Data and Facts

Recent facts about photovoltaics in Germany

Compiled by Dr. Harry Wirth, Fraunhofer ISE | Last updated: August 6 ,2021

Germany is leaving the age of fossil fuel behind. In building a sustainable energy future, photovoltaics is going to have an important role. The following summary consists of the most recent facts, figures and findings and shall assist in forming an overall assessment of the photovoltaic expansion in Germany.

  • Will we achieve the photovoltaic expansion targets?

    The annual target of the German Federal Government for PV capacity increase of 2.5 GW [EEG2017] was exceeded in 2020, but the goals of the energy transformation are still far away.

    Under the Climate Protection Act passed in June 2021, Germany is aiming for climate neutrality by 2045. For the energy sector, an even earlier target year than 2045 is expected because the transformation costs are lower here. Dedicated political targets are missing; in the following, 2040 is assumed as the target year.

    In order to cover all of our energy needs from renewable energies (RE), a massive expansion of the installed PV power is necessary, along with a number of other measures. More recent model-based scenarios calculate a reduction of energy-related greenhouse gas emissions alone of at least 90% in relation to 1990, with a PV expansion corridor of

    130-650 GWp nominal capacity ([Prog], [BCG], [ESYS], [ISE11], [UBA8], [IRENA], [ISE12]). The scenarios make different assumptions about boundary conditions, e.g. for energy imports and questions of acceptance. Based on the scenarios calculated with the REMod Energy System Model [ISE12], an order of magnitude of 300 ("efficiency/sufficiency scenario") to 450 GWp ("reference scenario") of installed PV capacity appears plausible.

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  • Does PV contribute significantly to the power supply?

    Yes.

    PV covered 9.2% of gross electricity consumption in Germany in 2020, with electricity generation of 50,6 TWh [UBA1]; all renewables (RE) combined came to 45% (Figure 2). Gross electricity consumption includes grid, storage, and self-consumption losses (Section 25.8). On sunny days, PV electricity can temporarily cover more than two-thirds of our current electricity consumption. At the end of 2020, PV modules with a nominal capacity of 54 GWp were installed in Germany [ISE4], distributed over 2 million systems [BSW1].

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  • Is PV power too expensive?

    It depends on the reference point.

    The cost comparison with fossil and nuclear power generation is made more difficult by the fact that their external costs and risks in terms of environmental, climate and health damage are largely not taken into account in pricing ([UBA3], [FÖS1], [FÖS2]). Hiding these external costs represents a massive subsidy to the energy sources involved (Section 5.2).

    The marginal costs for nuclear power are in the order of 1 €-ct/kWh, for coal-fired power 3-7 €-cts/kWh, for gas-fired power 6-9 €-cts/kWh. The fixed costs of power generation (e.g. investments, capital) are added on top of this. The marginal costs essentially cover the provision of the fuel, but not the neutralization of the radiating waste or polluting emissions (CO2, NOx, SOx, Hg).

    To promote the energy transformation and to stimulate investments in PV systems of various sizes, in the year 2000 the instrument of the German Renewable Energy Sources Act was created. It is intended to enable the plant operator to run the plant at a reasonable profit with a guaranteed purchase. Furthermore, the German Renewable Energy Sources Act aims at continuously reducing the LCOE from RE by securing a substantial market for RE systems (see section 4.1).

    Building PV generation capacity is only a part of the transformation costs associated with the energy transformation. For a long time, this part was at the forefront of the discussion. In recent years, PV has become increasingly system-relevant, bringing new types of costs into focus. In addition to the pure generation costs for electricity from RE, there are the development of grid-serving storage and conversion capacities (e-mobility and stationary batteries, heat pumps and heat storage, Power-To-X, flexible gas-fired power plants, pumped storage) as well as the dismantling of nuclear and coal-fired power plants. These costs are not caused by the PV expansion, they go - just like the PV expansion itself - on the account of the energy transformation. The costs of the energy transformation are incurred by all energy consumers, for whom a sustainable energy supply must be created. Without knowing the costs of an omitted energy transformation, it is difficult to evaluate the costs of the transformation. 

