A long time before the German Government passed the “Renewable Energies Law” in 2000, those involved in the solar branch already had a common dream: independence. The “solar revolution”, it would seem, not only fulfills this dream – it will also change international electricity markets forever as the simple fact is the sun doesn’t send a bill.
Numerous studies show that of the greatest fears amongst the German population is a fear of a rise in the cost of living. This is deep in the German psyche and the cost of energy plays a key role in this fear. What can allay this fear? Solar power. And why? Affordable prices for clean energy are long since not just wishful thinking by a few idealists, but are now within reach. Independence from subsidies, political maneuvering, and opportunity could lead to PV plants signifying “energy anti-globalization”. This means independence from world commodity markets, unstable countries and oil crises.
Is solar unlimited and storable? In a nutshell, Yes. The fulfillment of this dream is currently closer than ever before. Today PV electricity is already competitive in many regions of the world and it is going to get cheaper. High performance batteries are also rapidly conquering the market, and they also will get cheaper. The competitiveness of the new storage systems is an essential add-on for the profitability of photovoltaic plants – and hence also for the increased independence of PV users. Because of this development, photovoltaic plants equipped with batteries and optimized for self-consumption will be standard in buildings of the future – just like showers and phone connections are today.
From dream to reality
The solar revolution of the energy market is unstoppable – even if politicians often work more against it than for it, in order to “slowly” adapt the established energy infrastructure which has been built up over decades. The profit warnings of the largest energy suppliers across Europe also illustrate the wholesale changes going on.
With regards to the German energy market, we are already seeing very interesting developments which have far-reaching consequences. The current design of the electricity market whereby the costs, for example for the grid, are apportioned to the use is not suitable for a huge increase in the solar producer own consumption of that electricity. The smaller the distribution of power from the grid is, the higher the allocated costs for the remaining kilowatt hours. Increased domestic usage of solar would mean the final kilowatt hour sourced from the grid would have to carry all of the costs and would therefore be unimaginably expensive. Grid operators therefore are currently looking at what seems like a sensible alternative: a transition to service prices in relation to the provided power input. The principle is easy, fair to the consumer and sets the right incentives for the consumer which is to avoid peaks in power demand. This will enable a range of new business services and heavily promote the use of batteries. At the same time, we will also see the increasing significance of topics such load management and “smart home” – topics which have often been treated as a poor cousin to solar.
And as solar costs come down and installations increase other countries will face similar issues. Sealing off the markets by means of laws and regulations cannot stop the development of solar– it can only slow it down. The solar revolution is simply unstoppable! If the predictions for the cost development of PV modules and batteries prove to be correct, dreams will become reality.
Thomas Kercher is the CEO of PfalzSolar a leading European rooftop and ground based developer of solar and hybrid power solutions. PfalzSolar is a subsidiary of the German municipal utility Pfalzwerke.