The International Renewable Energy Agency (IRENA) is an intergovernmental organisation that supports countries in their transition to a sustainable energy future, and serves as the principal platform for international co-operation, a centre of excellence, and a repository of policy, technology, resource and financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy, in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity.
Developing a renewable energy sector brings immense opportunities to fuel economic growth,
create new employment opportunities and enhance human health and welfare. Many countries
increasingly consider the socio-economic benefits of renewable energy development as a key driver to
support its deployment (IRENA, 2016a).
The data presented in the report were obtained through surveys and interviews with internationally
recognised experts and from desktop research that gathered information published by leading companies and specialised institutions in the solar industry. Forty-six stakeholders were interviewed or responded to questionnaires on the requirements to develop a solar photovoltaic (PV) industry. They included project developers, component manufacturers, service providers, energy authorities and national and global associations for solar and renewable energy. The study also draws on public reports of solar PV energy companies, including annual reports; technical specifications and equipment handbooks; and public price lists.2 The scope of the study is global, covering Canada, Chile, China, the European Union and the United States. The first section of the report discusses the current and projected socio-economic benefits of solar photovoltaics (PV) deployment. The second section analyses the requirements (in terms of skills, materials and equipment) to develop solar PV projects along each segment of the value chain. The third section presents recommendations on how to maximise value creation from the development
of a domestic solar PV industry while leveraging existing industries.
VALUE CREATION IN THE PHOTOVOLTAIC SECTOR
Solar PV energy deployment has risen steadily for nearly two decades, from less than 9 gigawatts
(GW) installed capacity in 2007 to more than 290 GW in 2016 (IRENA, 2017d). IRENA estimates
that achieving the energy transition in the G20 countries would require cumulative investments in
the solar sector of about USD 3,630 billion by 2030 and USD 6,610 billion by 2050 (IRENA, 2017a).
Such investments can create value, and result in economic benefits, including income generation and job creation (see Figure 1).
Potential for job creation The solar PV sector employed 3.1 million people in 2016, mainly in China, Japan, the United States, Bangladesh and India (IRENA, 2017b) (see Box 2). Furthermore, IRENA estimates that the solar sector (including solar water heaters) could support around 9 million jobs in 2050.
For a country deploying solar PV, the potential to generate income and create jobs will depend on
the extent to which industry along the different segment of the value chain can employ people
locally, leverage existing economic activities or create new ones. The analysis in this study focusses
on the core segments of the solar PV value chain: project planning, procurement, manufacturing, transport, installation and grid connection, operation and maintenance (O&M) and decommissioning (see Figure 2).
Cost breakdown of a PV project The total cost of a utility-scale ground-mounted solar system can be divided into three categories: the cost of modules, the cost of inverters, and balance of system costs (other hardware, installation and soft costs). In 2015, balance of system costs were the major cost component of solar projects, accounting for about 60 percent of total cost; modules accounted for 30 percent and inverters 10 percent.
REQUIREMENTS FOR SOLAR PV DEVELOPMENT
With a total at 229,055 person-days needed to develop a solar PV plant of 50 megawatt (MW), labour requirements vary across the value chain. People working on O&M are needed throughout the project lifetime, and therefore represent the bulk of the labour requirements (56 percent of the total)4 (see Figure 4). Equipment manufacturing (22 percent) and installation and grid connection (17 percent) also require significant labour inputs.
Activities at the project planning phase comprise site selection, technical and financial feasibility studies, engineering design and project development. The first two activities involve measuring the solar
resource potential and estimating the environmental and social impacts of developing a solar plant on
an identified site. Engineering design involves identifying the technical aspects of the mechanical
and electrical systems, the civil engineering work and infrastructure, the construction plan and the
operations and maintenance (O&M) model. Project development consists of administrative tasks such
as obtaining land rights, permits, licenses and approvals from different authorities; managing regulatory issues; negotiating and securing financing; negotiating and signing insurance contracts; contracting an engineering company; negotiating the rent or purchase of the land; and managing the procurement processes.
Planning a 50 MW solar PV plant requires an estimated 2,120 person-days of labour. Project development activity accounts for about 59 percent of this labour (1,250 person-days), followed by site selection (17%), engineering design (12%), and feasibility analyses (12%). Table 1 presents a breakdown of the total workforce needed in project planning by activity.
Project planning requires equipment to measure solar resources at the site, such as pyranometers and pyrheliometers, along with solar energy simulators and programmes to predict the availability of solar resources.5 It also requires com-puters and software to run simulations and produce feasibility analyses.
Technical information is required to describe climatic features at the site that might affect a project’s structural and operational requirements or place limitations on the solar panels. Knowledge of policies and regulations related to support schemes for renewable energy, grid connection and land use is crucial for informing decisions about whether or not to proceed with the development of the solar plant.
Manufacturing and procurement
The main components of a solar plant that decision makers may consider manufacturing domestically
are the solar cells, solar modules, inverters, trackers, mounting structures and general electrical
components. The existence of government policies incentivising local value creation, the availability of raw materials and the presence of related industries may drive decisions about local manufacturing of PV components. Moreover, increased competition, low prices and overcapacity (see Box 3) in the global market could discourage the development of a domestic manufacturing industry for modules, especially when a neighbouring country is a large producer or domestic demand for equipment is not expected to be high.
Figure 8 shows the materials needed to manufacture the most commonly used PV panels as a percentage
of total panel mass. Typical c-Si PV panels consist of about 76% glass (panel surface), with polymers,
aluminium, silicon, copper and silver and other metals taking up much smaller shares of the panel mass. Thin film solar panels generally require higher shares of glass in their total mass: CIGS panels are composed of 89% glass and CdTe at 97%.
Operation and maintenance
The operation and maintenance phase of a PV plant covers its operation for the expected lifetime of about 25 to 30 years. This plants do not require complex maintenance, but a failing component should be rapidly repaired or changed. O&M activities can be undertaken by the project developer or subcontractors. Modern PV plants are automated and controlled by SCADA. Their operation is normally monitored remotely, by operators who reset the systems after line or grid outages.
Finally, decommissioning a PV plant involves planning the activity, dismantling the project,
recycling/ disposing of the equipment and clearing the site. These activities can usually be handled
It takes about 5,150 person-days to decommission a 50 MW solar PV plant. The most labour-intensive activity is dismantling the project, which requires 3,060 person-days (60 percent of the total). Disposing of equipment and clearing the site require 1,220 and 890 person-days, respectively (21 and 17 percent of the total) (see Table 8). Those activities can commonly be handled locally.
The socio-economic benefits of renewable energy have become a key consideration in building the case
for its wide deployment. Increasingly, governments see the potential to fuel economic growth, create
employment opportunities and enhance welfare by investing in renewable energy. Opportunities for domestic value creation can be created at each segment of the value chain, in the form of jobs and income generation for enterprises operating in the country.