Support Schemes for PV in Europe EPIA Denis Thomas 1
Presentation overview 1. Main PV support schemes in Europe 2. Support policy vs. Market development: case studies 1. Germany 2. Spain 3. Italy 3. Conclusions 2
Untill it reaches competitiveness, PV still needs strong political support 3
MAIN PV SUPPORT SCHEMES IN EUROPE 4
Origins and structure of support schemes Investment based mechanisms Investment subsidies Tax incentives (VAT, tax credits ) Low interest loans Quota systems Tendering Tradable green certificates Fixed price systems Feed-in Tariffs Premium Feed-in Tariffs Self-consumption (and net-metering) dependant from governmental money 5
GC Green certificates Green certificates MARKET Green electricity producers Electricity suppliers Traditionnal electricity producers Electricity Grid Final clients Energy regulator GC quota If not fulfilled penalties in /missing GC 6
Green certificates - comments Complex mechanism Incentive per kwh in dependant on GC price insecurity for investors Competition between renewables no guarantee of a mix of different technologies 7
Feed-in Tariff DC-AC Inverter Electrical appliances DC AC Electrical distribution board kwp kwh PV generator Injection electricity meter kwh Consumption electricity meter Source: EPIA Feed-in Tariff Electrical network Electricity bill 8
Premium Feed-in Tariff Production electricity meter Electrical appliances DC AC Electrical distribution board kwp kva PV generator DC-AC Inverter Consumption/ injection electricity meter or kwh Source: EPIA Premium Feed-in Tariff Electrical network Reduced electricity bill 9
Feed-in Tariffs core elements Provide «Sound» IRR Provide investor security Simple and easy to implement Low administrative barriers Cost effective Easy to control Drive PV system prices down independant from governmental money 10
SUPPORT POLICIES VS MARKET DEVELOPMENT: CASE STUDIES 11
Historical development of the Global annual PV market per Region Source: EPIA 12
Europe: Global PV Market Leader Source: EPIA 13
GERMANY 14
Annual PV market in Germany FiT revision 1.600 1.500 1.400 1.200 1.100 1.000 FiT revision 850 850 MW 800 600 600 400 1,000 roofs programm 1,000,000 roofs programm FiT 200-150 78 80 40 3 3 3 3 4 7 12 10 12 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Sources: BSW, EPIA 15
Germany I Feed-in Tariff Rooftop Ground-mounted installations 30 kw > 30 kw > 100 kw > 1.000 kw All sizes Degression rate /kwh Degression rate /kwh Degression rate /kwh Degression rate /kwh Degression rate /kwh 2009 8% 0.4301 8% 0.4091 10% 0.3958 25% 0.3300 10% 0.3194 2010 8% 0.3957 8% 0.3764 10% 0.3562 10% 0.2970 10% 0.2875 2011 9% 0.3601 9% 0.3425 9% 0.3242 9% 0.2703 9% 0.2616 NB: without adjustments from the growth corridor For PV systems up to 30 kwp, the producers have the possibility to auto consume the electricity they produce. In this case, they receive a premium feed-in tariff of 0.2501 /kwh for 2009 for the self consumed PV electricity. FIT are granted for 20 years. If the growth of the PV market (new installations) in a year is stronger or weaker than the defined growth corridor, the degression in the following year will increase or decrease a percentage point respectively: Growth corridor Degression 2009 2010 2011 Upper limit in MWp Above: +1% 1,500 1,700 1,900 Lower limit in MWp Below: -1% 100 1,100 1,200 16
Annual market and FIT growth corridor - Germany 17
Germany II Further support programs Tax incentives Investment costs for commercial systems (incl. Planning and installation) can be depreciated over a 20 year period and other costs can be considered as operations cost Commercial systems are VAT exempted (VAT is at 19% in Germany) In exceptional cases for some commercial systems which operate closely to producing or manufacturing facilities 12.5-27.5 % of investment can be claimed as tax credit Beneficial credit terms KFW Program Solarstrom Erzeugen (No. 140) for private investors: Up to 100% invest, max 50,000, up to 10 years with 1-2 years free of redemption or up to 20 years with up to 3 years free of redemption at nominal interest rates of 4.15-4.45% depending on duration, except investors under direct supervision of local authorities KFW ERP-Umwelt- und Energiesparprogramm for commercial investors: 50% for SMEs, other companies up to 35% of max. 500,000 invest (in old federal states) alternatively 1 Mio. Invest (in new federal states), duration 10 years with 2 years free of redemption (in old federal states) alternatively 15 years with 5 years free of redemption, nominal interest rates between 4-7% (depending on location, duration and credit risk evaluation) KFW Umweltprogramm for commercial investors: 75% of invest of max 10 mio. per Installation 96% net payment, up to 20 years duration, with up to 3 years free of redemption, nominal interest rates between 4-7.72% Investment grant Some regional programs exist 18
EPIA Market Outlook: Germany Source: EPIA 19
