/LONDON, September 25, 2023, 8:30 BST, RENEWABLE MARKET WATCHTM/ The current levels of dependence on fossil fuels, the need to reduce the carbon emissions associated with energy use and the prospects of developing a new and highly innovative European technology sector make distributed solar photovoltaic energy generation increasingly attractive. EU energy ministers agreed at the end of November 2022 on the content of a Council Regulation for a temporary framework to accelerate the permit-granting process and the deployment of renewable energy projects. Reduction of permitting burden shall contribute to corporate PPAs, which are essential for the European Union (EU) to achieve energy independence and its REPowerEU targets. To understand how we may unlock the self-generation potential, the latest update of the analysis Europe Net Metering and Self-Consumption Solar Photovoltaic (PV) Market Outlook 2023 – 2032 has been conducted with primary research, interviews, first-class sources of information, case studies and desk research. Based on our findings, the study drew conclusions and recommendations on developing a more comprehensive policy and regulatory framework for residential and commercial prosumers. The top 5 markets for net metering and self-consultion solar power are Germany, Italy, the Netherlands, France and the UK. Residential and commercial prosumers installing rooftop and building-integrated (BIPV) solar photovoltaic systems and energy storage shall have a vital role in the European clean energy transition by 2030.
Today, renewable energy sources have become a significant contributor to the energy transition occurring in Europe. According to the EU Green Deal, substantial fossil fuel capacity needs faster decommissioning to ensure that the EU reduces carbon-intensive power plants by 2030. The rate of replacement of carbon-intensive energy sources by renewable energy to date has already resulted in GHG emissions reductions in the EU electricity sector.
According to the EU Green Deal, substantial fossil fuel capacity needs faster decommissioning to ensure that the EU reduces carbon-intensive power plants by 2030. The rate of replacement of carbon-intensive energy sources by renewable energy to date has already resulted in GHG emissions reductions in the EU electricity sector. Residential and commercial prosumers installing rooftop and building-integrated (BIPV) solar photovoltaic systems and energy storage shall have a vital role in the European clean energy transition by 2030.
The military conflict in Ukraine has significantly impacted energy markets, including those of European countries. The gas and electricity prices will remain high by 2024. The efforts of most European countries to reduce energy imports from Russia will underpin high oil, gas and electricity prices. Governments in European countries will struggle to manage sustainability, security and affordability of the energy supply in a highly volatile commodity and energy market environment. Businesses in Europe started to look promptly for alternatives to expensive fossil fuel-based power sources.
The EU Member states agreed to reduce their gas demand by 15% compared to their average consumption in the past five years, between 1 August 2022 and 31 March 2023, with measures of their own choice. The gas demand reduction is to make savings ahead of winter to prepare for possible disruptions of gas supplies from Russia.
New favourable opportunities for net metering and self-consumption solar PV market are projected as the fastest deployable and cheapest renewable energy source, which can quickly support reducing the energy dependency rate on fossil fuels in European countries.
The European Solar Rooftops Initiative, as a key part of the EU Solar Energy Strategy from REPowerEU plan, aims to accelerate the vast and underutilised potential of rooftops to produce clean energy. It includes a proposal to gradually introduce an obligation to install solar energy in different types of buildings over the next years, starting with new public and commercial buildings and residential ones. By 2025 almost 60 GW of new rooftop solar PV capacity should be installed in the EU.
European countries have different terms and conditions for support and financial incentives given to small-scale residential and commercial solar PV installations. Besides net metering, some countries have feed-in tariffs or premiums, but there is no unified and well-structured approach to support. Tax reductions, capital subsidies, loans, or other forms of investment support are also available, but they vary across Europe. Incentive schemes benefit countries with less developed net metering and self-consumption solar PV markets.
By 2025 almost 60 GW of new rooftop solar PV capacity should be installed in the EU
There is significant potential for renewable energy production in apartment buildings that can be realised if self-consumption is also allowed for solar cooperatives and tenant communities and supported by adequate permitting procedures. Furthermore, access to capital and/or financing is crucial for residential consumers to select and invest in self-consumption installations. Therefore, the development of business models and financial instruments is necessary to make self-consumption widely accessible to customers from all income levels, including special programs for vulnerable consumers. The complicated and time-consuming administrative and authorisation procedures still represent a bottleneck to small-scale self-consumption projects' competitiveness.
The main element to achieve objectives for a fast increase of residential and commercial net metering and self-consumption solar PV capacity is the introduction of a solar mandate in all new public and commercial buildings with useful floor areas larger than 250 m² by 2026, of all existing public and commercial buildings with useful floor areas larger than 250 m² by 2027, and of all new residential buildings by 2029. The measures will be integrated as a new article 9a into the Energy Performance of Buildings Directive (EPBD). It also will ensure that permitting time for rooftop PV is limited to 3 months and adopt provisions to ensure that all new buildings are solar-ready. It will also support the full implementation of the EPBD, notably through dedicated guidance on Nearly Zero-Energy Buildings (NZEBs). The Commission will also limit the permitting time to a maximum of 3 months.
Small-scale residential and commercial solar PV installations with a capacity of up to 250 KW represent more than 40 per cent of total solar power capacity in 21 countries in Europe at the end of 2022
Although utility-scale solar photovoltaic (PV) power plants with a capacity above 1 MW continue to dominate the market, distributed solar is rapidly growing. A clear trend that the solar photovoltaic (PV) sector in Europe is moving towards self-consumption and net metering reveals the recently published report Europe Net Metering and Self-Consumption Solar Photovoltaic (PV) Market Outlook 2023 – 2032. According to industry analysts of Renewable Market Watch™, this trend shall continue. The EU administration is working to establish a new, more effective business and regulatory framework to stimulate distributed solar photovoltaic (PV) and other decentralised renewable energy sources.
