Global production of photovoltaic (PV) or solar cells -- which convert the sun's light directly to electricity -- increased 51 percent in 2007, to 3,733 megawatts. According to early estimates, more than 2,935 megawatts of solar modules were installed that year, bringing cumulative global installations of PVs since 1996 to more than 9,740 megawatts -- enough to meet the annual electricity demand of more than 3 million homes in Europe. Over the past five years, annual global production of PV cells has increased nearly sevenfold, and cumulative installations have grown more than fivefold.
51 percent annual growth is heady stuff. But the most significant aspect of that number is that the surge in production occurred during a period when production growth was supposed to be constrained by dire shortages of a key ingredient in photovoltaic cells -- polysilicon. As recently as two years ago, analysts were suggesting that the high price of polysilicon would force solar power growth rates to plummet.
Polysilicon prices are still high, by any historical standard, but new production facilities are coming online with such speed that one Chinese solar power manufacturer canceled plans for its own billion dollar polysilicon foundry earlier this year, after deciding it would be able to purchase all the polysilicon it needed on the open market at reasonable prices. Which means that the cost of manufacturing photovoltaic cells will likely fall dramatically, setting up even higher solar power growth rates in years to come.