Commercial photovoltaics are growing rapidly in some European markets

Gaëtan Masson, CEO of the Becquerel Institute and operating agent for the photovoltaic power generation system project of the International Energy Agency, recently said in an interview with industry media that some commercial photovoltaic markets in Europe are growing rapidly. He noted that investors started investing in commercial photovoltaics to make huge profits.

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“If we look at utility-scale PV systems, there are three different business cases,” he said. “There is absolutely no risk in a case like bidding for procurement, whereas there is a bit more risk in signing a power purchase agreement, especially a commercial power purchase agreement. Because of the reliance on private companies, some unexpected risks may occur during the 20-year contract period. The third business case may be more risky, and that is to install a commercial photovoltaic system. But if you understand the development of the commercial photovoltaic market in Germany or Spain, and The prospect of high wholesale market prices and the prospect of huge profits from installing commercial PV far outweighs the associated risks, so it’s a different kind of investment.”

Masson said he sees this trend intensifying in some European markets such as Spain and Germany. The trend is starting to accelerate in Italy, but is not evident due to uncertainty about the country’s PV regulations, he said.

He said, “Europe is probably the best example at the moment because wholesale prices are relatively high and you can expect wholesale prices to be high. If you look at the PV systems installed in southern Spain, when the market price was 50 euros/MWh to At €100/MWh, the wholesale price is around €20/MWh ($21.17/MWh), which is obvious.”

Masson recently collaborated on a research report titled “Photovoltaic Application Trends 2023.” The report identifies key changes in the global photovoltaic industry over the past year, including two consecutive years of growth in the commercial photovoltaic market in many countries. The report points out that this shift is particularly evident in mature markets driven by high electricity prices.

The design of the electricity market plays an important role in the emergence of this business model, as both short- and long-term incentives should be provided, with Norway licensing its first commercial PV project in 2022 and 18% of Australia’s nearly 20GW of PV systems entering In the spot market, Hungary and Italy already own and operate commercial PV systems. And according to estimates, up to half of Spain’s future utility-scale PV projects may be commercial PV systems.

Masson, who co-chairs the European Photovoltaic Manufacturing Council, believes commercial PV sales will rise to a point.

He said: “California in the United States promoted the concept of the duck curve a few years ago, which is that the more electricity the photovoltaic system produces at noon, the lower the wholesale price. We have not seen this in Europe, but Spain is very It might happen at some point.”

He also said that in the process of studying the development trends of the international photovoltaic industry, he has been surprised by the inequality of data collection. An example of the impact of this failure is when utilities launch inappropriate PV tenders, studied in the case of Vietnam.

He said: “We are working with power operators and utility companies in Vietnam and they are looking at installing 800MW of PV systems. On the other hand, if you look at some African countries, no one is aware of the need to install PV systems. If they are interested in installing PV systems, How can we determine the development policy for renewable energy if we know nothing about the development of renewable energy?”

Masson said this could change if all PV industry stakeholders, from distribution operators and grid operators to PV system installers, reported installed capacity in a timely manner. Stagnant policies have also affected the scope of photovoltaic system deployment, as can be seen from the installed capacity of photovoltaic systems installed in 2022.

He said, “The photovoltaic market size in 2022 could have been much higher, but it was not the case. Why? Because it began to hit the limits of existing policies.”

Social acceptance and training a skilled workforce remain significant barriers to widespread installation and adoption of photovoltaic systems. Masson noted that these challenges are insurmountable without strong approval from policymakers.

Masson said, “The energy transition is starting to destroy jobs in traditional energy industries on a massive scale, but we must create similar jobs in the photovoltaic industry. One way to create these jobs is to expand European photovoltaic manufacturing capacity, which will inform policy development Investors are convinced that the industry creates jobs. All these political obstacles are slowing down market growth. Otherwise, the global PV industry would have installed 400 GW of PV systems this year.”

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