Electric vehicles are an essential part of a clean energy future for Europe. As electric vehicles plug into the grid at night, they increase energy usage. This encourages homeowners and utilities to add more solar-powered charge-in capacity to the grid.
Besides the revenues generated by the electricity injected into the grid, people also want to reduce their bills via optimised levels of self-consumption. This represents a new revenue stream for both households and businesses. Net-metering programmes have been in place in Europe for quite some time. Recently, more elaborated business models appeared in an increasing number of European countries, which enlarged the concept of self-generation and consumption to wider groups of consumers.
Increased importance of battery storage
With the difficulties of Europe in managing the energy price crisis caused by the COVID-19 pandemic and the war in Ukraine, the cost-effectiveness of installing energy storage to support residential and commercial solar growth is indisputable. Energy storage is an essential technology to provide flexibility, stability, and reliability for the future European energy system. Germany is the most developed European market for residential battery storage and is responsible for almost 70% of the newly installed storage capacity between 2020 and 2022.
In 2022 more companies in Europe shifted their focus on distributed generation due to increased gas and wholesale electricity price pressure
Industry analysts of Renewable Market Watch™ used a complex array of research sources to understand better net metering and self-consumption solar photovoltaic (PV) systems and their application in European countries under different local regulations and support schemes. For this reason, a unique approach was applied in the segmentation process to explain better fundamental drivers and future dynamics behind the net metering and self-consumption solar PV market growth in Europe. The market was analyzed in every detail from eight main perspectives:
1) Policy and Regulation. Support Schemes at Europe-wide and Country Levels;
2) Turn-key Solar Photovoltaic (PV) System Cost;
3) Levelized Cost of Energy (LCOE) for Small Scale Residential and Commercial Solar Photovoltaic (PV) Systems;
4) Energy Storage Technologies and Solutions Development;
5) Market Trends and Investment Volume in Net Metering and Self-consumption Solar Photovoltaic (PV);
6) Energy Market and Electricity Grid Network. Transmission System Operators and Utilities;
7) Smart Grid Technologies Development;
8) Electric Vehicles and Charging Infrastructure Development
Net metering and self-consumption solar photovoltaic (PV) is already part of the utility business model. Distribution system operators (DSOs) in more than 14 European countries are involved in offering, designing, installing, and maintaining solar photovoltaic (PV) systems for residential and commercial projects. The growth of the net metering and self-consumption solar photovoltaic (PV) market in Europe will increase the demand for relevant solutions and services (e.g. smart power meters, solar simulators, software, etc.).
The rise in the number of prosumers in the past decade has been facilitated by the fall in the cost of solar PV modules and home energy storage, and the growth of electric vehicles
The rise in the number of prosumers in the past decade, according to Europe Net Metering and Self-Consumption Solar Photovoltaic (PV) Market Outlook 2023 – 2032, has been facilitated by the fall in the cost of solar PV modules. In some Member States, it is possible to produce solar electricity at a cost that is the same or lower than retail prices.
Various options are possible (e.g. residential prosumers, energy cooperatives, commercial prosumers, public institutions, etc.). An increase of 10 per cent in the number of households with electric vehicles will lead to an increase between 9 per cent and 17 per cent in installed residential net metering and self-consumption solar PV capacity by 2032.
The European net metering and self-consumption solar PV market has many development opportunities. A large amount of the available rooftop space in Europe for solar PV Installations is still unused. The Renewable Market Watch™ estimates that over 23 per cent of European households will be able to produce their own electricity by 2032. Net metering allows European customers to generate their own electricity cleanly and efficiently. During the day, most solar customers produce more electricity than they consume; net metering allows them to export that power to the grid and reduce their future electric bills.
In its independent, 230+ page report, Europe Net Metering and Self-Consumption Solar Photovoltaic (PV) Market Outlook 2023 – 2032, the Renewable Market Watch™, analyses the net metering and self-consumption supporting schemes for solar photovoltaic (PV) in all European countries. A Series of market trends that will impact investment volume and solar photovoltaic (PV) capacity additions under net metering and self-consumption support schemes over the coming decade in Europe have been identified.
The research team of the Renewable Market Watch™ elaborated projections of the future (2023 - 2032) levels of net metering and self-consumption solar photovoltaic power capacity uptake and investments under several baseline regulatory frameworks and scenarios in 44 countries to determine the main groups of countries according to their support systems for household and commercial prosumers and also to understand better the costs and benefits involved in each baseline framework. The Renewable Market Watch™ assumed and assessed the impact of:
1) A gradual phase-out of policy support over the period to 2030;
2) Reduction of the EU anti-dumping policies regarding the import of solar PV equipment (modules, inverters, mounting structures, etc.) manufactured in countries outside the EU;
3) Growth electric vehicles (EVs);
4) Growth of installed batteries for energy storage by households and commercial prosumers;
5) Development and penetration of smart grid technologies.
These issues have been critical in defining the distributed solar generation industry's market opportunity and participation rules. Economically viable supporting mechanisms, efficient and flexible permitting, and available grid capacity are the key elements necessary to build stable net metering and self-consumption solar photovoltaic (PV) market in Europe.
The more information about the net metering and self-consumption solar power market in Europe, including country profiles, you may read here: Europe Net Metering and Self-Consumption Solar Photovoltaic (PV) Market Outlook 2023 – 2032
To download the executive summary brochure with sample pages, please access from here: Europe Net Metering and Self-Consumption Solar Photovoltaic (PV) Market Outlook 2023 – 2032 - Sample
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