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List of Tables
Table 1. PV tariffs for 2012 in Germany ... 24
Table 2. PV tariffs for 2011 and 2012 in the United Kingdom ... 25
Table 3. PV tariffs for 2012 in Italy ... 26
Table 4. PV tariffs for 2011 and 2012 in Lithuania ... 32
Table 5. PV tariffs for 3rd and 2nd quarter of 2013 in Lithuania ... 34
Table 6. Assessment of RES-E policies and measures: Lithuania vs. Germany ... 45
Table 7. PV tariffs of Lithuania and Germany ... 48
List of Figures
Fig 1. Estimate of renewable energy growth for the EU, 2006-2030, GWh ... 19
Fig 2. Evolution of European new grid-connected PV capacities ... 22
Fig 3. Renewable energy country attractiveness index scores and rankings at May 2013 ... 27
Fig 4. Technology-specific indices and ranking of the countries ... 28
Fig 5. Direct payments to producers of electricity from renewable energy sources for electricity
supplied to the grid in years 2005-2012 in millions of Litas (1 Litas = 0.289626196 Euros) ... 31
Fig 6. Forecast of power generation from renewable energies in Lithuania ... 36
Fig 7. Ease of doing business in Lithuania 2013 (ranks out of 185 economies) ... 37
Fig 8. The impact of EEG revision on PV electricity production (in GWh) ... 40
Fig 9. PV on the path to becoming a key pillar of a sustainable energy supply in Germany ... 41
Fig 10. CO2 Savings through PV systems ... 42
Fig 11. Most recent PV tariffs in Germany ... 42
Fig 12. Ease of doing business in Germany 2013 (ranks out of 185 economies) ... 44
Fig 13. Lithuania and comparator economies ranked by ease of doing business ... 46
Fig 14. Lithuania and comparator economies ranked by ease of starting a business ... 47
9
List of Abbreviations
ct - cent
EEG - Erneuerbare Energien Gesetz (eng. Renewable Energy Law)
Etc. - et cetera (and others)
EU - European Union
GDP - Gross domestic product
GW - Gigawatt
GWh - Gigawatt-hour
Ibid - ibidem (the same place)
kW - Kilowatt
kWh - Kilowatt-hour
Lt - Litas
MW - Megawatt
MWh - Megawatt-hour
NREAP - National Renewable Energy Action Plan
PV - Photovoltaic(s)
UK - United Kingdom
US - United States
US$ - United States Dollar(s)
W - Watt(s)
10
INTRODUCTION
Due to the renewable energies nowadays being of a great relevance in the European Union
and recent solar energy sector issues in Lithuania and its relevance to investors and the country, the
aim of this study is to create a model that would suggest the measures, actions, improvements for
the solar energy sector of Lithuania in order to promote a better development of the sector and
achieve more effective results, improve the current situation and future prospects of the solar energy
sector in Lithuania and increase the attractiveness of investing in it.
The model is planned to be based on existing examples of one of the countries of the Euro-
pean Union or on a model created by combining the best features of several models that are proven
to be successful in one or several countries of the European Union adjusting it to be eligible for
solar energy sector of Lithuania. In order to create the model in this study it is foreseen to make an
overview of several European Union countries analysing the more relevant to this topic aspects and
futures, while intending to compare the information and come to the conclusions, which of the
countries has a better or the best system of the solar energy sector, that could be used as an example
for the development model for this sector in Lithuania.
This study consists of the three main parts:
1) the overview of the literature on the relevance of the topic covering the overview of the
most advanced solar energy sectors of the European Union as well as the importance of the field in
the region and in general;
2) the analysis of the important and the most relevant to the topic aspects in the research
covering the overview of Lithuania and Germany;
3) the practical part with a description of a created model for the better development of the
solar energy sector of Lithuania that consists of the main ideas and suggestions for Lithuania how to
increase the attractiveness of the sector for investors.
