Project cost for the construction of Solar photovoltaic (PV) power plant

Solar photovoltaic power plant remains the reasons for investors’ interest in renewable energy sources are growing concerns about climate change, the effects of air pollution on health, the issue of energy security and affordability, as well as fluctuations in hydrocarbon prices.

Currently, the total installed capacity of PV power stations in the world exceeds 600 GW, excluding concentrating solar systems.

It is the second largest renewable energy source after wind farms.

Since the late 2010s, this technology has been a leader in the pace of construction of new power plants.

These figures are twice as much as that of wind farms.

They are even higher than those of fossil fuel plants and nuclear power plants together.

In the past four years, the installed Solar photovoltaic power plant capacity is planned to be increased by 140 GW.

According to experts from the International Renewable Energy Agency (IRENA), the development of solar energy is driven by cost savings, technological advances and the creation of the necessary associations to support the sector.

Solar photovoltaic power plant construction

According to IRENA forecasts, the number of new solar photovoltaic stations can increase 5 times over the next 10 years, reaching a total capacity of 2840 GW by 2030 and 8500 GW by 2050.

This means that the installed PV capacity in 2050 will be 18 times more than in 2018. According to European experts, in 2050, 60% of the installed capacity will come from large-scale photovoltaic installations, and the remaining 40% from in-roof PV systems.

Asia dominates the global solar energy market today, accounting for more than half of the world’s new photovoltaic capacities.

In 2019, China added over 30 GW of installed capacity, while the European Union added 16 GW and the United States 13.3 GW.

Asian countries, led by China, are currently leading in the production of photovoltaic energy.

Europe is in second place and North America in third.

Projections show that Asia will continue to lead in installed PV capacity with a share of about 65% of total capacity in 2030. The most significant growth is expected in China, where the installed PV capacity will exceed 1,400 GW in 2030.

North America will take second place with 430 GW by 2030, with 90% of the facilities being built in the United States. Europe will occupy third place with an installed capacity of about 300 GW.

In 2050, Asia will still dominate with almost half of the installed photovoltaic power in the world. According to the estimates, this figure will be 4,800 GW, of which 2,800 GW will be concentrated in China. By then, Chinese solar power will show CAGR of about 9%.

Europe will retain third place with a total installed Solar photovoltaic power plant capacity of 890 GW in 2050. About 22% of European PV installations will be concentrated in Germany.

At the same time, market growth is likely to shift to other, less saturated markets. In the future, the rapid development of solar energy is expected in South America and Africa.

The future growth of solar energy depends largely on a balanced energy policy and a reduction in the cost of PV technology. The ways to achieve this are to use cheaper materials for solar cells, reduce the cost of manufacturing equipment and increase its efficiency.

Construction of solar PV power plants: economic feasibility and cost

Solar energy has been controversial in past decades, but today it is clear that solar power plants will soon replace traditional energy sources.

The widespread use of the technology depends on its current cost-effectiveness. Solar energy today cannot always compete with traditional sources. But the long-term trend is that fossil fuels will rise in price, and solar cells and ancillary electrical equipment will become cheaper.

According to BloombergNEF, in 2020 the cost of renewable energy has dropped significantly around the world.

The levelized cost of energy (LCOE) for large-scale photovoltaic systems has decreased by 4% compared to the second half of 2019 – to € 46 per MWh. Meanwhile, the base LCOE for batteries fell to € 138 / MWh, having fallen in price by 2 times over the past year.

In China, the largest solar market, solar LCOE has dropped to € 35 / MWh thanks to the introduction of more efficient PV cells. This is almost 9% less than in the second half of 2019. The cost of operating new solar power plants in the country is now almost equal to the cost of operating coal-fired power plants, at around € 32 / MWh.

According to BNEF reports, the cheapest Solar photovoltaic power plant projects financed in the first six months of 2020 should reach LCOE in the range of 21-27 € / MWh.

These projects in Australia, China, Chile and the United States will compete with the remaining fossil fuel power plants.

Meanwhile, Abu Dhabi-based EWEC has unveiled the results of the latest solar energy tender in the UAE for a 2 GW solar photovoltaic project. The operator plans to supply energy at a price of only € 12.46 / Mwh.

Solar power plants have a number of advantages over coal-fired TPPs and nuclear power plants:

• The construction of a solar power plant is much faster as the photovoltaic modules are easy to install and connect.

• It is easier for engineering companies to choose the location of the solar power plant in accordance with the infrastructure and terrain features.

• The construction of solar power plants in remote areas reduces the energy losses associated with long-distance transmission.

• Unlike traditional power plants, modular solar energy production can be smoothly expanded as consumption increases.

Solar power plants do not pollute air and water, maintaining an ecological balance. For this reason, solar energy production is stimulated by government initiatives in most developed countries.

Today, there is no longer any doubt about the economic feasibility of building solar power plants.

The time will come when solar energy will completely displace coal and gas from the energy sector.

Construction of solar power plants for industrial enterprises

Industrial enterprises are among the largest consumers of electricity in the world energy market. 

The huge number of equipment and machines requiring power, as well as the accompanying office premises of industrial companies determine the need for an uninterrupted and reliable power supply.

With the awareness of the negative impact of traditional energy sources on the environment, more and more enterprises are switching to renewable energy sources. The challenge is to reduce the carbon footprint at every stage of the manufacturing process.

Many companies, especially in the automotive and electronics sectors, are choosing solar power plants as the optimal technology for generating clean energy.

Industrial facilities use large amounts of energy in a wide variety of processes, which are usually designed for maximum intensity.

The annual electricity consumption for the average US enterprise, for example, is 95.1 kWh per 0.09 m², which is at least 10 times the annual consumption of a typical household. Most of the energy consumed in factories is used in the form of heat, with the remaining about 20% in the form of electricity.

According to the latest research, this ratio is changing. In the 1980s, factories used 25-50% less electricity than they do now. Experts predict that by 2030 the share of electricity in the energy consumption of industrial enterprises will reach 30%.

The electrification of industry not only opens up many opportunities, but also poses new challenges for business. An example is companies that make full use of the electricity generated by coal-fired power plants.

These producers contribute to the problem of greenhouse gas emissions, which, in turn, leads to increased energy costs due to additional environmental taxes. Renewable energy sources minimize these problems. Several studies have shown that the use of solar energy can lead to significant savings in energy costs for manufacturers.

As with many other technologies, the efficiency of solar power plants increases as the scale of construction increases. In 2019, the cost of building a solar PV system for small consumers was US $ 3 per watt. However, this figure drops to $ 1 per watt when it comes to systems with an installed capacity of more than 1 MW.

Compared to coal, solar power is a clear winner because modern technology makes it possible to produce energy cheaper every year.

EPC contracting in solar energy