Potential by technology / Solar

Solar PV development potential in Armenia

The project “Assistance to the modern Solar PV industry development in Armenia” funded by the GEF/World Bank/R2E2 Fund had the goal of assisting the Government of the Republic of Armenia in assessing the potential of solar PV industry development in Armenia.
Solar PV development potential in Armenia
There is a strong motivation for the development of an Armenian PV industry. Here are some obvious reasons:

• Strong growth in worldwide electricity demand. Global power consumption is expected to increase by 58% between 2010 and 2030.
• Strong demand for renewable energy. With solar energy capacity growing 43% annually from 2008 to 2012.
• Armenia has access to raw materials (high quality sand and silica), low labour costs, politically stable country, an emerging economy.
• Significant solar radiation conditions – 2500 hrs of sunshine per year. At 1720 kWh/m2 (the average in Europe is 1000 kWh/m2).
• Sustainable economic development, export oriented industry, and the creation of new jobs and associated industries.

Assessment of the modern solar PV industry development potential in Armenia
Armenia has proven experience in PV technologies and has significant deposits of raw materials for developing a whole technological chain locally.
The comparative advantages for Armenia are based on the following factors:

• Existence of a wide variety of siliceous raw material of various types and morphology.
• Quartz and siliceous raw material deposits of Armenia, by their physical, chemical and mechanical composition (practical absence of B and P impurities) can be recommended for metallurgical silicon production (up to 1000 tons/yr) as well as for poly-silicon production by current and new technologies.
• Existing manufacturing and energy infrastructure will allow Armenia to develop a solar PV industry along the whole technological chain, in a cost effective manner.
• Local experience in PV technologies as well as the highly competitive R&D potential could provide a basis for effective local capacity building and know-how transfer.

At this stage of technology development and anticipated market development trends, based on local raw materials, the following technology could be considered as economically attractive in terms of NPV and IRR rates: PV solar module production based on Poly-silicon and Upgraded Metallurgical Grade (UMG) silicon blend. The technological chain will consist of; mining of quartzite, processing for metallurgical silicon, production of UMG silicon and poly-silicon, blending process, production of ingots, production of wafers and solar cells, and production of PV modules.
The NPV for this technology is positive and the IRR rate is over 15% after taxes. This makes the selected technology economically feasible. On the other hand, the most critical components for the economic viability are: expected market price, production costs, and the electricity tariff.
In terms of environmental impact, potential risks were assessed and can be mitigated.

Highlights of some results
Just to highlight some benefits Armenia can gain by developing a manufacturing industry that would produce, for example 100 MW/yr PV modules.

• Foreign investments: about 300 million Euros.
• Jobs created: about 3,000.
• Improved energy independence and security (2 – 5% of generation mix).
• Current industry upgrade and new industry development.
• Indirect investments to support industry.
• Leveraging of the Foreign Direct Investment of local industries.
• Environmental improvements.
• Increased tax flow to the National budget from new economic activity.

The existence of a significant solar energy potential in Armenia, will enable the local market to contribute an overall energy mix of up to 3% for Armenia in the next 15 years. This contribution will be possible by utilizing the solar PV technology as the increasing share of electricity production in the country.