Lesson from Germany Photovoltaic

8/22/2019 Lesson from Germany Photovoltaic

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Lessons from Germany

National PV Conference 2008, Malaysia

14th August 2008, Kuala Lumpur

Gerhard Stryi-Hipp

Managing Director

German Solar Industry Association (BSW-Solar)Stralauer Platz 34, 10243 Berlin, Germany

Tel. +49 30 2977788 0, Fax +49 30 2977788 99www.bsw-solar.de, [email protected]


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German Solar Industry AssociationBundesverband Solarwirtschaft BSW-Solar

TASK Represent the German solar industry

in the solar thermal energy and photovoltaics sectors

VISION A worldwide sustainable energy supply provided by

solar energy

BSW-Solar 2008 Lessons on PV Markets, Aug 14th, 2008, Kuala Lumpur 2

ACTIVITIES Lobbying, political advice, public relations, marketobservation, standardization

TIME Over 25 years of activity in the solar energy sector

MEMBERS More than 600 solar producers, suppliers, wholesalers,

installers and other companies active in the solar

business

HEADQUARTERS Berlin


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Very good reasons to change our

energy supply system

ENERGY SUPPLY IS NOT SECUREEnergy import dependency from only a

Brent Crude Oil price increasedfrom 50 $ (Jan 2007) to147 $ (July 2008) per barrel

We should leave oil before it leaves us

Fatih Birol, chief economist IEA, March 2008


few countries is growing strongly FOSSIL AND NUCLEAR ENERGY

SOURCES ARE FINITEGrowing demand and limited resourceslead to exploding energy prices

CLIMATE CHANGE REQUIRES ACTIONClimate change is mainly caused by fossilenergy consumption, we have to reduceCO2-emissions worldwide CO2-Concentration is growing

continuously (IPCC 2007)


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The Sustainable Solution: Mix of Renewable EnergiesOnly Renewable Energies

are everlasting

are domestic energy sources are sustainable

do not harm the climate

are becomin chea er and chea er

WIND ENERGY BIOMASS

BIOMASS


increase domestic and regional added value

are creating jobs

Challenges for RES are

the financing of investments as long as RES aremore expensive than fossil and nuclear energy

the reconstruction of the energy supply systemto a distributed generation system based on RES

Quelle: Aus BMU, Daten EE, Juni 2007

Quelle: Wagner & Co

Quelle: Solarwatt

HYDROENERGY

PHOTOVOLTAICSSOLAR

THERMAL

ENERGY


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PV is the most fascinating way to produce electricity

Advantages

PV can be used everywhere worldwide

PV can be used grid connected and off-grid

PV can be used in every size

PV needs only one initial investment

Source:Aleo

Source: Solarwatt

Why do we need Photovoltaics?


oes no arm e env ronmen

PV has the biggest potential among all RES

Challenge: Today, PV is often the most expensiveway to produce electricity using RES

However: PV has the highest cost reduction potential

=> PV has to be developed today in order to have(1) enough solar capacity available in one decade(2) at a competitive price

Source: Phnix

Source: SMA


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World Energy Consumption Solar is needed

1000

1400

Solarthermal

other RenewablesGeothermal

ectricity


2000 2020 2040

200

600

Year2100Oil

Coal

Gas

Nuclear Power

Hydro

Biomass (traditional)

Biomass (modern)

Solar electricity (CSP/PV)Wind

Source: WBGU, German Advisory Council on Global Change (2006)

?

Solare


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LESSON 1

We have to start investing globally in PV today It is highly probable that problems with our fossil

energy supply system will increase dramatically


A mix of Renewable Energy Sources (RES)will cover our energy demand in the long run

PV will play an important big role within the RES mix


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Spain425 MWp; 18%

Switzerland

7 MWp; 0.3%

Italy50 MWp; 2%

Portugal10 MW 0.4%

France45 MWp; 2%

Newly installed PV Power: 2.4 GWp

Photovoltaic World Market 2007


Germany1100 MWp; 46%

190 MWp; 8%

ROEU15 MWp; 0.6%

Japan

230 MWp

10%

China20 MWp; 1%

South Korea

50 MWp; 2%

India20 MWp; 1%

Australia20 MWp; 1%ROW

220 MWp; 9%Source: EPIA, BSW, ASIF, SEIAUpdated 15 July 2008


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TOP PV markets 2006 and 2007

Total maket volume:2006: 1 600 MWp

2007: 2 400 MWpNew installed 2006

New installed 200720

20

14,5

7,1

3,4

12

9,7

2

2,5

3,4

170230

China 9

Australia 10

Portugal 11Switzerland 12

UK 13

ROW


Updated 15 July 2008, Source: 2007: EPIA/BSW/national PV associations, 2006: Eurobserver, IEA-PVPS

