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Commercial prosumers’ role to stimulate the PV industry in SEE

Electricity prices have increased four times since October 2020 being still at 200-250 euros/megawatt-hours (MWh). That’s why a recent study conducted by think tank Agora Energiewende and Berlin-based energy policy and strategy consultancy E3 Analytics is insisting on the important role that the solar PV market in South-Eastern Europe and commercial prosumers can play to decarbonise the region’s electricity mix.

The commercial prosumer market can be considered the mid-sized market between large-scale and household-level solar PV adoption. Current policies (including feed-in tariffs and renewable energy auctions) are failing to bring sufficient new volumes of renewable energy capacity online. According to Toby Couture, lead author of the report, auctions and desired capacity are not currently going hand in hand. Some say that government plans are not ambitious enough. However, many countries in the SEE region have launched renewables tenders and auctions, not receiving the desired amount of applications. Here’s where commercial prosumers could stimulate the market. Also, encouraging more low-cost, customer-sited generation can help improve companies’ competitiveness by reducing their overall energy costs.

“Other benefits include the possibility to minimise the impact over land-use,” Mr Couture said during an online webinar to present the study. “Agri PV could help for example, or using all the available roof space.”

The report analysed the markets of Greece, Bulgaria, Romania and Croatia. Although it might be obvious to think that Greece is leading the regional PV industry (with 51 megawatts of the total customer-sited PV capacity installed), other neighbouring countries are not far away: for example, Bulgaria has approximately a 50 MW capacity installed followed by Croatia (48 MW). And if we look deeper, we will see that while in Greece that amount is built on both residential and commercial sites, in Bulgaria and Croatia it is mainly commercials.

Indeed, the energy consumption of commercial buildings in the EU is around 40 per cent more than residential ones. Furthermore, commercial electricity customers represent between 40 per cent and 70 per cent of national electricity demand in the four markets analysed.

The potential is therefore largely untapped. The International Renewable Energy Agency (IRENA) estimates that the total cost-effective solar PV potential in the region is in the range of 300 GW, or roughly 50 times the current installed capacity.

However, despite the presence of significant untapped potential, there are a number of barriers that continue to hinder the adoption of solar by the commercial sector in the region. For example, commercial customers often rent, rather than own, their buildings; energy costs are only a small part of company operating costs; time constraints and the lack of knowledge and clarity on tax implications are also important factors.

Each country will have to address these issues according to its specific circumstances. In particular, the study recommends Romania to establish clear guidelines for all permitting and approval processes in order to reduce costs and delays and to increase the size threshold for commercial prosumers from 100 kilowatts (kW) up to 1 MW or more in order to support larger project sizes. Greece should integrate commercial prosumers more fully into power system operations and raise (or remove altogether) the 20 per cent limit on surplus electricity under the self-production scheme. Croatia could introduce a clear enabling regulatory framework for corporate PPAs to help increase the market and business model innovation. Finally, the recommendation for Bulgaria concerns Distribution System Operators (DSOs) which will have to implement and enforce simplified procedures enabling commercial prosumers to connect to the grid.

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