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  • Is PV power subsidized?

    Yes, since the year 2021.

    A subsidy is defined as a benefit from public funds. Up to and including 2020, the subsidy for PV electricity generation did not come from public funds, but from a selective consumption levy, which applies also to self-produced and self-consumed PV electricity. Energy consumers make a compulsory contribution for the - necessary and approved - transformation of our energy system. This interpretation is also supported by the European Commission. The amount of the levy also does not correspond to the total remuneration, but to the differential costs. The cumulative costs paid out for PV power fed into the grid up to and including 2020 amounted to ca. 100 billion euros [BMWi5]. In 2021, for the first time there will be a contribution from the Federal Government's Energy and Climate Fund (section 4.6). The revenues of the Energy and Climate Fund come from emissions trading and from federal subsidies, thus there is a partial subsidy since 2021.         

    To calculate the EEG surcharge, the financial benefits of PV power are determined according to the market clearing price. By this method, the benefits of PV power are underestimated systematically. For one, PV power has long been having the desired effect on this market price, namely that of driving it downwards (see section 4.3). On the other hand, the exchange price still largely ignores important external costs of fossil and nuclear power generation (Section 5.2).  

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  • Are we exporting large amounts of PV power to other European nations?

    No, the increased export surplus comes primarily from coal power plants.

    Figure 16 shows the increase in electricity exports since 2011 [ISE4]. The monthly values of the Energy Charts (www.energy-charts.de) show that the export surplus was conspicuously high in winter, i.e. in months with a particularly low PV power production. The average export price per kWh of electricity differs slightly from the average import price.

    The fact that the German power plant park is increasingly producing for export should also be related to the low production costs for coal electricity, in particular the low CO2 certificate prices (Section 5.2) of recent years.

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  • Can small PV systems generate attractive returns?

    Yes.

    In principle, small PV systems can generate returns both via the EEG remuneration for feeding electricity into the grid and via the reduction in electricity consumption thanks to self-consumption. Due to the sharp drop in prices for PV modules, attractive returns are possible. The Solar Cluster Baden-Württemberg has estimated returns of up to 5 % for small systems without battery storage and with self-consumption of around 25 % [SCBW].

    Self-consumption becomes more worthwhile, the greater the difference is between the cost of delivering PV electricity and the LCOE of the PV system. For systems without energy storage, the self-consumption is dependent on coinciding supply and demand profiles. Independent of the system size, households generally consume 20 - 40 % of their self-produced electricity [Quasch]. Larger systems increase the percentage of PV coverage for the total power, however, reduce the percentage of self-consumption. Commercial or industry consumers achieve a particularly high rate of self-consumption as long as their consumption profile doesn’t collapse on the weekends (e.g. Refrigerated warehouses, hotels and restaurants, hospitals, server centers, retail). Energy storage and technologies for energy transformation offer a large potential for increasing the self-consumption (compare Section 19.3).   

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  • Does installing PV only create jobs in Asia?

    No, but Germany has lost many jobs in the PV industry in the last decade.

    The complete PV value-added cycle based on silicon wafer technology (Figure 18) starts with the production of high-purity polysilicon and continues with the crystallization of silicon ingots and the sawing of silicon wafers. This is followed by cell production and module production. If coverage of more than one stage is to be emphasized, this is referred to as (vertically) integrated PV production.

    According to calculations by Fraunhofer ISE, a vertically integrated 10 GW production from silicon ingot via wafer and cell to module creates about 7500 full-time jobs [ISE8]. According to a study by EuPD Research based on figures from 2018, approximately 46,500 full-time employees are needed to install 10 GW of PV [EuPD].

    A large number of material and component manufacturers are part of the extended PV value cycle, supplying, for example, silver pastes for solar cells as well as special films, wires, solar glass and junction boxes for solar modules.

    While there was still a complete PV supply chain in Germany and Europe around 2010, the production of some starting materials has been discontinued due to the regional demand which has decreased in the meantime.

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  • Are large energy suppliers interested in PV?

