By Kim Yoo-chul
Staff Reporter
Solar power energy means a lot to resource-poor South Korea.
Power generation through renewable energy sources is being aggressively promoted by the nation's leading conglomerates as energy prices are soaring and awareness is becoming high on environmental issues.
Korea is a late player in the solar photovoltaic power market and has been strongly focusing on developing large-scale centralized power plants using recycling energy.
Samsung Electronics and its archrival LG Electronics have consistently strengthened their portfolios in the solar cell business, while Hyundai-Kia Automotive Group, POSCO and Doosan Heavy have also allocated massive solar-related budgets with the belief that their future lies in renewable energy, especially hydrogen.
Despite a growing interest in solar energy, obstacles such as high costs and low political support are deterring faster commercialization and further installations in the country, according to research firms and analysts.
"Affordability and overwhelming political support are the major challenges with building integrated photovoltaic (BIPV) cells," a market research firm Frost & Sullivan said Wednesday.
"For example, market participants across Europe will now have to find ways to handle what many consider to be the two biggest challenges facing the BIPV market right now," it said, adding high capital costs impede its large-scale commercialization.
BIPV refers to the photovoltaic materials that structurally serve as exteriors such as roofs, facades, or skylights of buildings. Solar energy is captured through the use of photovoltaic modules and used to generate electricity.
Last week, the South Korean government said it will invest 3 trillion won or $2.7 billion over the next five years to foster the green energy sector including solar energy, fuel cells and power plants. But the plan has been under fire as the show-off announcement doesn't include any eye-catching blueprints.
"The growth of the BIPV market is highly dependent on government support in terms of fund allocation, incentive schemes and other tax benefits. The market development is likely to suffer a huge setback if incentives or subsidies are withdrawn," the firm said.
According to an analyst by Frost & Sullivan, high capital costs and a minimum payback period of six to eight years pose another obstacle in commercializing BIPV systems.
"High installation costs can be partially addressed through an effective feed-in-tariff system and other tax incentives from the government," Brian Kanghee Rhee, a consulting manager of the firm, said.
The demand for BIPV systems in South Korea is driven by a government mandated goal to achieve 1,300 megawatt generation by 2011 and solar subsidy programs.
It has been estimated that the BIPV market here is likely to reach $140 million by 2010, with demand for light-weight and cost effective systems soaring from various end-user segments.