The aim of the study: analysis of the solar energy sector of Lithuania with the goal of
screening out the main issues and finding the aspects with the need of improvement as well as
conducting the research in order to find the best example of successfully functioning solar energy
sector in the European Union to have a reasoned basis for following suggestions to improve solar
energy sector development in Lithuania.
11
Tasks of the study:
Make an overview and analysis of the scientific literature and other sources relevant
to the topic of the study and structure the most relevant and important findings;
Make a research in order to screen out the most advanced solar energy sector in the
European Union to use for following examples;
Conduct an analysis of the solar energy sector of Lithuania in order to screen out the
main issues and get a better understanding of the current situation as well as importance and
consequences of the recent changes;
Compare the findings and results of the research and analysis of the chosen countries
and screen out the most important aspects that have the biggest influence on the development of
the solar energy sector and need an improvement for the better functioning of the sector in future
and increase of the solar energy sector attractiveness for investors;
Create a solar energy sector development model for Lithuania consisting of the rea-
sonable suggestions for improvement of the most important aspects in order to increase the at-
tractiveness of the sector for investors as well as the development of the sector in general;
Draw the general conclusions of the analysis, research and the model and come up
with general suggestions concerning the aim and tasks of this study.
Methods of research and analysis:
Analysis of the most relevant scientific and other literature and sources;
Analysis of the most relevant statistical data;
Comparative analysis;
Graphical representation of the relevant information;
Practical calculations, comparisons and evaluations.
Practical use of the study: the research and analysis conducted in the study gives a better
understanding of the relevance of the solar energy and the current situation as well as the im-
portance of the recent changes in the sector in Lithuania. It allows screening out the main aspects of
the sector that require improvement and, while comparing with good examples, come up with ideas
for needed actions and present reasonable suggestions for the improvement of the sector develop-
ment and the ways of increasing the investment attractiveness of the sector. Using the suggested
method might help improving the current situation and create a better future for the sector.
12
1. THE RELEVANCE OF THE SOLAR ENERGY SECTOR
The Solar Energy sector is a part of the Renewable Energy sector. Therefore, to explain the
importance and the relevance of the solar energy sector in the chosen countries of the European
Union, it is essential to define the relevance of the Renewable Energy sector in this region.
Renewable Energy in the European Union is a very relevant subject. It is a high European
Union priority to promote the electricity from renewable energy sources. This is based on several
reasons such as aim of diversification and security of the energy supply as well as the goal to
protect the environment. It is also an important factor in the influence to the social and economic
cohesion.
1
The European Union aims to increase the share of electricity produced from the renewable
energy sources. The main goal is to reach the amount of at least 20% of the final energy consump-
tion provided by renewable energy sources by the year 2020.
2
As a part of the EU climate strategy,
this aim is highly relevant while complying with the commitments on reducing the greenhouse gas
emissions.
3
Starting from the White Paper on the renewable energy sources in 1997, where the EU set
the target of increasing the energy consumption from the renewable energy sources to 12% by the
year 2010, through the years the goal of the EU grew and became 21%, that is set in the "Directive
of the European Parliament and of the Council of 27 September 2001 on the promotion of electrici-
ty from renewable energy sources in the internal electricity market" (Directive 2001/77/EC).
4
The general aims of the Directive were the promotion of an increase of the contribution of
renewable energy sources to electricity production in the domestic market for electricity as well as
the creation of the basis for a future Community foundation in this regard.
5
It concerns electricity
produced from non-fossil renewable energy sources for instance geothermal, tidal, wave, hydroelec-
tric, sewage treatment gas, landfill gas, biomass, biogas, wind and solar energies.
