Policies for the development of RES in the European Union - The Sustainability of Renewable Energy in Europe - page 78

price of the modules, to nearly 80 %, resulting in a series of financial problems to
the companies that had invested in the sector. The photovoltaic system prices have
followed the reduction in module prices but at a lesser rate; this is clear when one
considers that the share prices of the modules in the system takes 50 % of the price.
The price of photovoltaic varies between countries. The reasons for these differ-
ences lie in the fact that there are different legal requirements for permits, license,
and connecting to the network, which then have an impact on photovoltaic manu-
facturers.
In the years 2012 and 2013, the cost of PV modules has fallen by about 60 %.
At the beginning of 2012, the thin-film module prices have fallen below US$ 1 per
watt, with prices ranging between US$ 0.84 and 0.93 per watt. The price of crystal-
line silicon modules is slightly higher and varies between US$ 1.02 and 1.24 per
watt.
Germany has recorded in 2010 the lowest level of cost for the photovoltaic sys-
tem in the small-scale residential market (lower than 5 kW), with an average price
for silicon of approximately US$ 4 per watt. Grid parity with the prices of residen-
tial electricity market should soon be reached with regard to photovoltaic in areas
with good solar radiation, with a few exceptions. The photovoltaic also has the
advantage that once it is installed it is very productive and therefore fails to meet the
needs of the electricity sector like no other RES is capable of doing.
Wind energy is one of the most competitive technologies among RES and in
countries characterized by the massive presence of wind, it is even able to compete
with fossil fuels based technologies. In Europe, the most competitive regions for the
presence of wind are the north and west coasts of Scandinavia, the UK, and some
parts of the Mediterranean.
The assumptions considered to calculate the cost of energy produced by on-
land wind power are essentially the following: calculations are related to new land-
based, the turbines is a medium size, the lifetime of a turbine is set at 20 years, and
the discount rate is assumed to range from 5 to 10 % annum.
After a first period in which the price of the turbines was higher due to an in-
crease in the price of commodities and an excess of demand over supply, the price
of the turbines has decreased recently, thanks to the low prices on the market of
wind turbines produced in emerging countries. On average, the LCOE of new wind
farms in 2010 was around US$ 0.1 per kilowatt-hour, with a cost of capital of 10 %.
The rapid growth of PV in Europe can be demonstrated considering projections
to 2010 that had been made by the European Commission in the White Paper in
1997 (COM ( 1997 ), p. 599 final), according to which it would have to reach a
production amounting to 40 GW. This value was equal to 16 times the installed ca-
pacity in 1995, but this goal was reached in 2005 and in 2009 the installed capacity
exceeded 72 GW. The majority of wind power is installed onshore, but there are re-
cent offshore sites that have been installed in Denmark, Ireland, Sweden, Germany,
the Netherlands, and the UK, so as to reach a production of 1500 MW in 2009. The
offshore wind farm is becoming increasingly attractive to many countries because
the wind intensity is much higher and the environmental impacts are lower com-
pared to wind power onshore.