    The PV capacity operated in Germany is predominantly owned by private individuals, farmers and commercial enterprises (Figure 19). No other power generation technology enables such a high degree of decentralization and participation. The traditional electricity suppliers, especially the "big four" (E.ON, RWE, EnBW and Vattenfall), had been reluctant to invest in PV for a very long time. Where did this reluctance come from?

    1. Until a few years ago, the electricity production costs for solar power were much higher than for electricity from other renewable or fossil sources, CO2 emission costs did not play a role.
    2. The electricity consumption in Germany is showing a declining to stable tendency since 2007. The construction of new PV power plants will force either a reduction in the utilization rate of existing power plant parks or an increase in electricity export.
    3. Because PV electricity is generated primarily during periods of peak load, conventional peak load power plants are required less often. This reduces their utilization and profitability in particular. Paradoxically flexible power plants with fast response times are increasingly in demand for the energy transformation.
    4. PV power plants deliver power during the day at times when demand is at a peak (Figure 50). This lowers the market price of electricity on the EEX, which carries over to all plants presently producing electricity. (Section 4.3). In the past, the large power plant operators were therefore able to sell base load electricity at lunchtime very lucratively. Since 2011, PV led to price reductions on the energy exchange and thus to dramatic slumps in profit for the “big four”.
    5. Because PV power production fluctuates, the slow start-up and shut-down properties of nuclear of older coal-fired power plants cause difficulties with increasing PV expansion. One particularly striking example is negative electricity prices on the market. Coal is being burned and the consumers must pay for the electricity. This leads to system wear in places where controls are technically feasible but no provision in the necessary frequency exists.
    6. Radically new business models are required for decentralized PV production as compared to largely centralized coal and nuclear power production. In the wind sector, especially offshore production, the transformation effect is less drastic.

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  • Is PV research taking up high levels of funding?

    In 2020, the German government has invested 1.2 billion euros in energy research. Of this, 86 million euros went to support photovoltaic research (Figure 21).

    By way of comparison: even after the decision to phase out nuclear power, European treaties are still forcing Germany to finance the EURATOM program with high double-digit million amounts each year, in 2019 with around 80 million euros [FÖS3]. Most of the EURATOM funds are spent on fusion research.

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  • Does PV power overload our energy system?

    Most solar power systems in Germany are connected to the decentralized low-voltage grid (Figure 21) and generate solar power consumption. 

    As a result, solar power is mainly fed in decentrally and hardly demands to expand the German national transmission grid. High PV system density in a low voltage grid section may cause the electricity production to exceed the power consumption in this section on sunny days¸ due to the high simultaneity factor. Transformers then feed power back into the medium-voltage grid. At very high plant densities, the transformer station can reach its power limit. An even distribution of PV installations over the network sections reduces the need for expansion.

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  • Is there enough space for PV in Germany?

    Yes, without any significant conflicts with agriculture.

    An important concept for the development of significant land potential is integration. Integrated photovoltaics enables double land use, additional land consumption for new PV power plants is significantly reduced or completely avoided. For this purpose, PV systems specially tailored to the application are combined with agriculture, erected on artificial lakes, used as envelopes for buildings, parking lots, traffic routes and vehicles, or they provide ecosystem services on renaturalized biotope and moorland areas (Figure 29).

    In the following analysis of potential, a distinction is made between a theoretical, a technical and an economic-practical, feasible or exploitable potential. The theoretical potential considers the maximum possible implementation of a technology on the basis of the total supply (physical rough calculation). The technical potential is lower because it already takes basic technical constraints into account (technical rough calculation). The economic-practical potential takes into account all relevant boundary conditions, in particular legal (including nature conservation), economic (including infrastructure), sociological (including acceptance), as well as competing uses (e.g. solar thermal energy and PV on roofs). Different sources draw somewhat different boundaries between the categories.

