Study: appropriate pricing of PV in Germany would reduce electricity charges

Carried out by A.T. Kearney, the study states that PV electricity substitutes for peak- and medium-load power stations run on gas and hard coal in the power grid. As a result, it says the full costs of these fossil-based sources of energy should be compared with the costs of PV.

"A mere adjustment in the calculation reduces the charges levied for PV in 2011 by up to 18 percent, namely from 1.67 cents per kilowatt hour (ct/kWh) down to potentially 1.38 ct/kWh," it explains. "If, in 2011, the volume of systems installed comes to six gigawatts rather than the 9.5 gigawatts anticipated by transmission grid operators, charges would be as much as 24 percent lower and come to 1.28 ct/kWh."

The study goes on to say that macro-economic breakeven for the installed output of PV will have already been achieved by the end of this year, "which means that the benefits of photovoltaic systems installed in 2010 will outweigh the costs for the first time".

It adds that by the end of 2011, all PV systems connected to the grid under the German Renewable Energies Act (EEG) since 2000 will have reached breakeven in Germany if, in line with assumptions, another six gigawatts (GW) of peak power are installed next year. ??

It was further stated that, measured against new gas- and hard coal-fired power stations, PV will be able to deliver competitive electricity in the next five to eight years. However, a precondition is a "fair recognition of costs for both PV and for power stations generating electricity from conventional sources of energy. From this point onwards, tax plus grid costs can be levied on photovoltaic electricity, similar to conventional power."

Phoenix Solar, which presented the results, says that, consequently, the basis for calculating the differential costs must be adjusted to the actual conditions pertaining to the respective type of power generation. It adds that the cost of PV electricity must be compared with the electricity which it replaces at production times in the grid, specifically electricity generated by gas and hard coal-fired power stations. "The result," it states, "would be a notable reduction in the differential costs, which means that electricity consumers would pay much less."

The company also calls for a paradigm shift in the allocation of costs of conventional and renewable energies reflecting where these costs are incurred is necessary.

"Our long-standing doubt about the accuracy of how the differential costs has been calculated up until now has been confirmed through the findings of the study," comments Dr. Andreas Hänel, chief executive officer of Phoenix Solar. "Our intention with this study is to encourage the urgently needed discussion about the true value of photovoltaics." ??

Jochen Hauff, leading author of the A.T. Kearney study adds: "It came as a surprise to us that the combination of sharp reductions in tariffs and the high volume of installed capacity in 2010 has enabled breakeven to be exceeded in Germany. Particularly against the background of the sharp criticism of government promotion under the German Renewable Energies Act (EEG), photovoltaics demonstrates its ability from an economic standpoint of contributing to the sustainable generating of electricity in Germany."

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