SolarPower Europe: On the brink of grid parity

Engerati discusses some recent success stories presented by the solar sector with Dr Mercè Labordena, senior policy advisor and leader of SolarPower Europe’s Digitalisation Task Force.
Published: Thu 08 Aug 2019

Solar is the world’s fastest growing power generation source, and although growth slowed in 2018 industry association SolarPower Europe expects its rate to return to double digit figures over the next three years, driven primarily by China, India and the US. As generation and storage costs continue to fall and solar approaches grid parity, the forecast is looking very sunny indeed. Engerati discusses some recent success stories and new opportunities for digital solution providers presented by the solar sector with Dr Mercè Labordena, senior policy advisor and leader of SolarPower Europe’s Digitalisation Task Force.

E: What are the opportunities and barriers for solar that arise from smart meters, smart buildings and smart grids, and how can more digital solar offerings help projects increase profitability?

ML: Smart meters, buildings and grids support a more flexible and resilient energy system, paving the way for a solar-powered future. The digitalisation of the energy system enables the integration of sectors such as buildings, but also industrial facilities or transport, directly into the energy system. This unlocks additional sources of flexibility and enables all ‘solar-connected infrastructures’ – buildings, but also electric vehicles (EVs) – to adapt to the energy system’s needs in order to generate further value. For example, smart appliances and building automation help to optimise the solar self-consumption ratio, reducing the need to consume from the grid, and enable supplementary revenue generation, such as introducing self-consumed electricity into the grid or automating energy use depending on electricity prices.

Smart meters generate extremely valuable data which spurs the creation of new and better energy services from solar companies. Our Grid Intelligent Solar report finds that smart grids, be it through the integration of sensors in the grid or through the development of online flexibility platforms, allow an optimised integration of solar into the grid. They help solve the problem of congestion and bottlenecks at more granular levels and therefore increase the use of solar generation and flexibility in ancillary and system services, thereby enhancing solar business models through additional remuneration. When it comes to solar business models, the monetary value of ancillary services could play a much greater role than today.

Better integrating solar power into the electricity grid means more economic benefits for EU citizens. It reduces the costs related to grid reinforcement and upgrading, and the costs related to support schemes as more value can be generated from the ancillary markets, both of which directly affect the consumers’ bills.


E: How will digital technology transform the solar generation sector?

ML: Digital technologies are the pillar of tomorrow’s renewable electricity system. Digitalisation along the whole solar value chain, such as automation of the manufacturing of solar panels and other system components, the use of big data and the use of sensors to optimise the operation and maintenance (O&M) of the solar systems, is enabling important cost reductions and supporting the increased competitiveness of solar. But digital technologies can also create additional value: large grid intelligent solar plants equipped with advanced power electronics or smart buildings equipped with solar panels can provide flexibility services to the local transmission system operator and create additional remuneration streams.

E: How is storage changing the viability of solar?

ML: Storage can increase the quality of the solar power output by shaving generation peaks and also by increasing the self-consumption ratio of a solar consumer. Battery storage is also capable of providing very short-term ancillary services to the grid and will therefore support the grid integration of solar. This is a hugely positive transformation for the electricity sector and is already happening today. For instance, half of the new residential solar systems installed in Germany are equipped with battery storage. 

E: How will solar and demand response interact to form fully aggregated Virtual Power Plants?

ML: Solar and demand response can be pooled to form aggregated Virtual Power Plants and provide flexibility services to grid operators. For example, the German company Next Kraftwerke is operating a virtual power plant aggregating decentralised power producers and providers of demand response services, which provide grid services to the German transmission system operators (TSOs).

Another example is the ‘Sonnen Community’, a community of solar and storage prosumers brought together by the company Sonnen, which has recently been prequalified to provide primary frequency reserves, which require a 30-second reactivity, to German TSO TenneT. This type of frequency services is usually provided by conventional power plants thus we are very happy to see solar power contributing! This is the result of a two-year pilot project with TenneT, and SolarPower Europe hopes that this model can be replicated elsewhere in Europe.