6
1
Europa.eu "Renewable energy: the promotion of electricity from renewable energy sources", 20.01.2011, viewed on
20.06.2013, available online at URL: http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
2
Lehmann Paul / Creutzig Felix / Ehlers Melf-Hinrich / Friedrichsen Nele / Heuson Clemens / Hirth Lion /
Pietzcker Robert "Carbon Lock-Out: Advancing Renewable Energy Policy in Europe", 15.02.2012, p.324
3
Europa.eu "Renewable energy: the promotion of electricity from renewable energy sources", 20.01.2011,
viewed on
20.06.2013
,
available online at URL: http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
4
Europa.eu "Renewable energy: the promotion of electricity from renewable energy sources", 20.01.2011,
viewed on
20.06.2013
,
available online at URL: http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
5
DIRECTIVE 2001/77/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 September
2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market,
Article 1, 2001, p.5, viewed on 23.06.2013, available online at URL:
http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
6
Europa.eu "Renewable energy: the promotion of electricity from renewable energy sources", 20.01.2011,
viewed on
20.06.2013, available online at URL:http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
13
From January 1
st
of the year 2012 the Directive 2001/77/EC is repealed by "DIRECTIVE
2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 April 2009 on
the promotion of the use of energy from renewable sources and amending and subsequently
repealing Directives 2001/77/EC and 2003/30/EC" (Directive 2009/28/EC), which set new, more
relevant, aims and conditions, improving the ones set in the earlier Directive and the Directive that
was created in between of the mentioned two.
7
Directive 2009/28/EC sets a common structure for the promotion and the production of elec-
tricity from renewable energy sources. It is a part of the energy and climate legislation package that
contributes a legislative foundation for Community goals for greenhouse gas emission savings. The
Directive promotes energy efficiency, the improvement of energy supply, energy consumption from
renewable sources and the economic stimulation of a dynamic sector.
8
Directive 2009/28/EC establishes mandatory national goals for the proportion of energy
from renewable sources in transport and for the overall share of energy from renewable sources in
gross final consumption of energy. It sets the rules for: the statistical transfers between European
Union countries; joint projects between its member states and with third countries; information and
training; administrative procedures; guarantees of origin; access to the electricity grid for energy
from renewable sources. The Directive also sets the sustainability criteria for bioliquids and
biofuels.
9
The Member States of the European Union are obliged to apply the provisions of the Di-
rective on producing electricity from renewable energy sources. Each country sets the national
indicative goals for the share of electricity produced from renewable energy sources the result of
which has to meet the required amount. The Member States must, once in the established by the
rules time period, publish reports that set the indicative targets of that particular country for future
consumption of the electricity from renewable energy sources for the following ten years. The
reports must also reveal the measures that are planned for meeting the targets or the measures used
for the results achieved. The targets that every Member State of the EU sets must take account of
the reference values set out in the documents attached to the Directive.
10
7
Europa.eu "Renewable energy: the promotion of electricity from renewable energy sources", 20.01.2011, viewed on
20.06.2013, available online at URL: http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
8
Europa.eu "Renewable energy: Promotion of the use of energy from renewable sources", 09.07.2010, viewed on
22.06.2013, available online at URL: http://europa.eu/legislation_summaries/energy/renewable_energy/en0009_en.htm
9
DIRECTIVE 2009/28/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 April 2009
on the promotion of the use of energy from renewable sources and amending and subsequently repealing
Directives 2001/77/EC and 2003/30/EC, Article 1, 2009, p.11
,
viewed on 23.06.2013, available online at URL:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:140:0016:0062:EN:PDF
10
Europa.eu "Renewable energy: the promotion of electricity from renewable energy sources", 20.01.2011, viewed on
20.06.2013, available online at URL: http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
14
The Directive aims to boost the contribution of the renewable energies when respecting the
principles of the European market. Meanwhile, among the world leaders in development of new
technologies connected with electricity from renewable energy sources are European companies.
11
Concerning the relevance of the renewable energy and its sources it is explainable by its
ability to fulfil all our energy needs, such as, producing electricity, heating houses and running
transport. Based on the type of the renewable energy it can be used in different ways, for example,
wind and hydro types of renewable energy are only used for generating electricity, when geother-
mal, biomass and solar energy is used for producing electricity as well as heat.
12
At this point,
biomass, geothermal and solar energy can be defined and selected out from other renewable
energies as the ones, that are more useful, therefore, more relevant and important.
