Finland to slowly use its solar potential

by Carl Johannes Muth.

Cold winters, sauna and good heavy metals bands have been widely used terms to describe the north European country. Solar power, however, has not been on that list. Yet, after years of stagnation, PV deployment in Finland has increased over the last two years. According to the latest PV Barometer released by EurObserv´ER, Finland’s total PV capacity rose from 11.2 to 14.7 MW in 2015. This is still a small fraction compared to Germany; nevertheless the growth represents an increase of 33% within one year.

Like other countries in the world, Finland actually has been using solar power for quite a long while. In 1996 the domestic retail conglomerate Kesko installed its first-ever commercial-use solar power plant in the southern Finnish city of Tampere. Unfortunately this small-scale PV rooftop system and a few panels installed on summer cottages to catch the sun of the long midsummer days were the extent of Finnish solar power for almost twenty years. Considered too expensive with a short period of use per year, it had simply not been taken seriously in Finland and most other Nordic nations.

The Finnish feed-in tariff system does not apply to electricity generated from solar PV. However, several forms of investment subsidy for renewable energy projects including solar power are now provided by the Finnish state. For instance, the so-called “energy aid” provides grants for renewable energy production facilities and research projects related to it. The program is available for companies, municipalities and communities. Up to 30% of the project’s overall costs can be covered, increasing to 40% if the project includes the use of new technology. Farms, housing corporations, residential properties and construction properties are excluded from the support. Instead individual tax payers can utilize special tax breaks which remunerate 45% of the labour part of PV installations.

It still might be surprising that in the dark and cold Scandinavian country, people consider PV as a potential source of power, but Finland’s short winter days have a flipside. In June, near the Finnish midsummer celebration, daylight stretches to 20 hours and longer, so generation from PV panels will rise accordingly. As stated by Janne Hirvonen from Aalto University School of Engineering, Department of Energy Technology, Finland has about the same amount of annual insolation as northern Germany; it is just concentrated in the summer. Also the assumption that PV requires warm conditions to provide full performance is wrong. It is the opposite of the case. The panels are significantly more efficient in cold weather and clean, dustless surroundings, as you have those conditions in Finland.

The biggest obstacle in the use of this potential was, until recently, the price of solar panels. “From an economic point of view, using solar power is not worthwhile for households at the moment”, said Christer Nyman, Executive Director of the Association for Solar Technology, to the Helsinki Times in 2012.  However this has changed significantly over the last years. Thanks to a sharp drop in prices for PV panels, Finnish retailing conglomerate Kesko began to study solar power system in autumn 2015 after quite a long break, Jukka Anttila, Construction and Maintenance Director of Kesko, told pv magazine. “We found that prices are at a reasonable level and that we can receive about 9-11% profit for our investments.”

Starting from 2016, the Finnish retail company has significantly increased its production and use of solar power to cover parts of their own energy consumption. Two PV rooftop systems of 900 kW each were installed on K-stores in Turku and one 500 kW on the roof of a K-Citymarket in Tammisto near Helsinki. All 16 solar installations, operating on the rooftops of the K-Group's stores, combined, produce around 3,6 MWh annually. And Kesko is planning four more solar projects that could make the company Finland's biggest producer and user of solar power.

Beside state funds for commercial and household projects, the Finnish Evli Bank provides support for alternative projects. The fund, EAI SOLAR I, offers property owners and tenants the opportunity to invest in distributed solar projects without releasing too much of their own capital. It is also open to investors, who are seeking a stable return on solar investments.

The concept of generating solar power without buying your own PV system seems very appealing to Finnish local energy consumers. The best example for this growing market is an 850 KW rooftop system commissioned by Helsinki-based energy company Helen. The PV installation in Kivikko is comprised of 2,992 PV panels that can be rented by Helen´s customers for a monthly fee of 4.40 Euros each.  Kivikko plant, thereby, is not the first shared solar project in Finland. In March 2015, Helen completed a 340 kW PV installation in Suvilahti near Helsinki, for the first time offering its customers a possibility to generate solar power without investing in a private PV system.

Despite of the potential solar and especially wind power, Finland still goes the nuclear way and literally pays a high price for that. Currently Unit 3 of Olkiluoto Nuclear Power Plant on the shore of the Gulf of Bothnia is under construction. Planned to start operation in 2010 the date has been pushed back several times and is now estimated for 2018. Also the costs will exceed €8,5 billion, which is almost three times the delivery price of €3 billion, which caused the French Areva Group to be broken up by the French government. The Finnish power plant operator TVO, therefore, is already worried that the power plant will be supervised by an “empty shell”.