Self-consumption of solar energy is on the rise as Feed-in Tariffs decline and electricity prices go up. This is an interesting option, not only for house-owners, but also for companies and communities as the case of the AmeyCespa waste treatment plant shows. Power Purchase Agreements are one way to use the energy of the sun without having to deal with a high initial investment.
Grid parity is already a reality in several European countries. A study of the PV Parity Project, supported by the European Commission, which was published in November 2012, investigated the situation of photovoltaic electricity generation in eleven countries and concluded that grid parity has been reached already in some regions in Germany, Italy, Spain and the Netherlands. For Great Britain, as well as France, Greece and the Czech Republic, the report predicts grid parity by the end of the decade.
The International Renewable Energy Agency (IRENA) has come to similar conclusions in a paper about the price development of renewable energies, published nearly at the same time. It states that the price for photovoltaic modules has fallen by 60 per cent between 2010 and 2012. The installed costs of residential PV systems have dropped by a similar rate in some countries. Together with two other factors – rising electricity prices in many countries combined with falling feed-in-tariffs for grid-connected PV power plants – the self-consumption of the produced energy is becoming an increasingly attractive option for plant owners.
Until now, one barrier for house-owners is that they would need a battery storage system in order to be able to consume a significant part of their own electricity. However, the investment costs for the battery raise the overall price of the self-produced energy. Nevertheless, according to Prof. Volker Quaschning, a German PV expert, this could change during the next three to four years for Germany, with dropping prices for storage systems. He sees a potential of 35.000MW of newly installed residential PV plants that would be profitable without any monetary compensation. The Spanish Solar Society already has presented a strategy for the promotion of self-consumption.
The demand profile of companies is different and even more favourable for the use of self-produced solar energy. In contrast to households, which use energy mostly in the evening, their main energy consumption falls together with the hours in which photovoltaic plants produce most of their energy. So the use of storage systems is not relevant here in most cases, especially for companies who use electricity 24/7 because of running production machines, air conditioning, emergency lighting or similar devices. The calculation for the use of a PV plant is also different for enterprises than for individual consumers. Companies often have special electricity tariffs that are far cheaper than those that are offered to households. Therefore, self-consumption has become a topic for them only more recently, with falling module prices and rising uncertainty regarding the future energy offer from fossil fuels. But also another factor is of greater importance for enterprises than for individual customers: planning reliability.
It is not even necessary that the company invests in and owns the PV plant providing its electricity. Via a Power Purchase Agreement (PPA), a third-party developer, who owns, operates and maintains the system, sells the produced electricity to the host customer, who in most cases agrees to the construction of the plant on its property, e.g. on the roof of the company building. This financial agreement has a number of advantages, from the lack of up-front capital costs via the monetization of tax incentives to the absence of maintenance responsibilities – all reducing the risk for the host of the PV plant.
