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Solar and storage keys of the EU Green Recovery

When looking at the energy transition and the decarbonisation of the European Union economy, battery energy storage systems (BESS) will play a pivotal role in a renewable-based power system. In a recent recommendation paper, SolarPower Europe underlined how BESS technologies provide all the conditions that are vital for maximising the integration of high shares of variable renewable energy sources (VRES), as well as the grid integration of electric transport.

According to the Brussels-based association, the fastest and most direct way to support the deployment of residential storage involves cash subsidies based on the kilowatt-hour (kWh) of the storage system. Here, photovoltaic (PV) customers are incentivised to add a BESS to their PV systems through a lump-sum payment subsidy that reduces the upfront cost of the installation. This boosts self-consumption shares for households and improves grid stability in areas with a high penetration of distributed PV.

Storage can also be incentivised through a depreciation mechanism in a citizen’s yearly income or corporate tax statement. Furthermore, States can offer grants to private and commercial customers to carry out integrated renovations to decarbonise buildings.

Although they are not a direct incentive for storage, an additional set of battery storage support policies to take into account are indirect incentives in the form of support schemes to prosumers. These may include exemptions from charges, fees and taxes on the self-consumed electricity. These measures encourage prosumers to maximise their self-consumption ratio and thereby incentivise investment into storage. By extension, measures strengthening the prosumer business case, such as enabling citizen energy communities on a local level and supporting the right to self-consume, are often also beneficial to battery storage.

SolarPower Europe’s publication follows the adoption of a mandate to negotiate with the EU Council on the Recovery and Resilience Facility proposed by the European Commission in June, which will provide Member States with grants and loans to finance investments and reforms that will kick-start economic recovery through dedicated Recovery and Resilience Plans. 

The European Parliament has called on Member States to ensure that 100 per cent of Recovery and Resilience funds are allocated within the following six pillars: the just green transition, the digital transformation, economic cohesion, social and territorial cohesion, institutional resilience and policies for the Next Generation. 

“The European Parliament confirms the ambition of ensuring that EU recovery funds are directed towards activities that contribute to the objectives of the European Green Deal,” said Walburga Hemetsberger, CEO of SolarPower Europe. “As the lowest-cost, most scalable and job-intensive energy source the European solar sector is uniquely positioned to contribute to the Commission’s goals and to pave the way to a climate-neutral EU by 2050.”

Additionally, SolarPower Europe believes that Recovery and Resilience instruments are offering Member States a unique opportunity to invest in solar in order to boost the clean energy transition, enable sustainable growth and create green jobs.

SolarPower Europe recommends EU Member States take six actions to make solar the core of green Recovery and Resilience Plans. Key recommendations include the opportunities offered by boosting rolling out solar-rooftop programmes, promoting electrification, supporting the European solar manufacturing sector by investing in solar research and innovation and reconverting former coal and industrial sites with solar.

“Our recommendations show how Member States can capitalise on the opportunities offered by the solar sector and ensure recovery funds are directed towards investments that will increase the resilience of the EU economy,” commented Miguel Herero Cangas, Policy Advisor for SolarPower Europe. “ The low cost of utility-scale solar will be central to boosting the competitiveness of EU industry. Member States should maximise the impact of their recovery plans by deploying large-scale solar and storage plants through additional renewable energy tenders, supporting PPAs or de-risking finance for projects with budget guarantees. Furthermore, pursuing ambitious plans to deploy solar rooftop offers the highest emission reductions of any power generation investment, as shown by the IEA.” 

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