The Latest Trends From SolarPower Summit 2023

Solar is The Queen of Global Electricity Markets

3 years ago, Fatih Birol said solar was becoming the new King of Global Electricity Markets. Today, it’s going from strength to strength. As highlighted in Birol’s speech, solar energy has now established itself as the Queen of Global Electricity Markets, with several countries reporting record installations in 2022. Solar is a democratic and decentralized source of energy that can bring significant benefits to local communities. However, speeding up the permitting process and considering environmental protection and public perception is critical to ensure the sustainable growth of solar.

Sustainable Regulations

Sustainable regulations are essential for the growth of solar energy. National governments play a critical role in creating an enabling environment for solar, and ambitious renewable energy goals are driving the deployment of solar across Europe.

David Wedepohl, Managing Director of International Affairs at the German Solar Association, highlighted the importance of learning from previous mistakes and referred to the boom and bust of the German photovoltaic market.

Boom

Germany's renewable energy industry experienced rapid growth, reaching up to 40% annually, thanks to the Renewable Energy Act. By 2004, the industry had grown by 100% due to the profitability of solar energy, which was attributed to the above-market feed-in tariff that investors received for generating excess clean energy. This subsidy's impact on Germany's solar industry continued to compound, and the country ultimately became the worldwide leader in installed photovoltaic cell capacity, boasting a cumulative installed capacity of 5.3 GW.

The rapid growth of the German solar industry, driven by subsidies, persisted for several years and received a significant boost from the Energiewende, a critical shift in Germany's energy policy passed in 2011. The Energiewende featured an ambitious plan to reduce greenhouse gases by 80-95% by 2050 and cut CO2 emissions by 40%.

Bust

The incentives, because they were focused on energy production rather than panel manufacturing, also benefited cheaper Asian rivals, which elbowed their way into the market and drove down prices. Furthermore, between 2009 and 2011, Germany significantly decreased tariffs, and by 2012, subsidies for new solar installations were restricted, ultimately crushing the fate of the industry. Cuts in subsidies for solar energy, weaker demand for panels, and fierce competition from cheaper Asian rivals were eating into what was once the world’s biggest hub for the production of solar cells, taking the shine off an industry that was effectively born in Germany.

Conclusion

Since 2017, the amount of funding for renewable electricity was no longer set by the government. Instead, the level of funding has been determined through an auction-based system, which represented a paradigm shift in the system of funding for renewable energy. Small installations were generally exempted from the obligation to take part in the auction process, maintaining stakeholder diversity. In 2020, legal reforms drove growth in German residential PV as home photovoltaic units of up to 30 kilowatt hours were exempt from the Renewable Energy Act. In 2023 Germany introduced the EEG 2023, which represents a major overhaul of energy legislation that has been in place for decades. Its aim is to position Germany for climate neutrality, with plans for a rapid and sustained increase in renewable energy capacity, aiming for a minimum of 80% of gross electricity consumption to be generated by renewables by 2030.

National Deep Dives

The Shining Examples

Germany, Spain, Italy, the Netherlands, and Portugal are leading the way in solar energy deployment. These countries have created an enabling environment for solar through sustainable regulations, government support and funding, and a shift away from non-marketable sources like coal.

The New Hot Markets

Czech, Poland, Bulgaria, Romania, and Austria are emerging as the new hot markets for solar energy. These countries have ambitious renewable energy goals and are looking to solar to drive economic growth and self-dependence.

The Unusual Suspects

Denmark, Ireland, Sweden, and Norway may be the unusual suspects in solar energy deployment, but they are quickly catching up with the rest of Europe. Sweden and Denmark installed respectively 1 and 3 GW in 2022.

Spatial Planning and Permitting Getting Ready for Solar

Spatial planning and permitting are critical to the sustainable growth of solar energy. Engaging with local communities and considering environmental protection and public perception are essential to ensure the successful deployment of solar. There are ways to work with nature through dual land use, such as agri-pv, but it's all about planning.

A concern raised by the industry is that “we don’t have enough experts to do the environmental impact assessments”. The concern relates to data availability, data quality and tools that enable the industry to go to analytics-ready data faster.

Furthermore, the industry highlighted the importance of engaging, as it is important that people can participate. It adds a dimension, puts it in a different perspective, and you take away some of the heat around not being involved”.