    The agriculturally used area in Germany is just under 17 million hectares (theoretical potential, Figure 29). Agri-Photovoltaics (APV, see www.agri-pv.org) uses land simultaneously for agricultural crop production (photosynthesis) and PV electricity production (photovoltaics). APV covers a wide spectrum in the intensity of agriculture and in the additional cost of PV system construction. It ranges from intensive crops with dedicated PV mounting systems to extensive grassland with marginal adaptations on the PV side and high potential for ecosystem services. APV increases land efficiency and enables massive expansion of PV power, while preserving fertile soils for agriculture or in combination with the creation of species-rich biotopes on lean soils. Worldwide, APV is already used on a GW scale; in Germany, there are only a few systems.

    Agrivoltaics with highly elevated modules allows crops to be grown partially shaded under the modules. A number of crops show hardly any yield loss with reduced irradiation, some even benefit. If permanent crops (e.g., orchards and vineyards) are considered in their entirety and arable land (excluding corn crops) is considered one-third of the technical potential, an occupancy density of 0.6 MWP/ha results in a technical potential of 1.7 TWP.  Modules mounted close to the ground with wide row spacing allow cultivation between rows. At an occupancy density of 0.25 MWP/ha, the cultivation of forage crops on permanent grassland alone opens up a technical potential of a further 1.2 TWP.

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    more Information about Integrated PV

  • Do PV-systems destroy ecologically valuable areas?

    No, on the contrary, usually they promote renaturation.

    If an area is taken out of intensive agriculture, e.g. energy crop cultivation, converted into grassland and a ground mounted PV system is installed on it, then biodiversity increases in principle [ESD]. In ground mounted PV system, no fertilizer is used, so that less demanding plants have a chance. The fencing of a ground mounted PV system protect the area against unauthorized access and free-range dogs, which is good for ground breeders, among other aspects.

    Further improvements can be achieved by making small adjustments to the PV system. Enlarged row spacing of the module tables, slightly elevated mounting of the modules, sowing of wild plant mixtures instead of grass monoculture and careful maintenance of the greenery create a biotope solar park.

    According to the German Federal Agency for Nature Conservation, peatland soils cover 1.4 million hectares in Germany, of which about 50% is used as grassland and 25-30% as arable land. The draining of peatlands for intensive agricultural use leads to a dramatic increase in their CO2 emissions. Alternatively, on already used peatland, adapted PV power plants with reduced occupancy density could provide an area yield without intensive agriculture. The partial shading by PV counteracts the drying out of peatlands or supports the rewetting. Based on the agriculturally used peatland area of 1.1 million ha and an occupancy density of 0.25-0.6 MWp/ha, technical potentials of 270-660 GWp result.

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  • Do PV power plants find acceptance in the population?

    Yes. The free scalability of PV power plants enables decentralized expansion, even down to so-called "balcony modules" ("plug-in PV") with a few hundred watts rated power. The high number of more than 1.7 million PV systems in Germany, of which about 60% are small systems with outputs below 10 kW, shows that extensive use is made of these technical possibilities.

    According to a representative survey by Lichtblick, solar systems are among the most popular power plants [Licht2]. Figure 32 shows the distribution of the answers to the question "If you think of the construction of new plants for energy generation in Germany: What types of plants should the focus be on?”

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  • Are PV plants in Germany efficient?

    The efficiency of PV systems as an energy conversion efficiency is comparatively low with values around 20%, but the sun shines for free. The effects of the efficiency on electricity production costs, space requirements, use of resources, CO2 savings, etc. are particularly relevant for the application.

    The nominal efficiency (see section 25.2) of commercial wafer-based PV modules (i.e. modules with silicon solar cells) in new production increased by an average of about 0.3 percentage points per year in recent years to average values of about 20 % [ITRPV]. Per square meter of module, they thus provide a nominal power of 200 W, top-class modules are 10 %relative above this value.

    Since additional losses occur during operation, PV plants do not actually operate at nominal module efficiency. These effects are combined in the performance ratio (PR). A well-designed PV plant installed today achieves a PR of 80 – 90 % annual average (typical value). This takes into account all losses incurred as a result of higher operating temperature, varying irradiance conditions, dirt on the solar modules, line resistance, conversion losses in the inverter and downtime. Inverters convert the direct current (DC) generated by the modules to alternating current (AC) for grid feed-in. The efficiency of new PV inverters currently stands close to 98 %.

