Germany, Austria and Switzerland have a diverse landscape of energy suppliers. EuPD Research has identified a total of 1,800 companies, 1,250 of which are located in Germany. They are all in competition with one other and when it comes to the energy transition, many are still in their infancy. This will be one of the greatest challenges facing electricity and gas suppliers in the future. Consumers might do well to look to the players that have made the most progress in the energy transition. But first, they have to find them. That is where EuPD Research, the German Cleantech Institute (DCTI) and The smarter E Europe come in.
This year, they will once again recognize trailblazers at the Munich exhibition and conference with the ‘Energiewende Awards’ (see p. 79). Energy suppliers from Germany, Austria and Switzerland that are already well positioned will be honored. “With the Energiewende Award, we have created an impartial reference for end customers, showing which energy suppliers are already setting the example today in addressing the individual aspects of the energy transition and acting in the customer’s interests,” says Martin Ammon, who heads the study at EuPD Research.
The basic idea behind the award, Ammon says, is that the recognized utilities will gain broad acceptance as companies competent in renewable energy issues and the energy transition. In 2018, as many as 71% of the consumers surveyed said they agreed with this statement. For instance, customers want information about the energy transition in general, as well as renewable energy technology and available subsidies. This interest is particularly pronounced in the electricity sector, where 73% of the respondents wanted such products and services last year, says Ammon. Electricity is followed by the fields of heat and energy efficiency.
It is not the case that municipal utilities and energy suppliers have little by way of ‘green alternatives’ to offer. Quite the contrary. Analyses in 2018 showed that 21% of some 1,250 German companies surveyed had PV products on offer. But, Ammon continues, little expansion of this offering has occurred since then and the percentage has remained roughly the same. Analysis reveals that large energy suppliers are particularly well represented in PV, with nearly one in two offering some type of PV solution. For medium-sized energy suppliers with annual sales between €10 million and €50 million, the figure was 28%, and for small municipal utilities, 12%.
Solar PV was even more prominent among the energy suppliers surveyed in Austria. There, 69% of large energy suppliers have PV in their portfolio, 42% of medium-sized ones, and 12% of the small ones. On average, 28% of utilities in the Alpine republic have such offerings – almost double the percentage of the Swiss energy suppliers. Even among the Swiss, PV is mainly within the purview of large and medium-sized utilities.
The municipal utility in Heidelberg (Stadtwerke Heidelberg) has been offering solar products for around 20 years. “Up to now, we have largely managed to cover the whole spectrum,” says managing director Michael Teigeler. The offering ranges from small roof systems to tenant power and commercial and industrial (C&I) systems. In addition, Stadtwerke Heidelberg offers lease models and maintenance, as well as other services relating to PV systems. While many municipal utilities and energy suppliers tend to use white-label solutions, at least when it comes to designing and installing PV systems, Stadtwerke Heidelberg provides PV in-house. “For smaller rooftop systems, there is a pool of installers we draw on when we receive enquiries,” Teigeler explains. The focus is always on quality, which is why the pool gets re-evaluated and refreshed from time to time. In the case of larger rooftop projects – for example, in the C&I segment or for tenant power projects – the utility opens a public tender to find the right engineering and installation partner.
Selling PV systems is not necessarily an attractive business for utilities. They want to retain as many of their customers as possible, which is why more than half of them now also offer leasing models, explains EuPD Research analyst Ammon. Teigeler confirms this. Stadtwerke Heidelberg’s leasing models are geared more to larger customers, such as the C&I segment. The most attractive option is for companies to consume the power they generate on site, but many recoil at the high initial outlays PV plants require, which, in the D-A-CH region, take longer to amortize than other capital investments. As with multi-family dwellings, the leasing model therefore functions better in the C&I segment. “And this is actually our core clientele,” says Teigeler.
Add a battery
Battery storage systems are a popular addition to a rooftop solar system – a good two thirds of energy suppliers offer them, according to the EuPD Research analysis. More than half of these companies also offer economic feasibility calculations. Stadtwerke Heidelberg has a solar calculator on its website. But it is more of a gadget, says Teigeler. It is not actually used to generate quotes. “But it nudges customers to write an e-mail or make a phone call,” he says.
