Linking Solar With Energy Storage and EV Technologies

on July 30, 2020

Shifting tides of investment

Solar power has become a given element of the world’s energy systems. However, investment trends are constantly changing thanks to evolving technologies, lower costs, and new remuneration policy mechanisms supporting energy development. Such a dominant trend is exemplified by the phase out of old, stable remuneration schemes, which are being replaced by more dynamic mechanisms that not only value the output of electricity generation but also the management and operation of the energy technology.

Britain and Germany, for example, are two of the top four solar PV and EV markets in Europe. The United Kingdom ended all residential solar PV subsidies on March 31, 2019, replacing the old feed-in tariff (FiT) policy with the so-called smart export guarantee (SEG) scheme. Launched January 2020, the new market-led scheme requires that all electricity suppliers with at least 150,000 retail electricity customers to offer at least one SEG tariff to new residential PV systems. The government does not prescribe the tariff rate, type, or duration, but the purchase tariff must offer a rate per kWh of export above zero at all times, thus providing income for households’ surplus solar – differing from the past FiT system where generators were paid for all electricity they generated. The United Kingdom has approximately 3 GW of rooftop PV capacity installed for projects under 10 kW in size.

In Germany, 581 MW of solar capacity of projects up to 10 kW were added in 2019, while German market research institute EuPD Research recently surveyed more than 1,000 homeowners and found that 20% of them are actively making decisions to invest in solar PV. Survey participants said that they were motivated to invest in PV to reduce their electricity costs while contributing to the protection of the environment, but also to benefit from the state-guaranteed FiT.

Germany recently had a cap of 52 GW on the subsidy, which EuPD Research suggested would be reached by July 2020. Once the cap was hit, no new PV systems under 750 kW would be eligible for the subsidy. In May 2020, Germany’s government abolished the photovoltaic cap and the country’s residential and commercial PV sector is now waiting for the new measure to be implemented.

Other countries, such as Italy and Greece, replaced their FiT schemes many years ago with retail net metering (NEM) mechanisms that issue credits to electricity generators for the power they supply to the grid. Other countries, such as Portugal, have opted for self-consumption schemes that are similar to NEM policies but typically do not allow electricity credit transfers. Non-FiT mechanisms tend to reward residential solar generators based on market indicators, such as the electricity wholesale rate and retail prices in a given electricity market. In this expanding financial policy landscape, can solar PV systems develop in tandem with energy storage and EV technologies to enable the transition towards decarbonization?

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