PV in Germany technologies, market segments and business models Olivier Drücke, BSW 14.11.2017 Mexico City
Agenda 1) The German Solar Industry Association BSW 2) Solar / RE markets statistical snapshots and business climate 3) German power mix and macro-economic effects of Solar & RE 4) The German PV pioneer market still sets major innovative trends 5) Business trends for residential / industrial / commercial sectors 6) Conclusions 06.11.2017 Page 2
Olivier Drücke International Energy Transition Consultant Active since 28 years in the German, European and worldwide energy transition (see Linkedin) Representing the BSW at this Mexico conference Studied European Business Administration Focusing on solar energy technologies, policy, market development, strategy, sales, marketing and communication Working as corporate / municipal / governmental consultant on renewables & energy efficiency and for international development organizations Member of the board of SOLAR23 GmbH 06.11.2017 Page 3
German Solar Industry Association TASK VISION ACTIVITIES EXPERIENCE REPRESENTS HEADQUARTERS To represent the solar industry in Germany in the thermal and photovoltaic and storage sector A sustainable global energy supply provided by solar (renewable) energy Lobbying, political advice, public relations, market observation, standardization Active in the solar energy sector for over 30 years More than 800 solar producers, suppliers, wholesalers, installers and other companies active in the solar business from all over the world Berlin Equipment Materials System components Wholesale & Distribution Project Development Constructi on O&M BSW-Solar
Upstream Business in BSW-Solar (sample companies) Equipment Materials System components Wholesale & Distribution Project Development Constructi on 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 BSW-Solar
Downstream capacities for emerging solar markets (sample companies) Equipment Materials System components Wholesale & Distribution Project Development Constructi on 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
BSW-Solar: Working world wide to improve frameworks for the use of solar energy! Partnerships, business networks Projects, Market reports, esp. Enabling PV both BSW-Solar
Solar-Business.com: Matches solar companies with requests for projects, partners around the world Only for members of partner associations Connecting serious requests for projects, partners and products www.solar-business.com BSW-Solar
Capacities & generation of the German RE power plant park 06.11.2017 Page 9
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The overwhelming acceptance was jeopardized by collectivisation of energy transition costs The support system is not so much based on subsidies, but rather on cost sharing by all energy consumers through an increase of electricity costs per kwh. 06.11.2017 Page 11
Boom & bust cycle before auctions started in 2015 TT.MM.JJJJ Seite 12
Newly installed capacity in kwp Ground mounted PV halved in 2016 Tenders first meant a strong decline of market volumes Ground mounted PV 600000 500000 400000-50% 2015 2016 300000 200000 100000 0 kwp Source: BSW-Solar, BNetzA; status 1/2017 TT.MM.JJJJ Seite 13
Rates of realization in % weighted average price (Cent/kWh) Pilot tenders: High realization rates expected Expected quotas: >90 percent; 1 st round more than 94 percent! 100% 90% 80% BNetzA; May 2017 & August 2017 10 9 70% 8 60% 50% 7 40% 30% 6 20% 5 10% 0% 1st round 2nd round 3rd round 4th round 5th round 6th round (157 MW) (160 MW) (204 MW) (128 MW) (130 MW) (163 MW) 4 1st round (157 MW) 2nd round (160 MW) 3rd round (204 MW) 4th round (128 MW) 5th round (130 MW) 6th round (163 MW) 1st round EEG 2017 (200 MW) Source: BSW-Solar, BNetzA; 5/2017 Source: BSW-Solar, BNetzA; 5/2017 TT.MM.JJJJ Seite 14
The German power generation mix in 2016/17 06.11.2017 Page 15
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Renewable heat/cold still is the underdog of energy transition 31% 20% electricity heating transport 49% Final energy consumption in the EU 06.11.2017 Page 17
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350.000 jobs in Germany, 10 millions worldwide Source: IRENA, 2017 06.11.2017 Page 19
Germany still leads the world in per capita installed solar power capacity TT.MM.JJJJ Seite 20
Germany is among the top 5 nations in Solar Thermal / No. 8 in per capita installations TT.MM.JJJJ Seite 21
Optimistic business climate in PV sector is back Highest index level in seven years! 160 Business climate index "Photovoltaics" 140 120 100 80 60 40 129.3 120.6 115.9 109.3 104.5 96.1 132.6 127.7 132.2 124.2 125.6 127.1 110.1 106.3 117.3 115.4 96.7 79.2 112.8 97.2 89.9 106.6 78.7 57.3 64.9 61.9 65.2 59.0 55.7 50.9 95.9 90.7 70.3 68.0 52.2 52.0 35.5 40.8 122.9 83.8 95.9 20 0 Q1 2005 Q3 2005 Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Business climate index moving average (6Q) Measurements since Q1 2005; 2011 = 100 As of Q4/2011 BSW-Solar internal calculations, previously EuPD, Control sample: Companies from value chain stages production, commerce and installation TT.MM.JJJJ Seite 22
Newly installed capacity in MW 2017: Positive outlook, but government targets missed Increasing installations expected (up to +30 percent) 3500 3000 Government targets 2500 2000 1500 1000 500 0 2014 2015 2016 2017* * Expected installation in 2017: 1.600 up to 2.000 MWp Source: BNetzA, BSW-Solar 5/2017 TT.MM.JJJJ Seite 23
