Solar energy in Germany –latest developments in one of the world’s lead markets

Jan Knaack, 1. Nov. 2016, Tunis

German Solar Association: Who we are

© BSW-Solar

TASK To represent the solar industry in Germany in the thermal and photovoltaic and storage sector

VISION A sustainable global energy supply provided by solar (renewable) energy

ACTIVITIES Lobbying, political advice, public relations, market observation, standardization

EXPERIENCE Active in the solar energy sector for over 30 years

REPRESENTS More than 800 solar producers, suppliers, wholesalers, installers and other companies active in the solar business from all over the world

HEADQUARTERS Berlin

Equipment Materials System

components Wholesale & Distri-bution

Project Develop-

ment

Con-structio

n O&M

1. Status of Photovoltaics (PV) and electrical storage 1. Market development 2. Technology 3. Support scheme

2. Business models 3. Why choosing German technology / services?

Agenda

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Gross electricity generation in 2015 Solar PV provides 6 % of overall RE production

© BSW-Solar

PV: Declining markets since 2012 annual PV

installations far below government’s “corridor” -

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0

1000

2000

3000

4000

5000

6000

7000

8000

201520142013201220112010200920082007200620052004

Inst

alle

d So

lar P

VCap

acity

(MW

)

>1000 kWp

>100-1000kWp>40-100 kWp

>10-40 kWp

Source: BNetzA, BSW-Solar

Market data Photovoltaics in Germany 2015* Newly installed capacity: 1,460 MWp Total installed capacity: 39,700 MWp Solar power produced** 38,000 GWh Number of systems installed: 1.53 million Contribution to the electricity mix: 6%

* rounded ** preliminary Source: BSW-Solar, BNetzA, EEX

Political min goal: 2,5 GW/a

PV market segments – shares of newly installed capacity Image: Sharp

Size of PV-Systems Gro

und-

mou

tned

R

ooft

op

B

IPV

Effort in Installation

Image: Solarwatt

Single- / double family houses 1-10 kWp Multi-dwelling, public

buildings, agricultural 10-100 kWp

Image: Solarwatt

Image: Sharp

Image: BP

Large commercial / industrial> 100 kWp

Image: Schüco

Image: Geosol Image: Geosol

Image: Grammer

19% 15%

36% Estimated market shares in 2015

<1%

30%

Source: Bundesnetzagentur, BSW-Solar

Ground mounted

Basic principles of EEG (“Erneuerbare-Energien-Gesetz”): Differentiated, above market, long-term and regularly adjusted feed-in

tariffs depending on renewable source and capacity, payment obligation for grid operators for power fed into their grid, Priority feed-in and grid connection rights, Reallocation of system costs managed by the transmission system operators

using the “EEG surcharge” (EEG-Umlage) for electricity consumers, special equalisation scheme for certain consumer groups.

Recently, the law was supplemented with changing targets, “breathing caps”, a market premium support system with compulsory direct-marketing of generated elec. and special rules for auto-generators and… competitive bidding processes (auctions) to determine the financial support for new freestanding photovoltaic (PV) installations (EEG 2014) and roof-top installations (EEG 2017).

Promoting the generation of electricity using renewable energy sources

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Challenge: How to cope with fluctuating energy production?

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14. Oct. 2016 14. Sept. 2016

Sour

ce :

SMA

Nearly every 2nd PV system up to 10 kwp equipped with storage in Dec. 2015

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0%

10%

20%

30%

40%

50%

60%

0

10.000

20.000

30.000

40.000

50.000

Sha

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stal

latio

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App

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r KfW

fund

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KfW-Programm Erneuerbare Energien "Speicher" Installed PV systems to 10 kWp

Approved applications for KfW storage funding

Percentage of approved funding applications of new PVinstallatiion to 10 kWp

* Figures for 2015 are preliminary Source: KfW; status 1/2016

Signal of government via incentive programme accelerated the market •Total cumulated market to date: 30,000 units in 2.5 years •Storages have to be grid-servicing, enlarging PV connection capacity

German storage market has expanded rapidly since 2013

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10

2730

~ 2700 5561

~ 5000 10609

~ 7000

Ann

ual u

nits

sol

d / G

erm

any

2013 2014 2015

Funded by the state program Without funding

Prices for storage decline further

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• Prices for storage systems have fallen by 27 / 29 percent since 2013.

