Joint Research Centre

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1 Joint Research Centre The European Commission s in-house science service Serving society Stimulating innovation Supporting legislation

2 PV Electricity Costs across Europe, net metering or self consumption? Thomas Huld, Arnulf Jäger-Waldau, Heinz Ossenbrink, Sandor Szabo, Ewan Dunlop, Nigel Taylor European Commission, Joint Research Centre, Ispra, Italy

3 Overview of presentation Method for calculating PV electricity costs Input data Maps of PV performance and electricity costs Comparison with domestic electricity prices Briefly on the scope for self-consumption

4 Calculating PV electricity costs Calculation of the costs of PV-generated electricity requires knowledge of the annual electricity production. This in turn depends on the incoming solar radiation as well as other factors such as the air temperature. Once the PV energy production is known, the PV electricity cost then depends on the PV system price, lifetime, as well as the cost of financing and maintenance.

5 Data sources for PV energy output estimate Irradiation data calculated from satellite by the CM SAF collaboration and JRC Ispra Hourly time resolution Spatial resolution around 3-5km Temperature and wind speed data from ECMWF ( operational forecast data 3-hourly time resolution, linear interpolation to hourly values Spatial resolution latitude/longitude (~14km) Vertical downscaling applied to temperature (Huld & Pinedo Pascua, accepted for publication in Energies ) Module power measurements mainly by the ESTI Laboratory

6 Annual irradiation, optimal angle, kwh/m2

7 PV system cost calculation PV electricity cost is calculated according to the Levelized Cost Of Energy concept, developed by NREL in the U.S.: Here, n is the number of years, I t is the investment in year t, M t is the maintenance cost in year t, E t is the electricity production in year t and r is the discount (interest) rate. Assumptions used here are: System cost 1400 /kwp + local VAT, 2% p.a. maintenance, 20 years financial lifetime (yes, the system can last longer than that).

8 PV electricity price maps, two scenarios 5% p.a. interest 0% p.a. interest

9 Difference between PV and grid price 5% p.a. interest 0% p.a. interest

10 Problems with the cost comparison The cost analysis presented here assumes either: Net metering: you can deliver excess energy to the grid and consume the same amount later, with no penalty Or Complete self-consumption, all PV energy is consumed instantly If this is not the case, the calculations could be made with partial self-consumption, perhaps with some lower price paid for electricity delivered to the grid, and/or for systems using battery storage.

11 Possibilities for self-consumption We have performed a little study using consumption data for 140 households in Ulm, Germany (collaboration with Hochschule Ulm). The PV production was calculated for different PV system sizes and compared with consumption to calculate the self-consumption from PV. The study was performed for systems without battery and for different amounts of battery storage

12 Self-consumption of PV electricity No battery storage With battery, PV=1/2 consumption

13 Possible improvements Add information about price paid for electricity that is not self-consumed (this may vary rapidly) Get consumption data for more locations in Europe, to better understand the scope for self-consumption Investigate the possibility of using battery storage, either at the individual household level or maybe at substation level. This requires reliable information about the cost of such systems.

14 Thank you for your patience!

15 Any questions?

16 Links and references PVGIS: re.jrc.ec.europa.eu/pvgis/apps4/pvest.php References: Huld, T. Jäger-Waldau, A., Ossenbrink, H., Szabo, S., Dunlop, E., Taylor, N. Cost maps for unsubsidised photovoltaic electricity, Joint Research Centre Report JRC (2014) Huld T., Müller, R., Gambardella, A. A new solar radiation database for estimating PV performance in Europe and Asia. Solar Energy, 86, (2012) Gracia Amillo, A., Huld T., Müller, R. A new database of global and direct solar radiation using eastern Meteosat satellite, models and validation. Remote Sensing, 6, (2014) Huld, T., Ruf, H., Heilscher G. Self-consumption of electricity by households, effects of PV system size and battery storage, Proc. 29 th European Photovoltaic Solar Energy Conference, Amsterdam, NL (2014)

17 Policy Background 2008 Directive on promotion of the use of energy from renewable sources (including the 2020 targets) 2014 Juncker Commission political priorities: ".. Europe to become the world number one in renewable energies.." 2014 EU agrees a framework for 2030 climate and energy policies, including a target of at least 27% for renewable energy and energy savings. Feb 2015 Commission proposes the Energy Union, COM(2015)80. Aim: significantly reduce Europe s reliance on fossil fuels by removing barriers to the flow of energy, in a fully integrated EUwide energy system