8501100

MWp

425

230

190

50

50

45

20

60,5

287

145

12,5

21

10,9

0 25 50 75 100 125 150 175 200 225 250 275 300 325 350 375 400 425 450

Germany 1

Spain 2

Japan 3

USA 4

Italy 5

South Korea 5

France 7

India 8


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Basis of the German Success in Renewable Energy Sources:A Clear and Continous Policy to Increase the Share of RES

30

20

25

30

1998 20002002 2004

2006 2007

2030 target

year

nvironment,March2008

Development of the share of Renewable Energy Sources in final energy consumption


6,63,13,54,8

8,5

14,2 1418

0

5

10

15

electricity heating & cooling final energyconsumption

RESsharein

Source:Ge

rmanFederalMinistryfor

1998

2000

2002

2004

2006

2007

2030


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Share of Solar Electricity in Germany

Photovoltaics

Distribution of Renewable Energy Electricity Production in Germany 2007

Share of PV electricity- of electricity consumption 2007: 0.6% (2006: 0.44%)- of renewable energy electricity 2007: 3.5% (2006: 3.1%)


Geothermal

0.1 TWh; 0.1%

Bio energy liquid

1.2 TWh; 2%

Bio gas

8.9 TWh; 11%

Bio energy solid

6.6 TWh; 8%

3.0 TWh; 4%

Hydro energy

21.7 TWh; 27%

Wind energy

38.5 TWh; 48%

Total RESelectricity

production

2007: 86.7 TWh

RES share of

electricity

consumption: 14.3% Source: BEE, Jan 2008


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1100

850850

6002500

3000

3500

4000

Development of the German PV market

PV Market Data 2007

Newly installed power 1 100 MWp

Total installed power 3 834 MWp

No. of newly installed systems 130 000

No. of total systems installed 430 000

Turnover 2007 5 Bln /7.25 Bln $ lledPVpowe

rinMWp


3 3 3 3

150

8078

4012101274

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

0

500

1000

1500

2000

annually installed PV power in MWp total installed PV power in MWp

Milestones

1991: First Feed-in Law

2000: Renewable Energy Sources Act (EEG)

2004: Amendment of EEG

Employees 40 000

Totalin

st


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Germany: Market Segments of on-grid PV Systems

BIPV

Efforto

fmoun

ting

residential homes 1-10 kWpmulti family houses, public + socialbuildings, farms, commercial plants

10-100 kWp

Image: Sharp

Large and very largecommercial > 100 kWp

Image: SchcoImage: Grammer

13%

1%


Size of the system

Ground

Roofto

mounted

Image: SolarwattImage: Solarwatt Image: BP

Image: Geosol Image: Geosol

27%49%

10%Market sharein 2006


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Grid-Connected PV Systems in Germany

Typical dataof a small PV system (per kWp)

Investment costs: 4 275

Each kWh of solar electricity produced is fed into the grid,sold to the utility and paid at a fixed price


(6,200 $)Annual production ofsolar electricity: 900 kWh/a

Feed-in tariff: 0.467 /kWh(0.67 $/kWh)

paid over 20 yearsFeed-in payment: 420 /a

(610 $/a)

Interest rates (KfW): 5.2%/a eff

1 $ = 0.69


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LESSON 2A clear and continous renewable energy policywill show positive results within a few years

The share of RES in electricity production inGermany grew from 4.8% to 14.2% within 9 years


PV market grew from 10 MWp to 1100 MWp

PV is used in different sizes, from small systems onresidential houses up to large MWp-plants


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Two Ways of Connecting PV Systems to the Grid


USA: Net-meteringSolar electricity is used for own consumption first,

only excess electricity is fed into the grid

Germany: Feed-in tariffSolar electricity is exclusively

fed into the grid


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How does theGerman Feed-in Law (EEG) work?

Principles

Priority connection for all PV systems granted

Each solar kWh has to be purchased by the utility

Fixed feed-in tariff payment over 20 years

Reduction of the feed-in tariff each year

FIT and electricity rate in Germany

0

1020

30

40

50

60

2005 2010 2015 2020

-

ct/kWh


Consumption of 495 TWh

Price private consumer:approx. 20ct per kWh

Including 0.24ct for PV consum

er

Price increase for consumer: 1.2%

Utilitiesgrid

2.22 TWh solar electricitysold for mio 1,176 [mio$ 1,700](average 53ct per kWh)

Fossil and nuclearelectricity

(and other renewables)

