Opinion & Analysis

There is a growing trend in the European renewable energy space that will likely give us a great overview of the future of the industry. As the industry scales up, we are seeing more big players emerge, who are investing in and managing multiple solar PV plants.

The Inflation Reduction Act (IRA), signed into law by US President Joe Biden, represents the single largest investment in clean energy, GHG emissions reduction, and climate resilience in the country’s history by providing around US$370 billion for green energy tax credits and other incentives to spur large-scale development of solar energy technologies to electrify the US’s digitization.

Extreme volatility and high prices recorded on energy markets, coupled with inflation, and soaring interest rates are impacting long term power purchase agreements. Still there is a way to the success and signing of contracts.

At the end of 2021, the total capacity of the solar power plants throughout the world was estimated to be 940 GW. According to the forecasts of solar association SolarPower Europe, the total capacity could reach 2 TW by 2025. With the rapidly growing popularity of solar power plants, experts predict that the next breakthrough in this sector will be smart batteries. In the future, solar power plants will not be able to operate without them.

Almost half a billion people are served by the off-grid solar industry, and a growing number of these via Pay-as-you-go (PAYGo) asset financing. For many consumers, not only is the solar product their first access to modern energy but it may also be their first access to finance. The impact of this can be huge – the 60 Decibels Energy Benchmark reveals that 92% of consumers report an improvement in quality of life after purchasing their off-grid solar (OGS) product. On the other hand, consumers of OGS are exposed to product, service, and financial risk that companies must mitigate and balance with sustainable growth objectives. 

The Covid-19 pandemic and resulting economic fallout have had a variety of impacts on the clean energy transition, with some sectors being more affected than others. Earlier this year, the International Energy Agency (IEA) warned of slowed progress towards sustainable energy goals due to Covid-19 and reversed progress in many areas crucial in reaching net zero, such as energy efficiency, clean cooking, or access to electricity. There is one sector, however, that has shown remarkable resilience since the beginning of the pandemic and has been able to maintain, and even accelerate, its rapid growth since 2020: green energy infrastructure.

The world’s energy sector is concentrated in solar, wind, electricity transmission/distribution and hydroelectric power. For example, investment in solar power plants alone is higher than investment in natural gas, coal-fired and nuclear power plants combined. This is encouraging, but another fact is worrying: China’s exports of solar modules to Europe in the first four months of 2022 were 2.5 times higher compared to 2021. In April alone, nearly 8 GW of solar modules worth more than €2 billion were imported from China into Europe.

The war in Ukraine continues to disrupt the global energy sector and, combined with the recent heatwaves affecting Europe, the need to restructure economies is starker than ever. Luckily, there are some countries that have kept working on their energy transition reforms and taking tangible actions towards tackling climate change. Uzbekistan is one of them.

High temperatures can affect different components of PV systems. Inverters can fail, the efficiency of solar modules can decline, and existing cell damage can become worse. However, investors, planners, and operators can adjust to heat waves in a number of different ways.

On June 27, the Guidelines for The Design, Construction and Operation of Agrovoltaic Plants were published in Italy by the Ministry of Ecological Transition, in coordination with the Council for Agricultural Research and Analysis of Agricultural Economics (CREA), Gestore dei Servizi Energetici S.p.A. (GSE), the National Agency for New Technologies, Energy and Sustainable Economic Development (ENEA), and Research on the Energy System S.p.A. (RSE). From now on, developers and, in general, RES plant owners will have to consider the principles herein outlined, to have their plants classified as agrovoltaic.