In addition to rooftop solar, Stadtwerke Heidelberg offers a wide range of green-power tariffs. Teigeler thinks it is important that this is genuine green electricity. Some of the utility’s products are certified with the Grüner Strom label – the gold standard in renewable authentication. Customers pay an additional surcharge of between one and four cents per kilowatt-hour on the Grüner Strom certified tariff. The cash collected from the surcharge is channeled into a fund used to finance new solar projects or other climate protection measures, explains Teigeler. But even in a university town like Heidelberg, where many well-off people live and many are inclined to do something to protect the climate, not everyone is willing or able to pay the Grüner Strom premium, which is why Stadtwerke Heidelberg also offers somewhat cheaper green electricity rates that are certified with the ok-PowerLabel, says Teigeler.
The widespread view that younger people, in particular, are enthusiastic about green electricity and especially committed to climate protection, contrasts with Teigeler’s own experience. “According to our surveys, our green electricity customers are, on average, 55 years old, live in urban areas and apartment buildings and primarily use local public transport.” In surveys conducted by the Stadtwerke, usually 30% of respondents say that they purchase green electricity. “But in reality, it’s only 15% of our customers,” says Teigeler. He suspects social status is behind the inflated values – that is, people think that their communities expect them to purchase green electricity.
Another question is how customers become aware of solar PV, storage or green tariffs in the first place. EuPD Research shows that there is still room for improvement when it comes to communication. In the survey, 38% of customers reported that their energy supplier had been in contact with them, while 20% had approached utility companies on their own initiative. In Austria and Switzerland, rates of proactive communication were even lower.
Teigeler says that his utility does a lot of work to raise awareness of their projects. “We’ll talk about it.” There are on-site events, and they put the word out over social media. In Teigeler’s view, it is important to make energy tangible and experiential. “We want the Stadtwerke to be visible in the city as well,” he says. At the same time, he admits that this face-to-face marketing – both in the residential and C&I segments – is an arduous process that costs considerable time and effort.
Many energy suppliers are astonishingly far along when it comes to electromobility. According to EuPD Research, only 45% of consumers actually have that expectation when it comes to their utilities. Ammon explains the discrepancy: “Although the German market is still lacking in this segment, energy suppliers see great sales potential here.”Like a number of its competitors, Stadtwerke Heidelberg offers a wide array of electricity rates for EVs – depending on whether charging is done at home or on the road, for instance. Teigeler admits that a degree of standardization is needed. And he is not alone in this view.
Ammon is also convinced that pricing models for car charging will change considerably. A lot of power utilities are also already actively involved in setting up EV charging infrastructure. They sell wall-mounted chargers for residential customers and are installing their own chargers in their regions for commercial customers. Stadtwerke Heidelberg wants to increase the number of its semi-public chargers in the city from the current dozen or so to 150 by 2020.
Learning from the big players
When you think of energy suppliers in Germany, the big four invariably come to mind: Eon, RWE, EnBW and Vattenfall. They have long since left rooftop PV by the wayside and, arguably, have ignored the progress of the energy transition. However, the tide appears to have turned. Last year, the first three each received at least one award in various categories: EnBW for the energy transition; RWE subsidiary Innogy for energy efficiency; and Eon in heat and mobility.
EnBW, in particular, seems to have seen the writing on the wall and now offers its customers a comprehensive green power package. With its “EnBW Solar+” offering, the company combines PV and storage with an integrated wall-mounted unit for EV charging at home. In addition, a company spokesperson explains, a cloud solution lets customers use their own electricity – virtually at least – at all 25,000 EV chargers in Germany, Austria and Switzerland. According to EnBW, the company currently installs an average of 500 PV systems with battery storage for on-site consumption in households every month.
Innogy has similar products for householdes. It offers complete solutions for PV systems with and without storage ,and an optional wall-mounted charger – enabling consumers to charge EVs with their own solar power from the roof. The RWE subsidiary is also proactively building out the charging infrastructure with a little financial help from the German state of North Rhine-Westphalia. Eon, too, now offers a wide range of services. In the PV segment, it has products for both private households and industrial customers. The same goes for electromobility.
But in the era of the energy transition, it is not necessarily the case that large utilities have a head start or are better positioned than their small municipal counterparts. “It is always a question of how these offerings are fleshed out and handled. Much depends on the commitment of the people behind the products,” says EuPD’s Ammon. At the same time, the competitive situation in the energy market cannot be overlooked; there is not only massive competitive pressure among the established players, but also companies traditionally active in the renewables sector are now trying to establish themselves as utilities. Ammon summarizes the situation: “Consolidation has begun and, at the same time, new players such as sonnen and Hanwha Q-Cells are muscling their way onto the market, further increasing the pressure on municipal utilities and traditional energy suppliers.”
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