The document discusses promising business models for photovoltaics (PV) in a post-incentive environment. It analyzes experiences from 7 countries and focuses on the primary PV market. New models combine self-consumption for energy savings with PV electricity supply through power purchase agreements and more active consumer involvement. While high self-consumption models are feasible, legislation must not hinder these new approaches. The document provides examples of viable PV projects for multi-family housing, public buildings, commercial facilities, and industrial sites. It also discusses the potential impact of legislative changes on project profitability.
1. The Post-FIT reality:
promising business models
for PV
Riccardo Battisti, Ambiente Italia
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under Grant Agreement No 646554
2. • Private consultancy company in the energy and environment field
• 20 years of activity
• More than 1,500 local, national and international projects
• 30 experts and 4 offices
• PV Financing:
– post-incentive experiences from 7 Countries
(Austria, France, Germany, Italy, Spain, Turkey, United Kingdom)
– Focusing on PV primary market
3. IS PV STILL FEASIBLE TODAY?
YES, WE CAN!
• Price decline
• Reliable and well known technology
• New promising business models / financing schemes combining:
– Self-consumption for energy saving
– PV electricity supply (Power Purchase Agreements, PPAs)
– More active involvement of consumers (equity crowdfunding, energy
cooperatives, «solar bonds», etc.)
4. IS PV STILL FEASIBLE TODAY?
NO, WE CANNOT…
• No more incentives
• Low remuneration of electricity sold to the grid / on the market
• Therefore models relying on high shares of self-consumption
• And then high project risk (too strict connection with the
consumption level)
• General risk of PV legislation: Unreliable and unstable
(even retroactive measures)
• Legislation barriers still hampering the new business models
5. Political risk
Quality issues
Taxes and grid
charges
Minimum
Investment
Limits
Legal costs
Risk of
curtailment
Bankruptcy or
re-location
Barriers
Source: Sonia Dunlop, SolarPower Europe
WHICH BARRIERS?
8. Analysed sectors
• Residential, single-family: No need for «special» business models
• Residential, multi-family
• Office buildings
• Public buildings
• Commercial & shopping malls
• Industrial
9. Multi-family house
Germany
• “Neue Heimat” Cooperative
Family Home in Nußloch
(close to Heidelberg)
• 445 kWp; 370,000 kWh/year
• 116 tenants buy PV
electricity for 25.4 c€/kWh
plus a monthly fee of 6.95 €
• 20-years price stability
guaranteed
• Tenants can also buy shares Source: www.pv-financing.eu
10. • Tenant package: 800 € private loan + two
shares of 100 € each
• Loans are repaid through the following
scheme:
– 3% fixed interest rate
– Payback time: 20 years
– Payback period starts from the third year with a
yearly instalment of about 60 € inclusive of
interest and amortisation
• Plant operator as electricity retailer – i.e.
selling electricity separately to single
households (not possible in other Countries,
e.g. Italy)
Multi-family house
Germany
Source: National PV
implementation guidelines for
Germany, PV Financing project
11. Light Blue: Business share; Blue: Loan level
Light Green: profit shares
Green: Payback including interest and amortisation
Source: www.pv-financing.eu
12. Residential, multi-family
PPA profitability – Italy
• Plant cost: 1,800 €/kWp
• Plant size: 20 kWp
• Yield: 1,275 kWh/kWp (installation site: Central Italy)
• Self-consumption rate: 30% (only for common loads!)
• Not easy to increase it
• Grid electricity price: 0.22 €/kWh
• PPA price: 0.17 €/kWh (23% savings)
• Remuneration by “scambio sul posto” (net-metering): 0.10 €/kWh
• PBT = 13 years
• IRR = 8%
13. Public buildings
+
Attractiveness of PPA solutions for the Public Body
Reliability of the consumer reduces the project risk
-
Complicated procedures for tendering
Low self-consumption rates for some buildings (e.g schools)
14. Industrial
PPA profitability – Italy
• Not parks with multiple users
• Plant cost: 1,000 €/kWp
• Plant size: 1,000 kWp
• Self-consumption rate: 90%
• PPA price: 0.14 €/kWh (18% savings compared to 0.17 for grid electricity)
• No remuneration by “scambio sul posto” (net-metering)
• 70% debt financing with a 7 years loan (interest rate: 7%)
• PBT = 8 years (low…but low enough?)
