Support Policies for Photovoltaic Systems in Europe a report by
Angelo Campoccia, Luigi Dusonchet, Enrico Telaretti and Gaetano Zizzo Department of Electrical, Electronic and Telecommunications Engineering, University of Palermo
Promotion of Photovoltaic Technology In 2001,1
the EU officially recognised the need to promote renewable energy sources (RES) as a priority measure for environmental protection and sustainable development, and in order to meet the targets of the Kyoto protocol more quickly. With European Council act 7224/1/07,2 European countries stated their aim of promoting the use of RES, with the target of RES contributing 20% of total European energy production by 2020. This ambitious goal has been confirmed with European Directive 2009/28/EC,3
the so-called ‘Climate and Energy Package’,
which represents the concrete proposal from the EU for a revision of the Kyoto protocol. The Climate and Energy Package includes:
• •
the reduction of greenhouse gas emissions by at least 20% with respect to 1990;
the production from RES of about 20% of Europe’s internal energy consumption; and
• the use of biofuels for at least 10% of European energy consumption for transport.
These goals will be attained only with an effective incentivisation policy for RES-based production systems and with a concrete effort towards the improvement of the energy efficiency of these sources.
Among the various RES-based technologies, photovoltaic (PV) technology is attracting considerable attention due to its potential to contribute a major share of renewable energy in the coming decades. The most appreciated advantages of PV technology are:
• • •
it is a free, abundant and inexhaustible source of energy; no expensive maintenance is required;
there are no conversion processes that give rise to tiresome noise emissions; and
• it can easily be integrated into existing buildings without the typical environmental impact of other ‘green’ technologies, such as wind turbines, for example.
Support Policies for Photovoltaic Systems PV technology is still very expensive, costing €3–7/watt-peak (Wp) all- inclusive for grid-connected PV systems without energy storage. Its development is strongly connected to incentivisation policies promoted by national governments and encouraged by the EU, which is striving to ensure the PV industry remains competitive on the worldwide market. The political aims of incentivisation policies for PV systems are:
• •
to promote PV technology even while the cost of PV is significantly above grid parity to allow it to achieve the economies of scale necessary to reach grid parity; and
to promote national energy independence, high-tech job creation and reduction of CO2 emissions.
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Different forms of financing for PV systems have been defined and put into effect in the last decade. The most popular in Europe are capital subsidies, feed-in tariffs (FITs), net-metering, green certificates (GCs) and tax credits.
Capital Subsidies
Capital subsidies are the most common financing model for small to medium PV systems. National governments refund part of the cost outlaid by the owner of the PV system for its installation. Capital subsidies are paid out as a function of the nameplate installed PV power of the system and are independent of the actual energy yield over time. With capital subsidies, the financial burden falls entirely on the taxpayer. One of the greatest benefits of this financing strategy is the ease of management. Examples of this kind of support strategy are the German ‘100,000 Roofs’ programme, launched in 1999, and the Italian ‘10,000 PV Roofs’ programme, launched in 2000.
At present, 18 EU countries have adopted capital subsidies as a support policy, especially for small PV systems or PV systems installed in public buildings.
Feed-in Tariffs
The mechanism of FITs involves obligating a utility to purchase electricity generated by PV systems (or, more generally, an RES-based system) in its service area, paying a tariff determined by the public authorities and guaranteed for a specific time period. The value of a FIT represents the full price received by an independent producer for any kWh of electric energy produced by a PV system, including a premium above or additional to the market price, but excluding tax rebates or other production subsidies paid by the government. With FITs, the extra cost does not fall on the taxpayer, but is distributed across the customer base of the utility. Different tariffs are defined for different countries, depending on resource conditions and socio-political situation.
Historically, FITs have been the primary mechanism used to support PV development in Europe. At present, they are applied (specifically to PV energy) in 15 EU Member States.
Net-metering
Net-metering was developed to address the need for a simple standardised protocol for the exchange of the electric energy produced by residential customers who install renewable energy systems in their homes. With net-metering, the energy produced by the PV system and injected into the grid has the same economic value as the energy sold by the utility to the customer. With net-metering, customers can offset their electricity consumption with small-scale RES over an entire billing period, using it at a different time from when it was produced, without considering when the power is consumed or generated and storing their energy in the grid. To enable this, usually a bi-directional energy
© TOUCH BRIEFINGS 2010
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