PV Parity Project calls for greater support for PV self-consumption

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A new and final report published by the PV Parity Project, the European initiative working towards attainment of PV competitiveness at the lowest possible price in the European Union, says the photovoltaic sector is increasingly evolving from an investors’ market to an energy-savings’ market.

The 30-month PV Parity Project, which began in June 2011 and ends this month, has focused its analysis on 11 EU countries: Austria, Belgium, Czech Republic, France, Germany, Greece, Italy, the Netherlands, Portugal, Spain and United Kingdom. Organizers met on Tuesday for the last time at the Final PV Parity Conference in Brussels to present the campaign’s main results and final report to European policymakers and energy stakeholders.

The report, released on Wednesday, says the transition is being achieved by moving from a pure feed-in tariff-driven market towards a more self-consumption-based regulatory framework.

"The analysis of the costs of current photovoltaic support schemes shows that self-consumption, if favored by adequately-designed measures, can be the basis for reducing the costs of support schemes in general and that of feed-in tariffs in particular," said Georg Lettner from Vienna University of Technology, one of the PV Parity Project’s partners.

According to the report, self-consumption measures must be accompanied by fair compensation for the electricity injected into the grid in order to ensure the competitiveness of installations driven by self-consumption. Therefore, at least for the time being in most European countries, compensation for electricity fed into the grid (rather than self-consumed) needs to be higher than the market price of electricity, it adds.

In addition, enhancing self-consumption can be achieved through various types of measures, such as optimization of PV system size and demand-response measures in which decentralized storage could play a demonstrative role.

"Self-consumption needs a specific regulatory framework, with a right to self-consume to be implemented and a lot of design criteria to be considered," said Fabian Pause of the German Foundation for Environmental Energy Law, likewise a PV Parity Project partner.

"Unfortunately, the aspect of self-consumption was not sufficiently addressed by the EU in its recently-published guidance package," Pause added. "With this initiative, the European Commission could have provided indications on how to foster decentralized power generation, in particular PV at prosumer [between professional and consumer] level."

The report further states that a regulatory framework for PV self-consumption should ensure a fair remuneration for PV system owners while guaranteeing the financing of grid operators.

"As the reduction of electricity bills through self-consumption leads to lower revenues for grid operators and public bodies, it increases the existing pressure for a revision of the way grids are financed. However, self-consumption of PV is only one of many different drivers for adaptations in grid costs."

The burden of grid compensation should therefore not fall disproportionately on PV system owners and should only be reflected gradually, as it would otherwise push back the moment when PV can be competitive without support, the report adds, stressing that the question of alternative grid financing should instead be considered at system level, "in particular as PV can have a beneficial impact on grid costs even with relatively high penetration levels."

The PV Parity Project’s other main partners include the European Photovoltaic Industry Association (EPIA); the U.K.’s Imperial Consultants; the Technical University of Crete; ECN in the Netherlands; IDAE, Spain; Italy’s Gestore dei Servizi Energetici (GSE) and ENEL Green Power; and EDF Energies Nouvelles in France.