E: Can you tell us about your Go Digital Declaration?

ML: SolarPower Europe’s ‘Go Digital Declaration’ is the result of the work of our Digitalisation Task Force. It contains the main policy recommendations that will enable digital and solar models. These policy recommendations were important in the context of the negotiations of the Clean Energy Package, a set of legislative proposals with the goal of providing a framework for the EU energy sector to accelerate the clean energy transition in Europe. The ‘Go Digital Declaration’ was a success, as the Clean Energy Package, adopted at the end of 2018, recognised peer-to-peer trading, aggregation, and required member states to develop enabling frameworks for these technologies. The ‘Go-digital Declaration’ also highlights the need for Europe to “step-up its game” to further digitalise the energy sector and establish the European Union as a technological leader in digital energy services and infrastructure.

E: What are the next steps for the project?

ML: There is much more that still needs to be done to unleash the full benefits of the digitalisation of the solar sector. In December 2018, we published a report on the regulatory best practices that enable solar and digital models, and we have promoted these regulatory best practices in Europe.

Following the European elections, the new European Parliament and Commission are currently taking office and the digitalisation of the energy sector will clearly be high on the agenda, for instance, regarding the data economy or cyber security standards. SolarPower Europe will work actively with the European institutions to build a new policy framework on these issues.

E: Are there any recent technology breakthroughs?

ML: Technology, especially in a dynamic sector such as solar, is constantly evolving. Digital solar technologies have a promising future in this regard. For example, recent breakthroughs in power electronics – such as inverters – are paving the way for a new generation of solar plants, that are smarter and more flexible, with the ability to provide system services to network operators or directly participate in capacity auctions in some countries.

E: What policy changes are coming that might influence the cost-effectiveness of solar projects?

ML: The recently adopted Clean Energy Package has set ambitious objectives for the deployment of solar power in Europe: 32% of the energy consumed in Europe should be renewable by 2030 and this objective will be revised in 2023. The Clean Energy Package also contains a multitude of positive measures, such as simpler administrative procedures for solar projects and to facilitate the uptake of Power Purchase Agreements or self-consumption. However, the implementation of these provisions by member states at national level will be the real game changer for the deployment of solar power in Europe. Drafting ambitious and robust National Energy and Climate Plans (NECPs) will be key.

In parallel, the European Union is currently working on a new industrial strategy for European companies. This will be an occasion to support the industrial value chain in the clean technologies sector, including digitalisation, with huge opportunities for European businesses. SolarPower Europe has published detailed recommendations on the central elements that can support the European solar industry which will be a priority for us in the coming months.

E: Are any European countries doing better than others at developing solar, and why?

ML: Certain countries are indeed leading the solar industry: a new example is Portugal, where the recent solar auctions broke the world record of solar prices with bids at €14.8/MWh. This means reduced carbon emissions in the country and lower electricity prices for consumers. Solar in Europe has entered a new growth phase but remains dispersed. Our Global Market Outlook for Solar Power 2019-2023 found that solar installations in Europe as a whole grew by 21% to 11.3GW in 2018, yet Germany, France and the Netherlands alone accounted for more than half of the annual installed capacity.

The key here is to create the right environment to incentivise investments: ambitious plans for the development of solar power, and visibility and clarity on the support measures for small-scale and large-scale solar with clear auctions planning. Amongst European member states, the quality of the regulatory framework significantly varies which impacts the cost of capital. It can rise up to one third of a solar project’s development cost in some countries, making it much more expensive for developers and governments.

SolarPower Europe will hold its next Digital Solar & Storage event in Brussels on 5-6 November to discuss with key stakeholders from industry and politics what’s needed to keep up the new solar momentum in Europe:


Dr Mercè Labordena, senior policy advisor and leader of SolarPower Europe’s Digitalisation Task Force.