During the year 2011 the two dominant renewable energy sectors were wind and solar (pho-
tovoltaic). Both of these sectors had record levels of installations: 42GW of wind and 25GW of
solar. In these technologies alone was deployed more than US$100 billion of capital across a
growing number of countries. In the year 2012 solar photovoltaics jumped to the top spot.
13
As a conclusion from what was mentioned above, solar energy appears to be the most rele-
vant part of the renewable energy sector in the EU from 2011-2012 years. Moreover, according to
the data in 2013, solar energy reached more than 100GW of installed capacity through the year
2012. It is more than twice as much as it was two years ago.
14
This shows the growing interest in
the solar energy sector resulting to its relevance and importance in the EU in general as well as in
Lithuania and the other countries that were chosen for this study.
After establishing the relevance of the renewable energies in the European Union and its fu-
ture strategies and singling out the energies that are used for a bigger range of purposes and suitable
for production of more energy products than others, and after looking into the dominant energy
sectors and recent European market tendencies we came to the conclusions of solar energy sector
being the most relevant at the analysed period of time. Solar energy (or in other terms - photovolta-
ics) became a significant part of the EU electricity market while producing 2% of the demand and
around 4% of peak demand in the region. Photovoltaics, for example, in Italy reached 5% of the
electricity demand and over 10% of peak demand. In Germanys' southern federal state Bavaria the
11
Europa.eu "Renewable energy: the promotion of electricity from renewable energy sources", 20.01.2011, viewed on
20.06.2013, available online at URL:http://europa.eu/legislation_summaries/energy/renewable_energy/l27035_en.htm
12
European Commission, "Renewables make the difference", Luxembourg: Publications Office of the European
Union, 2011, p.6, viewed on 23.06.2013, available online at URL:
http://ec.europa.eu/energy/publications/doc/2011_renewable_difference_en.pdf
13
KPMG International Cooperative, Green power 2012: The KPMG renewable energy M&A report, 2012, p.13,
p.29, viewed on 25.06.2013, available online at URL:
http://www.kpmg.com/CZ/cs/IssuesAndInsights/ArticlesPublications/Press-releases/Documents/KPMG-Green-Power-2012.pdf
14
Damian Carrington, Wind and solar power capacity surge, 14 February 2013, viewed on 29.06.2013, available
online at URL: http://www.euractiv.com/energy/wind-power-capacity-grew-20-glob-news-517720
15
capacity of the solar energy installations resulted to 600W per habitant, which is an astonishing
amount. As well as for the other energy sources in the past, for photovoltaics to reach such level of
development policy support was a crucial help.
15
In this chapter it is foreseen to analyse and
describe this sector and its importance more thoroughly.
Firstly, it is important to reveal the reasons of such relevance of the solar energy, in order to
understand its growing demand in the EU and the rest of the World. Some of the main reasons come
from the features of solar energy that allow the absence of the noise, polluting gases or harmful
emissions in the production. Furthermore, solar energy creates the possibility for the diversification
of the energy supply and generates heat as well as electricity. Photovoltaics give an opportunity to
create local jobs while stimulating the economy and the development of new technologies. Also one
of the great features of the solar energy is its inexhaustibility and the fact that it is free. And last but
not least, maintenance required for solar energy is minimal.
16
Continuing the list of the benefits coming from the solar energy it is important that photo-
voltaic technologies are small, highly modular and are suitable for exploitation in any chosen
location, when most of other electricity generation technologies have certain limitations. Further-
more, solar power is one of the renewable resources that are available all around the world and
photovoltaics coincident with peak electricity demand that raises from cooling needs all year round
in countries with common high temperatures and seasonal cooling (in summer) demand in other
countries. In addition to that, photovoltaics have no fuel costs and their operation and maintenance
costs are generally low. This is a big advantage while comparing it with conventional power plants,
because it allows photovoltaics to offer competitive prices.