100,0

102,3

105,2

80,3

71,2 72,8 71,0

105,4

104,4

84,3 80,0 77,6

73,2

50,0

60,0

70,0

80,0

90,0

100,0

110,0

1st semester 2013 2nd semester2013

1st semester 2014 2nd semester2014

1st semester 2015 2nd semester2015

1st semester 2016

lead storage systems

lithium storage systems

n=38 n=21

Price index battery storage systems by technology - 10 kWh systems

Start: 1st semester 2013 = 100% Note: The price index for respective storage technology is calculated based on average storage unit price (up to 10 kWh). Source: BSW-Solar, 5/2016

To enhance the sales volume of grid assistive battery storage technologies and to contribute to cost reduction as well as further technological development With this purpose developed products and installed storage capacities at the low voltage level offer a huge potential for a better integration of increasing solar power feed-in

Duration: 1.3.2016 – 31.12.2018 Budget: 30 millions of euros PV systems up to 30 kWp eligible operated by the state-owned KfW Bank

Incentive for installation of storages

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EU Project PV GRID (2014): technical options were identified, compared and examined for regulatory barriers, Aim: reduce barriers for a more efficient grid integration of PV

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1

3

1. Status of Photovoltaics (PV) and electrical storage 1. Market development 2. Technology 3. Support scheme

2. Business models 3. Why choosing German technology / services?

Agenda

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Self-consumption is the most important pillar for future business models…

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15

0

10

20

30

40

50

0

1000

2000

3000

4000

5000

Elec

trici

ty p

rice

and

Feed

-in T

ariff

in C

ent/k

Wh

Syst

em p

rices

in E

uro/

kWp

system prices [€/kWp] < 10 kWp electricity price household [Ct/kWp]FiT <10 kWp [Ct/kWp]

prognosis

Sources: BSW-Solar, BNetzA, BDEW

…though not the only one Further business models for PV installations

© BSW-Solar

Model Type I Type II Self-consumption models

Classical purchase of the installation

Leasing models

Power purchase agreements

Plant operator serving one client

Plant operator serving several clients

“Efficiency”-business models

Energy saving ordinance Heating with PV

• Dynamic business environment due to decreasing FiT. • Increasing complexity of processes and technologies. • Utilities are changing their business models after years of wait & see.

They adapt PV business models in order to keep customers. • Next major trend: Providing cheap electricity for new consumer

groups.

Future business model: Providing electricity for tenants

© BSW-Solar

• Social dimension of energy transition: All citizens should benefit in theory, but benefits have not been shared equally so far.

• Concept: tenants are buying electricity produced on site through photovoltaics and delivered without using public grids.

• Aim: Reducing the households energy bills, especially in multi-family houses providing cheap electricity from PV installations.

• Numerous projects carried out, but still a market niche: Currently the projects are not economically viable, due to EEG surcharge.

• Considerable market potential in Germany: 18 Mio. residential buildings, 3 Mio. multi-family buildings (theoretical potential).

• EEG 2017: Legislator has paved the way for extensive roll-out: In future tenants will pay a reduced EEG surcharge for electricity.

• Market outlook: Dynamic market increase in the segment expected from Jan 1st on. (new EEG in effect)

Possible business models for storages Business models sometimes hampered by current law

© BSW-Solar

Services for the grid (power ancillary services)

Services for the operation of the business

Primary and secondary control power and minutes reserve

Self consumption

Voltage maintenance Emergency power supply

Frequency stability maintenance Load-shifting

Reactive power compensation Peak-shaving

Black start capability Uninterrupted power supply

• Government recognizes necessity to extend the range of eligible technologies for power ancillary services.

• Renewable energy industry intensely cooperates with grid operators and utilities in the field of system integration.