Success factors & trends for the German PV Market Attractive: Self Consumption New Business Models Tenant Solar Sinking System Prices New Market Actors Real Estate Companies, Municipalities Trend towards E-Mobility Falling Prices for Solar Batteries BSW-Solar TT.MM.JJJJ Seite 24
PV Investments grow noticably in the segments of private homes and the commercial sector TT.MM.JJJJ Seite 25
Self-consumption is the most important pillar of new business models TT.MM.JJJJ Seite 26
Trends in the residential market: Energy autonomy and smart components New buildings: Single-family houses Highly energy efficient buildings Combination with other technologies (heat pump / solar thermal / heating) Optimized PV-systems for self consumption Storage systems become the norm Smart controls of loads via the internet and smart demand Plug-Ins for E-Mobility slowly become an integral part of the building TT.MM.JJJJ Seite 27
Energy autarchy in the house: 100 % coverage of heat and power with smart RE systems Heated area: 162 m², heating need 12,000 kwh/a, primary energy need 1500 kwh / a = 9 kwh/m²a, electricity need 2000 kwh / a TT.MM.JJJJ Seite 28
Number of installed battery storage units/ approved funding applications Share of new installed PV systems in combination with home storage systems Around 40% of new PV systems combined with batteries Declining support rate did not impact growth! 25000 Installed storage systems (per year) 50% 20000 40% 15000 30% 10000 20% 5000 10% 0 2013 2014 2015 2016* * 2016 preliminary Sources: KfW, BSW-Solar 0% 2013 2014 2015 2016 Source: BSW-Solar based on own calculations, as of 1/2017 TT.MM.JJJJ Seite 29
Storage prices decline further Price index battery storage systems by technology - 10 kwh systems and 30 kwh 110.0 100.0 105.4 104.4 100.0 90.0 80.0 93.6 96.0 84.3 80.0 77.6 73.2 70.0 60.0 50.0 40.0 1st semester 2013 69.2 lithium storage systems (30 kwh) 2nd semester 2013 1st semester 2014 2nd semester 2014 72.4 61.1 65.2 61.9 53.0 n=39 1st 2nd 1st n=18 2nd semester 2015 semester 2015 semester 2016 semester 2016 60.9 47.1 Source: BSW-Solar, 4/2017 Prices for small lithium storage systems have fallen by nearly 40 percent since 2013 Large scale systems (up to 30 kwh) more than 50 percent cheaper TT.MM.JJJJ Seite 30
Installed Solar Battery Systems Solar Battery Market continues to grow 200,000 150,000 100,000 50,000 0 2013 2014 2015 2016 2017* 2018* 2019* 2020* * BSW Scenario, 2016: approximately 20.000 systems (preliminary) Aggregated installations Yearly installations TT.MM.JJJJ Seite 31
Small-scale / large storage systems can relieve the grid: A new growing market in Germany TT.MM.JJJJ Seite 32
Commercial customers / Industrial Parks in Germany High efficiency due to high rates of self consumption! Project Description: Shredderwerk Herbertingen Industrial Park (Germany, factory specialised in the recycling of wood and steel.); installed in July 2015; high level of selfconsumption planed Technical Details: The rooftop-mounted and grid-connected system has a capacity of 350.51 kwp; in total, the plant can generate around 340,000 kwh a year Business model: Load profile: 1600 kwh on work days and less than 150 kwh on weekends > 50 % of the solar energy used directly by the facility s machinery average level of autarky of 44 % (maximum level: 70 %) self-consumption level 53 % (maximum level: 90 %) Financing: Investment: 410,000 15-year bank loan; interest rate 2.8 % expected return on invest 7.5 % TT.MM.JJJJ Seite 33
Energy cooperatives emerging Heidelberger Energiegenossenschaft eg: First cooperatively organized provider 7 PV installations with total capacity of 445 kwp Supply with PV electricity to 119 tenants From the energy sector the housing cooperative was supported by service providers like Bürgerwerken, Naturstrom, and Discovergy. TT.MM.JJJJ Seite 34
BSW wants to open the market for tenant supply An important, new, and profitable business field! MARKET POTENTIAL POLITICAL FRAME in the three-digit megawatt area annually in the mid to long-term, around 3 5 TWh is currently markedly improving: German state (Länder) support program for tenant solar energy supply implemented in, among others, Hesse, Thuringia, North Rhineland-Westphalia and in Baden-Württemberg (coalition agreement). Inclusion of delegated legislation on tenant supply act in the EEG (Renewable Energy Sources Act) in 2017. Legal initiative for support of tenant supply with solar energy at a federal level, still expected in this legislative period FURTHER INFO www.sonne-teilen.de (among others, free guidelines) Side event at Intersolar together with the VKU 6-1-2017 14:00-15:30 hours, ICM Room 11 (in German)
Conclusions The energy system is in full transition to renewable energies more on the electrical than the heat side Large scale plants can only be realized by tendering, though with amazing results In the post Feed-In-Tariff era, business models in Germany are mainly driven by high rates of self- consumption Those consumers with the highest energy costs are prioritary In Germany, this is the residential sector Storage, demand side management, smart energy use become increasingly important New business models try to open up new consumer segments A lot of niche applications emerge an become full fledged competitors of the conventional energy system TT.MM.JJJJ Seite 36
37 Thanks for your kind attention Olivier Drücke German Solar Association info@bsw-solar.de BSW-Solar 24/01/2013 Source: Solarmarkt