17
1.1. Securing the energy supply
One of the most important reasons for the promotion of the development of solar energy sec-
tor in the EU is the need to secure the energy supply. The issue of the energy supply is highly
important in this region based on its increasing dependency on fossil fuels (gas and oil) imports that
are needed for the transport and electricity generation. Moreover, the EU relies on energy imports
for almost half of its energy consumption. Based on the data collected in the 2011, fossil fuels stood
for 79% of the regions' energy consumption. Ergo, the European Union can really benefit from the
15
European Photovoltaic Industry Association, Global Market Outlook For Photovoltaics Until 2016, 2012, viewed
on 10.06.2013, available online at URL:
http://www.helapco.gr/ims/file/reports/Global%20Market%20Outlook%202016.pdf
16
European Commission, Renewables Make the Difference, 2011, p.15, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
17
International Renewable Energy Agency, Renewable Energy Technologies: Cost Analysis Series. Solar Photovol-
taics, 2012, viewed on 15.06.2013, available online at URL:
http://www.irena.org/DocumentDownloads/Publications/RE_Technologies_Cost_Analysis-SOLAR_PV.pdf
16
new ways of energy production, such as electricity production from renewable energy sources, and
a raising number of energy suppliers in the region. Solar energy sector, as well as other renewable
energy sectors, allows diversifying the energy supply in the EU, this way reducing the risks of
supply cuts, price volatility and stimulating efficiency while increasing the competitiveness in the
energy sector. According to the European Commission, renewable energy share amounting to 20%
could reduce the fossil fuel imports of the EU by nearly 200 million tonnes of oil equivalent per
year.
18
1.2. Effect to the Economy
Another important reason for the solar energy sector development promotion in the EU is its
effect to the economy. Solar energy, as well as other renewable energies, has a great potential for
boosting the competitiveness of the European industry. It is highly important for the European
Union to develop new low-carbon energy sources in order to avoid the substantial pollution and
climate change costs. According to the European Commission, it is crucial for the economy of the
EU to keep Europe between the leaders of such developments. Scientific know-how, technologies
and development of renewable energy industry creates new value added jobs and strengthens the
industry of the EU making it more competitive on a global scale. As mentioned earlier in this study,
European companies dominate in the global renewable energy sector between manufacturers.
According to the data of 2011, these companies employ more than 1.5 million people and have a
turnover of more than 50 billion euro. If the strong growth of this sector continues, by the year 2020
it could provide an additional million jobs and might triple or at least double the mentioned turno-
ver.
19
1.3. Protecting the environment
Additional reason for the promotion of solar energy sector, as well as other renewable ener-
gy sectors, is the aim to protect the environment. The EU has set the target to reduce the pollution
and is putting plenty of effort to control the issues of climate change. Current energy supply of the
EU mainly consists of fossil fuels that give off greenhouse gases in the process of energy produc-
tion. Concerning this issue, solar energy emits no gases of such sort in the process of the produc-
tion, which makes such energy "friendly to the environment". Ergo, increasing the share of solar
and other renewable energies in the total energy mix will result to reduction of greenhouse gas
18
European Commission, Renewables Make the Difference, 2011, p.5, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
19
European Commission, Renewables Make the Difference, 2011, p.4-5, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
17
emissions and help in the process of the environmental protection. As an addition to that, solar
energy also helps to reduce air pollution, which has a direct influence on our health.
20
1.4. Solar energy technologies
While analysing the solar energy sector, its relevance, advantages and other characteristics,
one of the essential aspects appear to be the solar energy technologies. As mentioned earlier, solar
energy technologies are also called photovoltaics. Photovoltaics (or solar cells) are electronic
devices that produce electricity by converting sunlight directly into electric charge. In 1954 the
modern form of such technologies was invented in Bell Telephone Laboratories. In the future global
electricity generation mix the photovoltaic technologies are expected to play a major role based on
it being the fastest growing renewable energy technologies in the present. The modular size of
photovoltaic systems allows these technologies to be within the reach of small businesses, co-
operatives and also individuals who seek for access to their own electricity generation and fixed
electricity prices.
