16 coal power plants or nuclear reactors of 1GW (24hour production) (EPIA, report). An amount capable

of producing at least 110 TWh (110 billion kWh) of electricity, equivalent to approx. 0.5% of the world

annually electricity demand, which is enough energy to cover the annual power supply of over 30 million

European houses (EPIA, 2012; IEA PVPS, 2013).20+ Early 2014, the PV installation is on a worldwide level of

approx. 135GW (figure 14)(European commission, report).

18 Quote 5, homepage 19 Renewable energy is produced from solar, wind, water, hydropower, biomass, geothermal, biofuels and hydrogen. Renewable nations; Iceland 100%, Norway 98%, Brazil 86%, Austria 62%, New Zealand 65%, and Sweden 54%. 20 110 TWh represent 2.6% of Europe electricity demand in 2012 and saves approx. 53 million tons of CO2 annually.

Silicon WaferCell or thin-

filmModule

PV Manufactor

Distributor Installer Adopter

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Figure 14 Accumulated and annual global PV installation; 2004 2014 (appendix 7, 4)

5.2 PV projections

The International Energy Agency (IEA) estimates that 5% of total global electricity consumption will be

delivered by PV solar systems by 2030 and anticipate this to increase to 11% in 2050 - corresponding to

3000GW of cumulative installed PV capacity, equivalent to 4.500TWh (IEA, 2010). To reach this astonishing

target the successful achievement is a dynamic set of technical, policy, legal, financial, market and

organizational requirements identified by the stakeholders involved in its development. (IEA, 2010 s. 5).21

The history has lead PV solar through a price-reduction process. The prices per watt or kWh have declined

rapidly the last three decades, which has led to grid-parity in 19 nations (IEA PVPS, 2013; Business Insider,

article).

21 The political incentive schemes has to be sustained, effective and adaptive to build the necessary bridge between the PV competitiveness, along with a long-term technology development and innovation focus, which includes novel and existing PV technology

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

MEG

AW

ATT

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Total and annual global installation of all PV energy from 2004 - 2014

Annual PV installation Accumulated PV installation

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The PV price has witness a rapid decline through the past three decades, which will be put into perspective

later. In January 2014 the average PV c-Si prices hit the lowest price ever on approx. USD 0.9/watt (figure

15), making PV module closer to grid-parity around the world. Due to a strong demand for PV technology

innovation in key markets, forecasts are implying that prices will further decline. The Deutsche Bank believes

that solar energy is likely to witness a transition from subsidized to sustainable in 2014-2015 (Solarfeeds,

article). Both Germany and China have officially stated that they will cut some of the economic incentives

and leave PV solar industry to run without subsidies (Asia; The Local, article).22

5.3