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Europe Net Metering and Self-Consumption Solar PV Market Outlook 2016 - 2025

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/30rd November 2016, RENEWABLE MARKET WATCHTM/ Distributed  solar  power,  which  has  been the  backbone  for  the  bulk  of  the  solar PV sector’s  growth  in  Europe,  is  moving towards self‑consumption and net metering according to recently published report Europe Net Metering and Self-Consumption Solar PV Market Outlook 2016 - 2025. In February 2015, the European Commission published its new Energy Union strategy depicting a vision in which “citizens take ownership of the energy transition, benefit from new technologies to reduce their bills, participate actively in the market”. Besides a greater consumers’ involvement, the energy transition will require much more renewables. This paradigm shift has already started: In 2014 and for the first time, renewables produced more power than nuclear in Europe. And this trend will continue: according to the European Commission’s forecasts, renewables will cover around 45% of our electricity demand by 2030 and their share is expected to grow to 60% ÷ 97% by 2050. This represents a major opportunity to establish a clean, secure and resilient energy system on which European economy can grow.

Distributed  solar  power,  which  has  been the  backbone  for  the  bulk  of  the  solar PV sector’s  growth  in  Europe,  is  moving towards self‑consumption and net metering

In this context, wide deployment of net metering and self-consumption solar PV capacity will help to achieve these two objectives in parallel: it will very concretely empower consumers while facilitating a bottom-up deployment of renewables. More importantly, this consumer involvement contributes to the achievement of the binding national renewable targets by attracting private capital from actors – consumers - who have lower expectations in terms of rate of return compared to pure financial investors. This makes the energy transition cheaper. Making on-site solar power generation accessible to a larger number of consumers is also leading to new forms of engagement: energy cooperatives, joint purchasing programmes, crowd funding platforms or leasing make the retail electricity market more diversified and competitive. Self-consumption solar PV is also a key driver for demand‑side flexibility, steering storage, smart appliances and more flexible contracts.

Incentivized self-consumption and net metering programs are becoming increasingly important policy supports for global solar PV markets

Globally, for the first time over 50 GW of solar power was connected to the grid in a single year, 25% up from 40.2 GW in 2014. Thus 2015 was a year of records and 23 countries have passed the GW mark and the 200 GW mark has been crossed in 2015, with 229 GW producing electricity at the end of the year. Obviously incentivized self-consumption and net metering programs are becoming increasingly important policy supports for global solar PV markets and especially in Europe.

The strong run for solar PV capacity additions through net metering and self-consumption support schemes continued in 2015. Thus global net metering and self-consumption solar PV capacity grew by 30% in 2015 compared to 2014 reveals Europe Net Metering and Self-Consumption Solar PV Market Outlook 2016 - 2025. Significant portion of the solar PV generation in Italy and Germany comes from net metering and self-consumption.

Global net metering and self-consumption solar PV capacity grew by 30% in 2015 compared to 2014

Owing to technological progress and economy of scale, the investment costs for solar PV power plants, have fallen approximately with 14 % per year, equal to almost 75 % since 2006. The Chart 1 above shows the price development since 2006 for rooftop solar PV systems between 10 kWp to 100 kWp in Germany. Cost of small scale rooftop solar PV system in Germany has been around 5,000€/kWp in 2006. It is now below 1,300€/kWp in 2016. This very impressive price development resulted in highly competitive power generation costs. PV module costs are responsible for about 50 % of the total investment costs for solar PV power plants of this size. Therefore, all residential and industrial consumers in Europe have now access to a low cost on-site renewable power source according to Europe Net Metering and Self-Consumption Solar PV Market Outlook 2016 - 2025.

This independent, 240+ page report of Renewable Market Watch™ analyzes the net metering and self-consumption supporting schemes for solar PV in all European countries. Through extensive research and discussions with experts in the industry, Renewable Market Watch™ has identified a series of market trends that will impact investment volume and solar PV capacity additions under net metering and self-consumption support schemes over the coming decade in Europe.

In 2014 and for the first time, renewables produced more power than nuclear in Europe

Industry analysts of Renewable Market Watch™ used a complex array of research sources to better understand role of net metering and self-consumption solar PV systems and their application in all European countries under different local regulations and support schemes. For this reason unique approach was applied in segmentation process to achieve and present better explanation of fundamental drivers and future dynamics behind the net metering and self-consumption solar PV market growth in Europe. Market was analyzed from six main perspectives:

1)    Policy and Regulation. Support Schemes at Europe-wide and Country Level;
2)    Turn-key Solar PV System Cost;
3)    Levelized Cost of Energy (LCOE) for Small Scale Residential and Commercial Solar PV Systems;
4)    Market Trends and Investment Volume in Net Metering and Self-consumption Solar PV;
5)    Energy Market and Electricity Grid Network. Transmission System Operators and Utilities;
6)    Smart Grid Technologies Development.

Net metering and self-consumption solar PV should become part of the utility business model and the utilities should be involved in the process of designing, installing, and maintaining solar PV systems for residential and commercial projects. Growth of net metering and self-consumption solar PV market in Europe will lead also to increasing in demand for solutions and services due to advances in technology in components, such as smart power meters, solar simulators, and grid intelligent components, services and applications of the smart solar technology concept. Thus most of the vendors are focusing on providing complete solutions for smart solar from components to the services.

Net metering and self-consumption solar PV should become part of the utility business model

There are three key drivers behind the continuing net-metering and self-consumption solar PV market growth in Europe, which is expected in the next decade according to Europe Net Metering and Self-Consumption Solar PV Market Outlook 2016 - 2025. First one is the drastic reduction of feed-in tariffs in many countries. Therefore feed-in tariffs started to lose their power as driver of renewable energy growth since 2011 and this process will continue. The second one is grid parity, which is progressing and by 2025 not only sun-belt countries, but also a lot of countries with less solar irradiation will have grid parity. The third one is growth of the smart grid concept, market and services, which make it easier to integrate renewable energy systems for net-metering and self-consumption.

With 179 charts, maps and tables, together with policy and support schemes overview in 44 countries, competitive landscape and smart grid development investigated, the report Europe Net Metering and Self-Consumption Solar PV Market Outlook 2016 - 2025 gives you a perfect visual breakdown of European net metering and self-consumption solar PV market.

More information you can read in executive summary brochure of this report:

Eruope Net Metering and Self-Consumption Solar PV Market Outlook 2016 - 2025