21
1.5. The energy production
Using the solar energy technologies solar power can be converted or concentrated and
turned into electricity needed. The process of converting or concentrating the solar power is
essential in order to produce the electricity, because the density at which the solar radiation reaches
the Earth is not sufficient for generating the thermodynamic cycle that is required for electricity
production.
22
Based on the way the electricity is being produced, whether it is by converting or by concen-
trating the solar power, the solar energy technologies are divided into different types. Photovoltaic
solar cells are made to produce electricity by converting sunlight directly into the required electric
charge. Electricity can also be produced using concentrating solar power, where electric charge
appears from the turbine, which is driven by steam created from the heat, which is focused to a
single point using solar towers or parabolic solar collectors. This technology allows producing the
electricity during the absence of sunlight by storing the heat collected to maintain the power.
20
European Commission, "Renewables Make the Difference", 2011, p.4-5, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
21
International Renewable Energy Agency, Renewable Energy Technologies: Cost Analysis Series. Solar Photovol-
taics, 2012, viewed on 15.06.2013, available online at URL:
http://www.irena.org/DocumentDownloads/Publications/RE_Technologies_Cost_Analysis-SOLAR_PV.pdf
22
European Commission, Renewables Make the Difference, 2011, p.15-16, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
18
Meanwhile, photovoltaic plants also have the capability to be connected not only to the electricity
grid but to batteries as well, where the energy can be stored.
23
1.6. The use of the energy
Solar energy, coming from the world's primary energy source - the sun, as a clean energy
can be used for production of electricity or heat. Converting solar energy into energy used for
heating and cooling purposes allows fulfilling the needs of heating in buildings and industrial
processes, applying the results of production for domestic hot water, solar-assisted cooling, swim-
ming pools, etc. Even the least advanced solar thermal systems are capable of providing sufficient
energy for a (at times even substantial) part of domestic hot water needs. Despite the fact of such
systems being noticeably more productive in sunny climates, the efficiency of new technologies
allow contributing to hot water or space heating in any location within the EU. Solar energy can
also be used by technologies that operate in some way similar to refrigerator technologies, which
allow using the energy for cooling in air conditioning systems with heat absorption.
24
And the
electricity created from solar energy can be adjusted and used for all our electricity needs.
The fact of actually existing tendency and/or intentions to use the energy produced from the
solar or any other renewable energy, in general, is proven by such companies like "Apple" an-
nouncing this year their plans to run their "iCloud" data centres exclusively on renewable energy.
Supermarket "Walmart" also announced its intentions by the year 2020 to be running all of the
stores only on the renewables. As an addition to that, company "Google" has installed a 1.7MW
solar plant already in 2007. Another confirmation of existence and even growth of the mentioned
tendency to use the solar and other renewable energies is the fact of such companies as
Volkswagen, Nike, Renault, HSBC, PepsiCo and Sumitomo following the example set by the
companies mentioned above.
25
1.7. Future solar energy demand
With a goal of confirming the relevance of the solar energy sector in the EU and while
attempting to justify the promotion of development of the sector and the need of solar energy in
general, it is important to establish the possibility and approximate matter of its future demand.
23
European Commission, Renewables Make the Difference, 2011, p.14, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
24
European Commission, Renewables Make the Difference, 2011, p.14, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
25
Ernst & Young Global Limited, Renewable energy country attractiveness index: May 2013, Issue 37, 2013, viewed
on 12.06.2013, p.11, available online at URL:
http://www.ey.com/Publication/vwLUAssets/Renewable_energy_country_attractiveness_indices_-_Issue_37/$FILE/RECAI-May-2013.pdf
19
Based on whether it will increase or decrease, or possibly not even arise at all, we can determine
whether it is reasonable to invest in the solar energy sector or not.
Based on the data reflected in the figure 1, the solar energy in the EU (including photovolta-
ics, solar thermal electricity, solar thermal heating and hot water) has been growing in the analysed
period of time and is expected to continue the growth in even larger portions during the next 17
years. According to the publications of the European Commission, solar energy is set to produce
electricity in increasing amounts during the next several years and, based on projections, the output
of the electricity produced could triple in the time from 2004 to 2020. This can also be observed in
the figure 1.
