Photovoltaics in Germany Market Development and Perspectives

Photovoltaics in Germany Market Development and Perspectives Matthias Reitzenstein German Solar Industry Association (BSW-Solar)

German Solar Industry Association 2 TASK To represent the German solar industry in the solar thermal and photovoltaic sector VISION A global sustainable energy supply provided by solar (renewable) energy ACTIVITIES Lobbying, political advice, public relations, market observation, standardization EXPERIENCE Active in the solar energy sector since more than 25 years MEMBERS More than 850 solar producers, suppliers, wholesalers, installers and other companies active in the solar business HEADQUARTERS Berlin 02/12/2010 BSW-Solar

More investments in PV by families compared to the big four utilities (in DE) 3 Investments of the big four utilities in power plants Private Investments of families in solar PV and solar thermal systems 02/12/2010 BSW-Solar

Global PV Market 2010 4 Global PV Market 2008: 6.000 MWp 2009: 7.400 MWp 2010: 15.300 MWp Europe North Amerika Asia / ROW Estimates! Source: nat. PV Industry associations, BSW-Solar estimates Update: 02/2011 BSW-Solar

Development of the German PV market 5 Market Data Photovoltaics in Germany 2010* Newly installed power 7,000 MWp Total installed power 16,800 MWp Solar electricity produced 12,000 GWh No. of new systems installed 240,000 Employees 130,000 (Source: BSW-Solar) * Preliminary figures 18000 16000 7.000 14000 12000 10000 Milestones 1991: First Feed-in Law (FIT with low tariffs) 1991-1995: 1,000 roofs program (grants) 1999-2003: 100,000 roofs program (loans) 2000: Renewable Energy Sources Act (EEG) (FIT) 2004 & 2009: Amendment (revision) of EEG (FIT) 20010: Amendment (revision) of EEG (FIT) 3 3 3 3 4 7 12 10 12 42 78 118 139 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 670 951 843 1271 1809 3806 8000 6000 4000 2000 0 annually installed cumulated installed BSW-Solar

FIT in Germany: Basic principles 6 Priority connection for all PV systems granted Each solar kwh must be purchased by the utility Fixed feed-in tariff payment over 20 years Reduction of the feed-in tariff each year by approximately 9% for newly installed PV systems (Degression) Feed-in tariffs are no state subsidy, costs are redistributed to the rate Government Provides for grid access, sets FIT Feed-in tariff RES-E Producer renewable electricity Utility Regulation / Law conventional electricity Electricity consumer Money Power Electricity rates + FIT surcharge 02/12/2010 BSW-Solar

Grid-connected PV in Germany 7 Each kwh of solar electricity produced is fed into the grid, sold to the utility and paid at a fixed price Typical data of a small PV system as fo Oct. 2009 (per kwp) Investment costs: 2900 Annual production of solar electricity: Feed-in tariff: 900 kwh/a ct 33.03/kWh guaranteed for 20 years Feed-in payment: 297/a Interest rates (KfW): 2-4%/a eff

Market segments of on-grid PV systems Image: Sharp 8 Ground- Rooftop BIPV mounted Effort of mounting residential homes 1-10 kwp 18% Image: Solarwatt Market share in 2009 Size of the system Image: Schüco <1% multi family houses, public + social buildings, farms, commercial plants 10-100 kwp 59% Image: Solarwatt Image: Geosol Image: Grammer Large and very large commercial > 100 kwp Image: BP 17% Preliminary Figures which may still be subject to change Source: Statistics of the Federal Network Agency, BSW-Solar Estimates 6% Image: 12/03/2010 Geosol BSW-Solar

PV feed-in tariffs in 2011 9 Feed-in tariff < 30 kwp > 30 kwp > 100 kwp > 1000 kwp Rooftop systems (on buildings and on noise protection walls) 28,74 ct 27,33 ct 25,86 ct 21,56 ct Ground mounted systems Commercial areas / along roads / constructions Conversion / rehablitation areas / 21,11 ct 22,07 ct

Direct consumption strengthened 10 Option can be chosen by PV system operator Direct consumption requires additional meter to be installed PV system does not longer feed all power to the grid kwh produced and consumed is in addition remunerated Aims to reduce overall FIT payments significantly 02/12/2010 BSW-Solar

New rules for direct consumption 11 Strengthening direct-consumption of PV electricity: Direct consumption was introduced in 2009 already The economic advantage will increase from 3.9 cent to 8 cent, if more than 30% of the produced energy is self-consumed Up to 30% the advantage remains at 3.6 cent Max. system size 500 kwp (before 30 kwp) Temporary provision until 31.12.2011 Direct consumption calculation for PV system <30kWp as of 01.01.2011 Share of direct consumption <= 30 % > 30 % Remuneration direct consumption (net): 12.64 Ct/kWh 16.74 Ct/kWh Retail electricity savings (gross): 20.00 Ct/kWh 20.00 Ct/kWh Sum =32.64 Ct/kWh =36.74 Ct/kWh FIT remuneration (net): 28.74 Ct/kWh 28.74 Ct/kWh Incentive (compared to FIT) 3.90 Ct/kWh 8.00 Ct/kWh 02/12/2010 BSW-Solar

PV system prices decrease steadily 12 Overall price reduction by 43.3% since Q2/2006 Average annual reduction of 12.4% p.a. Q3/10: Average PV system price for systems < 100 kwp: 2,834 /kwp Source: BSW-Solar Price Index 02/12/2010 BSW-Solar

- Graphics and tables (source: BMU) The original is in German. http://www.bmu.de/erneuerbare_energien/downloads/doc/42038.ph p 25

- Graphics and tables (source: BMU) The original is in German. http://www.bmu.de/erneuerbare_energien/downloads/doc/42038.ph p 26

- Graphics and tables (source: BMU) The original is in German. http://www.bmu.de/erneuerbare_energien/downloads/doc/42038.ph p 27

Conclusions 28 Germany has built up the largest PV market of the world Germany has choosen the feed-in-tariff (FIT) to promote it s market growth, but other support schemes are possible German companies and R&D institutes have developped a wide scale of technologies and applications The FIT has proved to be extremely successfull to trigger price decrease and technological development in Germany but market size has grown beyond long term capacity Consumer Grid Parity will be reached in many markets between 2011 and 2014 New markets have to emerge to allow additional market growth New products and applications have to be developped German companies and research institutes are co-operate to develop products for new markets 02/12/2010 BSW-Solar

29 Future: Don t be afraid of the future, it won t start before tomorrow. Zarko Petan (*1944) slow. aphorist

Thank you for your attention Matthias Reitzenstein Energieforum Stralauer Platz 34 D-10243 Berlin Tel: +49 30 29 777 880 Internet: www.solarwirtschaft.de German Solar Industry Association (BSW-Solar)