1. Status of Photovoltaics (PV) and electrical storage 1. Market development 2. Technology 3. Support scheme

2. Business models 3. Why choosing German technology / services?

Agenda

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20

R&D and manufacturing are still a leading source of German technology (Germany Trade & Invest, 2015)

www.gtai.de

Qualification & Installation practices have high impact on costs

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Benchmarking Study RMI: REDUCING SOLAR PV SOFT COSTS A FOCUS ON INSTALLATION LABOR

Reasons for differences: • Qualification • Administrative

procedures • Building &

electrical standards

What can German companies offer?

© BSW-Solar

• All Solar solutions needed for utility-scale and residential PV : modules, inverters, components, batteries, EPC-services, O&M services

• Quality products that are designed for a long life time at very low maintenance costs that undergo some of the strictest testing requirements in the world.

• Knowledge and a lot of experience around marketing, sales, installation, maintenance and in qualifying and training your staff.

• Not only state-of-the art but also innovative and reliable technology with long warranties.

Use BSW-Solar for a gateway to Tunisio-German solar business! www.solarwirtschaft.de

Upstream Business in BSW-Solar (sample companies)

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Equipment Materials System components

Wholesale & Distri-bution

Project Develop-

ment

Con-structio

n O&M

Find companies at BSW-Solar: www.solarwirtschaft.de/en or at Germany Trade and Invest (GTAI): http://www.gtai.de/GTAI/Navigation/DE/Invest/Industries/Energy-environment-resources/solar.html

Equipment Materials System components

Wholesale & Distri-bution

Project Develop-

ment

Con-structio

n O&M

Downstream capacities for emerging solar markets (sample companies)

Find companies at BSW-Solar: www.solarwirtschaft.de/en or at Germany Trade and Invest (GTAI): http://www.gtai.de/GTAI/Navigation/DE/Invest/Industries/Energy-environment-resources/solar.html

Enabling PV in the MENA-Region - The case of Tunisia, 2014 „Opportunities for solar thermal systems in the tertiary and industrial sectors in Tunisia”, 2016

What do we do in Tunisia?

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Activities: 1. March – 31. December 2016, Support by GIZ / support by Energy Partnerships in 2 project steps Goal: Support the „Chambre Syndicale Nationale des Intégrateurs en Photovoltaique »(CSPV) Activities: 1.Business plan deployment 2. Analysis / development of norms / standards

1. Description of most important norms / standards! 2. Opportunity for companies to display their profile in a brochure!

1. Small profile - Free of charge for CSPV + BSW-Solar members 2. Bigger profile – very good rates! If interested, please contact knaack@bsw-solar.de

Currently: Partnership BSW-Solar and CSPV in Tunisia

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Solar-Business.com: Matches companies from solar associations around the world.

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Only for members of partner associations Connecting serious requests for projects, partners and products Soft Launch today

www.solar-business.com

- Germany has more than 30 years of experience with Renewable Energies Technologies

- Solar technologies are an important source of energy provision and will be (together with wind) the dominant power and heat producing sources.

- With high penetration technical and economic challenges for the heat provision, grid, storage, distribution, O&M and marketing and sales have to be tackled – Germany has some experience here.

- German companies can provide systemic, high quality energy solutions for customers in the heat and electricity sector!

- Use BSW-Solar & CSPV & AHK as gateway to contact new business partners!

Conclusions

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What can German companies offer?

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• Solutions to provide and manage your electricity grid reliably with electric energy from solar PV and / or hybrid sources!

• Quality products that are designed for a long life time at very low maintenance costs that undergo some of the strictest testing requirements in the world!

• Low-cost products related to life-cycle • Knowledge and a lot of experience around marketing, sales, installation and

maintenance! • Experience in qualifying and training your staff! • Not only state-of-the art but also innovative and reliable technology with long

warranties! • Often 20 or more years of experience with grid connected or off-grid solar

applications!

© BSW-Solar 24/01/2013 29 Source: Solarmarkt

Thank you for your attention… Jan Michael Knaack Senior Project Manager International Affairs / Research knaack@bsw-solar.de