26
Fig 1. Estimate of renewable energy growth for the EU, 2006-2030, GWh
(Source: Green-X model from the Fraunhofer Institute and EEG (European Economics Group -- Vienna University of
Technology)
The demand of the electricity produced from solar energy can be affected by fluctuations of
such economic indicators like gross domestic product (GDP) and gross value-added. GDP in the EU
decreased by 0.9% in the last quarter of 2012 in comparison with the same period in 2011 and by
0.3% during the 2012 in general. It was the first year that had annual GDP decrease since 2009.
Furthermore, according to the data of the last quarter of the 2012, gross value-added in construction
and industry decreased significantly in comparison to the year before: construction by 4.7% and
26
European Commission, Renewables Make the Difference, 2011, p.23, viewed on 23.06.2013, available online at
URL: http://www.energy.eu/publications/Renewables-make-the-difference-2011.pdf
20
industry by 2.2%. This had to impact the consumption of electricity in the EU based on these two
sectors being energy consumers of great importance.
27
Ergo, further fluctuations of these economic
indicators can also have rather big influence to the demand of the solar energy.
Taking into consideration the fact of global economy facing problems, the market outlook
becomes uncertain. Economic challenges in the government budgets as well as in the world
economy can have a noticeable impact on the photovoltaics market. According to the data published
by the International Renewable Energy Agency, European market of photovoltaics accounted for
80% of global demand in the last several years, which can have a substantial impact on supply and
demand in the global industry of photovoltaics in case of any decrease in annual demand in the EU
resulting from the economic depressions. Nevertheless, any decrease in the EU market could be
compensated by boosts encouraged by policy measures in other photovoltaic markets such as China,
Japan, India, Canada, the United States, Australia and other countries that show noticeable growth.
The largest emerging markets recently are China, South Korea, the Middle East, India and other
Southeast-Asian countries. The growth in these markets is considered to remain sustained, but it is
not believed to be able to reach the levels of growth that was seen in the EU.
28
During the recent years, the largest portion of the photovoltaics growth has been generated
by the promotion policies, such as feed-in tariffs and other incentives, which allowed developing
markets, reducing prices and raising the interest of investors. Given the rapid growth of installations
during recent years, forecasting projections became really challenging. According to the Interna-
tional Renewable Energy Agency, the trends of 2011 set the projections of 131 GW to 196 GW of
installed capacity in 2015. Moreover, the upper range is considered reasonable, while the lower
range is considered to be too pessimistic and could already be reached by the end of 2013 or the
beginning of 2014. Based on the photovoltaic roadmap created by the mentioned agency, by the
year 2020 the installed power capacity of photovoltaics should result to 200 GW.
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1.8. The overview of the Solar Energy sectors of the EU countries
With the main aim of this study being the creation of an idea for a development model for
the solar energy sector in Lithuania taking into account the experience of the EU, it is essential to
screen out the countries of the EU with a most advances solar energy sector, while willing to have a
27
European Commission, Quarterly Report on European Electricity Markets, March 2013, p.3, viewed on
16.06.2013, available online at URL:
http://ec.europa.eu/energy/observatory/electricity/doc/20130611_q1_quarterly_report_on_european_electricity_markets.pdf
28
International Renewable Energy Agency, Renewable Energy Technologies: Cost Analysis Series. Solar Photovol-
taics, 2012, viewed on 15.06.2013, available online at URL:
http://www.irena.org/DocumentDownloads/Publications/RE_Technologies_Cost_Analysis-SOLAR_PV.pdf
29
International Renewable Energy Agency, Renewable Energy Technologies: Cost Analysis Series. Solar Photovol-
taics, 2012, viewed on 15.06.2013, available online at URL:
http://www.irena.org/DocumentDownloads/Publications/RE_Technologies_Cost_Analysis-SOLAR_PV.pdf
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