Part 1: “Grid Parity – two words, many different meanings”
The discussion, moderated by Winfried Hoffmann, EPIA Vice-President started with a presentation from himself. (See presentation). Afterwards, a discussion with the following participants was held:
- Anton Milner, Q-Cells
- Bernhard Dimmler, Würth Solar
- Kai Siemers, Solon
- Manfred Bächler, Phoenix Solar
- Stephan Hansen, First Solar
Some ideas and comments out of the discussion are presented:
The concept grid parity (GP) can be applied to two different players:
1. Consumer Grid Parity (for Residential, commerce and industry)
2. Electricity Generator Grid Parity (big PV power plants)
To reach grid parity in a certain region or country, there two main aspect to take into account: PV generation cost and the retail electricity prices. Due mainly to the second aspect, grid parity will be firstly reached in Italy. Spain could be the second country to reach it followed by Germany a couple of years afterwards.
However, even if Grid parity (GP) is reached in some regions where the electricity market is already liberalized, PV has not experienced yet a large deployment. This is the case of Japan and California, where the PV electricity cost is below than the retail electricity prices during the day in summer.
The main reason is the long time to return the initial investment of the PV system. In USA, for instance, private investors don’t tend to realize long-term investments (of more that 5-7 years).
Therefore, Grid parity is a necessary but not sufficient condition in order to experiment a large PV deployment. Other necessary conditions are:
Internalization of external costs (C02 emissions, waste treatment, usage of water, etc)
Liberalization of electricity market (the price of the electricity should reflect the real electricity generation cost)
Regarding the module production cost and the potential for reduction, it was not completely agreed among the panel that the PV sector will reach an investment cost of 5/10c€/KWh (for Spain and Germany respectively) by 2020. However, everyone agreed that that was not an impediment to reach grid parity due to the constant and higher increase of the electricity prices.
The discussion was focus on the added value of PV for the electricity network. In one hand, if PV electricity is self consumed, the total electricity demand will be reduced and therefore this will reduce the cost of network operating. In the other side, electricity distributors (utilities) will loose customers.
If we want a large PV deployment, the first step is to reduce the cost in order to get the acceptance of politicians. Afterwards, those will communicate the benefits of PV to the citizens. In many cases, politicians do not have a proper knowledge of PV technology. It is the same case for utilities. Now, in the USA, utilities are starting to see PV as a business opportunity rather than a problem for the grid integration.
It is a task of EPIA and the respective national association to convince politicians about the characteristics, benefits and challenges of PV.
See the workshop video for further information.
Part 2: “European leading markets: Policy up-date”
This second part of the B2B Workshop enabled to make an up-date on the 4 leading European PV markets (Germany, Italy, Spain and France, as well as on the European policy situation).
Hereafter is a summary of the main up-dates made by the panelists:
1. Germany, Dr. Winfried Hoffmann, EPIA Vice-President
Market: in 2007 the annual market was 1100 MW, the German Solar Industry Association (BSW-Solar) estimates it should reach 1350 MW in 2008.
Support mechanism:
As of 2009, the FiT law will change. The main changes are the followings:
The annual digression rate will be as follow:
In addition a “sliding scale” has been defined which foresees that this annual digression rate might be increased or reduced by 1%, depending whether the annual upper or lower market limit (“defined growth corridor”) will have been reached or not. The corridor defined per year is the following:
Therefore in 2009, the FiT will be between 0,3549€/kWh for ground-mounted systems and up-to 0.4301€/kWh.
In addition, the new FiT law (new EEG) sets a new category of FiT for rooftop installations over 1000 kW, in 2009, these will receive 0.33€/kWh. Over more, it foresees that for self-consumed electricity the FiT will be 0.2501€/kWh (instead of 0,4301) and an additional bonus of 0.02€/kWh to reward them for not consuming conventional electricity.
2. Spain, Ernesto Macias, EPIA President
Ernesto Macias made an up-date on the current situation related to the revision of the FiT in Spain.
Market: the market in 2007 was 512 MW and is expected to be over 1000 MW in 2008.
Support Mechanism:
A new decree replacing the current into force (661/2007 from May 2007) is expected to be adopted in September. The current available draft foresees a cap of 300 MW in 2009, with 200 MW for rooftop systems and 100 MW for ground-mounted systems. It foresees two levels of FiT: 0.33€/kWh for integrated systems up to 2 MW size and 0.29 €/kWh for ground-mounted systems.
EPIA as well as ASIF is asking to remove this proposed cap at least for BIPV systems, and to allow at least between 300 MW and 400 MW annual installations for ground-mounted systems. In addition, removing administrative barriers should be favoured within the new decree.
3. Italy, Angelo Nogara, Assosolare
Market: The annual market in 2007 was 50 MW, Assosolare, one of the Italian industry associations estimate the market in 2008 to about 150 MW and 500 MW in 2010.
Support mechanism:
The following table shows the level of FiT received for each type of installations during 20 years:
From 2009 these tariffs are decreasing by 2% and are provided until a limit of 1200 MWp is reached. In addition the installation target for 2016 is 3 GWp and 8.5 GWp by 2020.
The Expected evolutions in the near future are:
- More homogeneity of the procedures at National level
- Toward a less complex bureaucratic procedures
- Priority access for Renewable Energy sources
- Easier procedures for connection of the plants to the grid
4. France, Wael Elamine, SOLER (PV branch of the SER):
Market in 2007: 35.5 MWp (+150 % compared to 2006), overseas departments gathered almost 50% of annual installations. In 2008 the market is estimated to be between 100 and 120 MWp.
Support mechanism:
Existing support is feed-in tariff (FiT), the first one was adopted in 2002, a new FiT was adopted in 2006, until now over 80% of installations are small installations below 3 kWp.
The current installation targets are 1200 MWp by 2012 and 5,4 GWp by 2020. +In addition it is foreseen that from 2020, every building should produce more energy than it consumes.
The current feed-in tariff is structured as follows, each contract is paid for 20 years:
(September 2008 )
Until 2009 a tax credit of 50% on the investment cost also exists for small installations.
Further to the discussion within the Grenelle (French environmental law), it has been agreed the following:
Introduction of a feed-in tariff for semi-integrated PV (on building but not integrated)
Preservation of BIPV feed-in tariff
Increase of ground-mounted power plants feed-in tariff
5. Europe, Adel el Gammal, EPIA Secretary General
Adel El Gammal presented the current policy developments at EU level. In particular he highlighted the expected impact of the future Renewable Energy Sources Directive. This one should be adopted by the end of the year and implemented in EU member states by 2010. This will replace the current directive on the promotion of electricity from renewable energy.
In particular the new directive will introduce/confirm the following elements:
Binding overall national targets for RES by 2020 + trajectory to meet them
Binding priority access to the grid for RES-e
Progress towards removal of administrative barriers
Mandatory use of renewables in new or refurbished buildings
Increased information, training and certification of installers
However, until the adoption of the directive, the following elements need to be further clarified and EPIA will work on making these points clearer:
- Weak enforcement procedures
- Indicative trajectory
- Lack of penalties
- National Action Plans (NAPs):
- need of a template for NAPs
- need to be developed in close consultation with stakeholders
- The European Commission should be able to reject them
- Legally unclear provisions on the transfer of Guarantees of Origin (GoO)
Other issues to pay attention to are:
- Obligation to use minimum levels of RES in buildings
- Binding priority access to the grid
For more details on the schedule and details on the new directive see the presentation attached.
Download presentations here
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