Share of solar electricity: 0.45%

Data from 2006

Target: grid parity


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Feed-in tariffper kWh

< 30kWp

30100kWp

> 100kWp

for PV systems installed in 2008,guaranteed over 20 years

-Fabrik

Feed-in Tariffs in Germany 2008


on buildingsand noiseprotectionwalls

ct46.75

$ct67.8

ct44.48

$ct64.5

ct43.99

$ct63.8

Faade-integrated

additional ct 5$ct 7.25

Open land(ground-mounted)

ct 35.49

$ct 51.5

Image:Degussa

Image:Sola


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Small, Medium and Large Rooftop Installations


Image: Frankensolar

Image: Wagner & Co

Image:Solar-Fabrik


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Examples of Ground-Mounted PV systems


Image:PhnixImage:PhnixImage:Geosol

Image: EpuronImage: Geosol


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1350

1500

1700

1900

1500

1750

2000

2250

2500

powerinM

Wp

Amendment of the EEG from June 2008:Feed-in Tariffs for PV will be reduced faster as of 2009

8%/9%

9%

Degression rate of feed-in tariffsUp to 2008: 5% / 6.5% (roof top/ground)

2009/2010: 8% / 10% (< / >100 kWp)2011/2012: 9%Below/above corridor: -1%/+1%

+1%

+1%

+1%


80150

600

850 850

1100

10001100

1200

0

250

500

750

1000

1250

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

annua

llyinstalledP

V

annually installed PV power in MWp upper limit lower limit

8%/10%

10%

-1%-1%

-1%

Degression rate 5%/6.5%

est


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Feed-in Tariffs for PV within the German EEG

51,849,21

46,75

43,01

39,57

36 01

48,7446,3

43,9940

45

50

55

60

ctperkWh

Based on degression rates decided on June 6th, 2008

Grid parity will

be reached between

2012 and 2015


32,7729,82

27,1424,7

22,4820,46

39,58

35,62

32,41

26,84

,

37,96 35,49

31,9428,75

26,1623,81

21,6719,72

17,95 16,3314,86

29,49

24,4222,22

18,420,22

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

facades < 30 kWp > 30 kWp

> 100 kWp >1000 kWp Ground mounted

electricity price (+3%/a)

20ct/kWh


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LESSON 3The feed-in tariff law (EEG) is the reasonfor the strong PV market growth in Germany

The goal of the FIT is to increase the market andthereby reduce the costs of PV


FIT are so strong because they provide stableconditions for investors

FIT conditions have to be evaluated regularly


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Photovoltaic market entrance strategy2. Building up:- PV market- PV production

- Installation capacitiesReduction of costsLess energy imports

Creation of jobs

3. PV will become:- Cost-competitive- An important

pillar of thesustainable

energy system

1. Create PV demand by:- Granting the right of

solar electricity production

and grid connection- Making solar electricity

production financiallyattractive


More than 15 billion have been invested inPV systems since 2000

More than 3 billion have been invested inmanufacturing plants since 2000

Drop in costs for PV systems of

approx. 25% from 1999 to 2003

approx. 5% annually since mid 2006

Image: Aleo

First results


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Production Follows the Market: PV Manufacturers in Germany I


Source: Invest in Germany, March 2008


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Production Follows the Market: PV Manufacturers in Germany II


Source: Invest in Germany, March 2008


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How to develop PV marketsCreate a long term strategy and develop the market step by step


Table fromthe brochurePhotovoltaicsby BSW-Solar


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LESSON 4A long term strategy is needed to develop aPV market successfully

Production will follow if the market is developing


pilot plants niche markets beginning broad market

Other framework conditions are as important assupport programs: training, awareness raising, grid

connection rules etc.


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Development step by step1. SET GOALS

Building up a PV market: how many MWp in which time

Building up a PV industry: which type of production

Building up R&D capacity

Building up planning, installation and maintenance capacity

Electrification of rural areas (off-grid) and/or


-

reduction of the need to build up new transmission lines (on-grid)develop up a sustainable, domestic energy source (on-grid)

2. Develop a strategy to achieve the goals

Decide for the most efficient support instrument:

tax reduction, grants, FIT (costs, administration, type of investors, ) Building up installation capacity (training)

Raising awareness of the people and investors

3. Evaluate the development regularely


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SUMMARY

We have to begin investing globally in PV today

A clear and continous policy shows good results

The FIT is the reason for the German success in PV


PV market development needs a long term strategy A step by step strategy is most successful

Let us work together for a secure and sustainableenergy supply by developing PV worldwide


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BSW-Solar 2008 Lessons on PV Markets, Aug 14th, 2008, Kuala Lumpur 31Image: Suntechnics, Sunways Thank you very much for your attention!

PV facade with green solar cells, sports stadium Tbingen

Lesson from Germany Photovoltaic

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