Revolution in the photovoltaic market
Recently, there has been a lot of buzz in the media about the government’s planned changes to the operation of the photovoltaic market, which, according to the industry, could cripple the activities of entrepreneurs who provide installation services and discourage private property owners from installing photovoltaics.
We are talking about the Ministry of Climate and Environment’s proposed draft amendment to the Energy Law. Currently, when someone owns a photovoltaic micro-installation, the surplus energy produced (e.g. during the day) is transferred to the grid and 80% of this surplus can then be used by the owner of the installation at times when the installation produces less energy (e.g. in the evening). If the bill enters into force, only generators who had an installation before January 1, 2022 will be able to account for energy in the above manner. The others, i.e. owners of installations operating as of January 1, 2022, will be obliged to sell the surplus energy generated to the grid. The selling price is equal to 100% of the average selling price of energy in the competitive market.
This means that after the amendment, installations set up after January 1, 2022, will sell surplus power at prices as if they were between power companies (let’s call them wholesale prices for simplicity’s sake), and if they need to buy (e.g., in moments of lower production), they will buy power from operators at retail prices. As a result, micro photovoltaic installations may become unprofitable.
We asked Mr. Artur Falkowski, who runs a business under the name “Artur Falkowski FOTO – LED,” providing installation services for photovoltaic panels in Krakow, Skawina and the surrounding area, for his opinion on the subject.
We have heard the opinion that the reason for the amendment may be an attempt to discourage people from setting up micro-installations, as it happens that too much of the surplus produced is transferred to the grid, putting a strain on the grid and causing danger. Is this really possible?
The regulations will be put in place because the power grid can’t handle the excess energy, causing the voltage to rise above the norm. This is currently happening on 1/3 of the installations I have installed, which is about 200 units. I have seen the problem for some time, so I mounted inverters with an output under the energy storage. When there is a subsidy for energy storage, my customers will supplement their installations with such a solution.
What could be the effects of the change in regulations?
I believe that the changes in regulations regarding the resale of photovoltaic energy will gently decelerate the market, but only temporarily. Private investors who don’t have time to install the systems by the end of the year are frightened by the new regulations and the opinion that it won’t be worthwhile. This is untrue, as the articles state that the wholesale price of electricity is approx. 20gr. This is the energy price of previous years. This year, the wholesale price of energy is in the range of 0.30zl – 0.40zl, depending on which hours. This price will continue to rise, the CO2 fee this year has increased from 20 euros to 58 euros, which will cause a sharp increase in the price of energy. I suppose the price of energy will increase from January. In addition, the European Union wants to raise fees to 70 euros/ton and charge emission fees for internal combustion vehicles. Fuel from 2023 may cost 8zl/ liter, so people will start using electric cars that charge at home.
It is possible to install batteries to store surplus energy. Is it a cost-effective solution?
I believe that when the price of energy on the wholesale market rises above PLN 0.40 per kWh – and this will happen within 2 years – private individuals will start making oversized installations, which will completely destabilize the grids and again the law in Poland will have to be changed. 80% of Poland’s power grids are suitable for replacement. They do not meet the parameters of voltage drops, short-circuit loop impedance, now in the summer we have a problem with voltage reflection. For Poland to achieve climate neutrality there must be an installation of approx. 20kWh, energy storage, electric cars, heat pump. In order for this to happen, each building will increase its connection power by a factor of 2, which will force the power utility to replace the entire power grid, which currently does not meet standards, with a grid with 2x the power (2x more transformers). This will result in a large increase in transmission fees. In my opinion, the price of 1kWh of energy in a few years will be at the level of 2zl. With such an amount, it will be worthwhile to store energy in batteries, etc. Currently, the most alternative solution is to install a PV system that is not oversized with an energy management system. Our company uses such solutions. It looks like this: when there is an overproduction of energy, for example, the domestic water heater, air conditioning, pool heating and so on will turn on. If the state is installing a PV system, ask whether the inverter is equipped with a spark detector system and whether the work will be done by subcontractors – often unqualified. On the territory of Poland, PV installation can be carried out by a person with an “E” license. Such authorizations are given to a person with basic knowledge, such as a maintenance worker, to change light bulbs. In Western Europe, such installations can be carried out by a person who has the appropriate qualifications, confirmed by an exam.
How do you see the future of backyard photovoltaics?
In the future, the installations will be equipped with energy storage facilities – this is the case in the West, the state will pay for the energy produced depending on the time of day, this is the case in Germany, for example (energy from the panels is stored in energy storage facilities and sold at night, because that is when it is most expensive).
It is worth pointing out in passing that the draft is still at the consultation stage and has not reached the Diet. On July 2, 2021, a competing draft amendment to the RES was submitted to the Parliament, assuming that the general principle of accounting for surplus electricity would be maintained, but establishing a 1:1 accounting ratio. It is therefore theoretically more favorable to prosumers. Theoretically, because prosumers will be simultaneously subject to a distribution service charge, which they do not have to pay under the current state of the law.
It remains for us to follow the topic – we invite you to check our newsletter regularly to stay informed.