Germany: key learnings Continuous growth of the PV market and PV sector Low administrative barriers (procedure last ~1 month) Stable legal conditions for investors Good equilibrium between the various business segments Powerful indsutry with high quality and competitive products > direct 45 000 jobs 20
SPAIN 21
Annual PV market in Spain 3.000 2.661 2.500 2.000 One year with the same conditions as in 2007 MW 1.500 1.000 500-2 9 10 6 27 100 2001 2002 2003 2004 2005 2006 2007 2008 Sources: CNE, IEAPVPS, ASIF, EPIA CAP 559 22
Spain 2009 Feed-in tariffs Tariff and Cap Variation Type I - Rooftop Power plan limit size Tariff 2009 CAP 2009 CAP 2010 CAP 2011 25 years duration. Fix rate <20 kw 0.34 /kwh 27 MW 30 MW 33 MW 2 MW >20 kw 0.32 /kwh 240 MW 265 MW 292 MW Type I CAP 267 MW 295 MW 325 MW Type II Ground-mounted 10 MW 0.32 /kwh 233 MW (133+100) 207 MW (133+60) 162 MW Total CAP 500 502 488 Tariffs and caps are adjusted quarterly according to demand in previous quarter: If at least 75% of the cap for the previous quarter is reached, rates decrease by a maximum of 2.5%, and the cap is increased by the same amount. Conversely, if less than 50% of the cap is reached, rates increase and caps decrease by the same amount. If between 50 and 75% of the caps are reached, incentive levels and caps remain the same. The annual digression rate is capped at 10%. Annual caps adjust in inverse proportion to digression (e. g. If rates decrease by 8%, caps will increase by 8%). Tax Incentives Law 35/2006 establishes a tax rebate of 6% (2008), 4% (2009), 2% (2010) from the annual benefits of the PV system. 23
EPIA Market forecast: Spain Source: EPIA 24
Spain: key learnings Overheated market High potential High FiT Very strong market development in 2008 Spanish industry unable to fulfil market demand high imports The government set a cap limitation The biggest PV market reduced from 2.5 GW in 2008 to ~0.5 GW in 2009 Damaged reputation of PV in Spain (media ) Low PV awareness 25
ITALY 26
Historical development of cumulative PV power installed in Italy Sources: GSE, IEA PVPS, GIFI, Assosolare, EPIA 27
Italy 2009 BIPV BAPV Non integrated 1-3 kwp 0.48 /kwh 0.43 /kwh 0.39 /kwh >3 20 kwp 0.45 /kwh 0.41 /kwh 0.37 /kwh > 20 kwp 0.43 /kwh 0.39 /kwh 0.35 /kwh Feed-in tariff FIT is paid over 20 years. There are bonuses, not cumulative, equal to a 5% premium are provided in the some specific cases: 2% annual degression of the tariffs The maximum cumulative power that can be supported by the Conto Energia is 1200 MW. However, the plants that will enter into force no later than 14 months - for private owners - and 24 months - for public owners - after the reaching of the cap they will benefit from both the tariffs and the premium. The target set by the government is 3,000 MW by 2016; Net metering Net-metering scambio sul posto does not provide for direct payments. The PV system owner can valorise the electricity he produces himself at the same price as the electricity he consumes traditionally from the grid. If, over a time period, there is an excess of electricity fed into the grid, the PV system owner gets a credit (unlimited in time) for the value of the excess of electricity. Net metering is limited to PV systems under 200 kwp. Tax credits Reduction of VAT from 20% to 10% Reduction in property tax that amounts to less than 4 per mille 28
EPIA PV Market Outlook: Italy Source: EPIA 29
Italian PV Market in 2009 2009 Source: GSE, April 2009 (provisionnal data) 30
CONCLUSIONS 31
Overview of main Feed-in Tariff and Green certificate schemes in Europe Country Main support scheme Ground mounted BIPV BAPV Duration Cap Cumulative PV Power installed (end 2008) France FiT 0.32-0.43 0.60 0.32-0.43 20-87 MW Germany FiT 0.32 0.33 0.43 20-5,308 MW Italy FiT 0.35 0.39 0.43 0.48 0.39-0.43 20 1200 MW 430 MW Switzerland FiT 0.30-0.40 0.38-0.56 0.37-0.46 25 16 Mio CHF 46 MW Austria FiT 0.30-0.46 10+1+1 3.3 MW/year 30 MW Belgium GC Brussels: 0.15-0.65 Wallonia: 0.15-0.63 Flanders: 0.45 Brussels 10 Wallonia 15 Flanders : 20-71 MW Bulgaria FiT 0.38-0.42 25-1.4 MW Czeck Republic FiT 0.48-0.49 20-54 MW Greece FiT 0.40-0.50 20-20 MW Luxembourg FiT 0.36-0.39 15 5MW 24 MW Netherlands FiT 0.29 15 15 MW (2009) 59 MW Portugal FiT 0.62 5+10 12 MW 68 MW Romania GC 0.11 0.22 10 0.45 MW Slovenia FiT 0.33-0.37 5+5+10-2.1 MW Spain FiT 0.32 0.34 25 500 MW (2009) 3,137 MW UK GC 0.03-0.06 lifetime 24.1 MW Source: www.epia.org 32
EPIA National PV profiles 33
Key Learning Government and industry commitment Importance of stimulating national market AND industry Well designed support schemes Sustainable Forecastable Reasonable Guaranteed in time Should encourage price degression Low administrative barriers Permits, support schemes Grid-connection Regional susbidies for PV companies Solar Valley 34
www.epia.org publications 35
Thank you for your attention 36
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