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  • Does PV make relevant contributions to climate protection?

    Yes.

    While PV systems do not release any CO2 during operation, a holistic view must also take into account the production and disposal of the system. An analysis commissioned by the German Federal Environment Agency has shown greenhouse gas potentials for PV electricity for a system operation in Germany (assumed average annual irradiation sum at the module level 1200 kWh/(m2·a)) with monocrystalline PV modules between 35 and 57 g CO2-eq./kWh (Figure 40, [UBA7]). PV modules produced in Europe are particularly favorable, because the electricity mix here contains higher shares of RE and the transport distances are significantly shorter. Multicrystalline-line modules have even lower GHG potentials than monocrystalline modules, which currently have the larger market share. With the continued increase in efficiency, GHG emissions per kWh of PV electricity will continue to decrease.

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  • Does the manufacture of PV modules consume more energy than they can produce?

    No.

    The Energy Returned on Energy Invested (ERoEI or EROI) describes the ratio of the energy provided by a power plant and the energy expended for its life cycle. The Energy Payback Time (EPBT) indicates the amount of time a power plant must be operated to replace the primary energy invested.

    Harvest factor and energy payback time of PV plants vary with technology and plant location. An analysis commissioned by the German Federal Environment Agency determined EPBT for PV power plants at a plant operation in Germany (assumed mean annual irradiation sum at the module level 1200 kWh/(m2-a)) of 1.6 years for multi- and 2.1 years for monocrystalline Si modules [UBA7]. With a lifetime of 25-30 years, this results in yield factors in the range of 10-15.

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  • How do PV modules affect the local and global heat balance?

    The solar radiation balance makes an important contribution to the Earth's heat budget. Bright surfaces reflect a larger portion of the incident solar radiation back into space, while dark surfaces such as asphalt absorb more and thus heat up the earth.

    The solar reflectance of ordinary PV modules is very low, on the order of 3 - 5 %. They are optimized to absorb as much solar radiation as possible in the active layer. Ordinary thermal insulation glazing, especially solar control glazing, reflects many times more (in the order of 10 - 30 %). Comparing an ordinary glass building facade with a PV facade, the PV facade reflects significantly less solar radiation downward to the street level.

    The solar absorptance of ordinary PV modules is very high for the reasons mentioned above. If PV modules with an operating efficiency around 18 % convert solar energy into electrical energy and additionally reflect a small part of the irradiation (order of magnitude 3-5 %), they generate locally as much heat as a surface with about 20 % albedo. For comparison, asphalt has an albedo of 12 - 25 %, concrete 14-22%, a white wall 65 - 80 %, a gray wall 20 - 45 %, green grass 26 % (https://www.stadtklima-stuttgart.de/index.php?klima_klimaatlas_5_grund). PV modules in operation thus generate similar amounts of heat as a concrete surface with 20 % albedo.

    The heat storage capacity of ordinary PV modules is significantly lower compared to, for example, a solid concrete wall. As a result, the PV module heats up faster than a concrete wall under solar radiation with the same albedo, but also cools down faster in the evening. The PV module will reach higher maximum temperatures under solar radiation because heat cannot dissipate to the rear as in a solid concrete wall.

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  • Are PV systems capable of replacing fossil fuel and nuclear power plants?

    No, not in the near future.

    PV and wind power may currently be capable of reducing the use of fossil fuels, imported energy consumption and CO2 emissions but until considerable storage capacities for electricity or hydroelectric storage facilities are available in the grid, they are not capable of replacing capacities. Calm, dull winter days, when power consumption can reach a maximum and no solar or wind power is available, present the most critical test.

    Despite this, PV and wind power are increasingly colliding with conventional power plants with slow start-up and shut-down processes (nuclear, old lignite power plants). These power plants, which are almost only capable of covering the base load, must be replaced by flexible power plants as quick as possible. The preferred power plant choice is multifunctional electrically powered CHP plants fitted with thermal storage systems (Section 19.3.6).

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  • Are we capable of covering a significant proportion of our energy demand with PV power?