• IRR = 17%
16. • Annual savings: 5,231 €
• Annual remuneration for “scambio sul posto”: 5,673 € (about
10 c€/kWh)
• Asset amortisation: 4% in 25 years
• PBT: more than 8 years
• Wrong sizing of the plant, too large for the consumption
• A 35 kWp plant would have had a 80% self-consumption rate
Small industrial plant
Self-consumption, Italy
17. L‘Oreal industrial plant
Italy
• 3 MWp PV plant
• Expected yield: 3,600 MWh/year
• Specific yield: 1,200 kWh/year per
kWp
• Self-consumption rate: 100%
• PV output: 30% of the total demand
Source: Qualenergia.it
18. • Investment: 3,000,000 €
(about 1,000 €/kWp)
• Balance sheet finance, no debt
financing
• 20 years contract, including a “take or
pay” provision
• 10% savings with respect to grid price
• Investor also broker for the additional
energy demand of the factory
Source: Enersol
L‘Oreal industrial plant
Italy
19. Commercial sector – SPAR
Austria
• Good load curve (75% in sun hours)
• Two PV systems (176 kWp)
• Crowdfunding towards customers
• 950 € shares (maximum 5)
• 60 €/year through purchase coupons
for 25 years
• Corresponding to 5.1% return rate
plus a portion of the purchase price
• The remaining 400 € will be paid at
the end as coupons or cash
Source: www.pv-financing.eu
20. Arese shopping mall
Italy
• 50% of the common loads covered by PV (1.4 MWp)
• Lighting and space cooling through heat pumps
• Also 2 cogeneration units Source: Qualenergia.it
23. WHAT COULD HAPPEN AFTER?
• Profitability relies on high self-consumption shares
• Is legislation going to make it easier or harder?
+ Extending self-consumption and PPAs to multiple users (AT, FR, no IT)
-Shifting grid charges from the volumetric share to the capacity-based
share, thus making savings less attractive
24. POTENTIAL IMPACT
AN EXAMPLE FROM AUSTRIA
• Amendment of Electricity Act expected by the end of 2016
• Enabling common PV systems for supplying electricity to multiple
users in buildings (residential, office, commercial)
+Increasing possible self-consumption rate
-
– How to organise the billing?
– How to share the PV output among the users?
Source: Mira Teoh, Photovoltaic Austria
25. POTENTIAL IMPACT
AN EXAMPLE FROM AUSTRIA
General
consumption
Unit 3
Unit 2
Unit 1
Meter
Meter
Meter
Meter
inverter
Public grid
Difference
Supply/demand
Source: Mira Teoh, Photovoltaic Austria
26. POTENTIAL IMPACT
AN EXAMPLE FROM AUSTRIA
General consumption Separate systems Common PV system
System size 10 kWp 2 kWp per system 20 kWp
System cost 12,250 EUR 3,600 EUR 21,000 EUR
Self-
consumption
20% 35% 90%
Financing Loan Self-funded Loan
Amortisation 19.5 years 16.82 years 9.81 years
Project
rentability
2.94% 3.55% 10.18%
Source: Mira Teoh, Photovoltaic Austria
27. POTENTIAL IMPACT
AN EXAMPLE FROM ITALY
• Reform of the bill for non-domestic customer (75% of the national
consumption) should be ready by the end of 2016
• 5 scenarios under consultation
• Estimated cut of 0.36÷4.5 billion investments until 2030
• The Energy Authority seems to be oriented towards the 2 «positive»
ones (estimated market decrease: 7÷12%)
• Detailed study is available (in Italian)
Source: eLeMeNS
28. POTENTIAL IMPACT
AN EXAMPLE FROM GERMANY
• Tenant sub-metered electricity supply (TSMES):
– Tenants and owners; Residential and commercial
– No grid charges
– 100% of the EEG levy (6.354 c€/kWh)
• Amendment to the Renewable Energy Sources Act (EEG) in Jan 17
• § 95 no. 2: German Federal Ministry of Economics (BMWi)
authorized to further regulate TSMES
• Reduced EEG levy for PV electricity…?
Source: National PV implementation guidelines for Germany, PV Financing project
29. POTENTIAL IMPACT
AN EXAMPLE FROM GERMANY
Challenges / restrictions:
• No legal claim for implementation
• No deadline
• Residential only
• Using only the building roof
• Possible distinction by installation sizes or user groups
• Opening a potential market of 1 million multi-unit buildings
• A portfolio of projects to increase profitability
Source: National PV implementation guidelines for Germany, PV Financing project
30. AVAILABLE DOCUMENTS AND TOOLS
WWW.PV-FINANCING.EU
AUSTRIA
FRANCE
GERMANY
ITALY
SPAIN
TURKEY
UK
EU LEVEL
33. IS PV STILL FEASIBLE TODAY?
YES, WE CAN!
• Price decline
• Reliable and well known technology
• New promising business models / financing schemes combining:
– Self-consumption for energy saving
– PV electricity supply (Power Purchase Agreements, PPAs)
– More active involvement of consumers (equity crowdfunding, energy
cooperatives, «solar bonds», etc.)
36. MAIN MESSAGES
• Focus on user-oriented models:
– Smaller scale
– Business models involving more roles and stakeholders
– Direct participation of users:
• Financial (crowdfunding, cooperatives)
• Consumption (load management, aggregators for providing grid services)
– Not speculative and highly profitable investment
• “Incentives”:
– Self-consumption will be the incentive
– No significant revenues from selling electricity to the grid
– Additional benefits from grid services
– Financial synergy with other technologies in large projects
– PV is the main competitor…of PV (secondary market)
37. Thanks for your time!
Contacts:
Email: riccardo.battisti@ambienteitalia.it
Website: www.ambienteitalia.it
Linkedin and Facebook: Ambiente Italia S.r.l.
Twitter: @AI_AIP