    Yes, to the extent that we adapt our energy system and the energy-related structures to the requirements of the energy transformation.

    Energy demand and supply

    The traditional energy industry promotes fossil and nuclear energy sources (primary energy), converts them and prepares them for end users (Figure 45). 

    There are dramatic efficiency deficits in conversion and final energy consumption (cf. Section 19.3.3). Our future energy demand is by no means the same as today's primary energy consumption, neither in terms of quantities nor in terms of energy carriers.

    Until now, Germany has been highly dependent on energy imports (Figure 46), associated with the risk of volatile prices, political interference by mining and transit countries, and the risk of disruptions in raw material logistics, for example due to low water in rivers.

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  • Do we need PV production in Germany?

    Yes, if we want to avoid new dependencies in energy supply.

    As the energy transformation progresses, Germany will leave behind the «fossil fuel” century, in which we spent 90 billion euros for oil and gas imports. The prices of these imports are influenced by cartels, the revenues largely finance authoritarian regimes, and there are often political costs as well as monetary ones.

    The energy transformation offers the chance to escape from this dependency. Not only does the sun also shine in Germany but Germany has also made decisive contributions to technology development in the solar sector. Despite the slowdown in national expansion of Germany’s solar market, the German PV sector with its material manufacturers, engineers, component manufacturers, R&D institutes and training facilities has held onto its leading position worldwide.

    An energy system converted to renewables is based, among others, on 300-450 GW of installed PV power. Annual installations of 10-15 GW are required for the construction and increasingly for the ongoing renewal of these power stations, corresponding to approx. 40 million PV modules at a cost of several billion euros. A PV production in Germany offers long-term security of supply at high ecological and quality standards.

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  • Does it still need a Renewable Energy Sources Act (EEG)?

    Yes, with focusing on the energy transformation process.

    The current market mechanisms would provide too little incentive for long-term investment in the energy transformation without the support of an EEG. The main reasons is the sectoral gaping pricing of CO2 emissions, which fluctuates with the stock market and is much too low overall. A socially balanced national carbon tax, such as that introduced in Sweden in 1991 and in Switzerland in 2008 as a "tax levy", can bridge these shortcomings.

    As a rule, PV power plants of all sizes require a grid connection in order to deliver electricity that can neither be consumed on site nor saved economically. In order to maintain the diversity of actors involved in PV generators, a legal framework must entice the grid operator to make connections easily.

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  • Do PV modules contain toxic substances?

    Often yes, so PV modules do not belong in the residual waste.

    Wafer-based modules

    The silicon wafer-based modules (more than 90 percent of the market share) often contain lead in the cell metallization layer (around 2 grams of lead per 60-cell module) and in the solder used (approximately 10 grams of lead). Lead, a toxic heavy metal, is soluble in certain, strongly acidic or basic environments, and lamination in the module does not permanently prevent mass transfer [IPV]. In wafer-based modules, lead can be completely substituted by harmless materials at low additional costs. Some module manufacturers use backsheets containing fluoropolymers, for example polyvinyl fluoride.

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  • Are there enough raw materials available for PV production?

    Wafer-based modules

    Wafer-based modules do not require any raw materials which could become limited in the foreseeable future. The main components by weight are glass, aluminum, polymers and silicon, with silicon and aluminum among the most important components of the earth's crust by weight. Most critical is silver consumption for cell production. The PV industry currently consumes about 1,500 metric tonnes of silver annually, corresponding to almost 6 % of production in 2020. The silver on the solar cell can be technically substituted by copper to the greatest possible extent, and some manufacturers already use copper..

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  • Can defective PV plants cause a fire?

    Yes, as is the case with all electric installations.

    Certain faults in the components of PV plants that conduct electricity may cause electric arcs to form. If flammable material, like roofing material or wood, lies in close vicinity to these arcs, then a fire may break out depending on how easily the material ignites. In comparison to AC installations, the DC power of solar cells may even serve as a stabilizing factor for any fault currents that occur. The current can only be stopped by disconnecting the circuit or preventing irradiation reaching any of the modules, meaning that PV plants must be constructed carefully.

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