Economic efficiency of photovoltaic systems
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Published on: September 28, 2020 / Updated on: September 28, 2020 – Author: Konrad Wolfenstein
Since 2017, 600 MW of capacity for plants over 750 kW has been awarded annually through tenders. An additional 4 GW will be awarded through special tenders for the years 2019 to 2021.
Economic efficiency of photovoltaic systems – Image: @shutterstock|petrmalinak
Electricity from ground-mounted photovoltaic systems is subsidized under the Renewable Energy Sources Act (EEG). The remuneration for this type of system is lower than for photovoltaic systems mounted on or attached to buildings.
In 2009, the feed-in tariff was 31.94 cents per kilowatt-hour (kWh) of electricity fed into the grid. In 2010, it fell to 28.43 cents for new installations. From January 2013, it was 11.78 cents, decreasing by 2.5% per month. The 2014 amendment to the Renewable Energy Sources Act (EEG) stipulated that the level of support for ground-mounted photovoltaic systems would henceforth be determined by the Federal Network Agency through auctions, instead of the previous legally fixed feed-in tariffs. This was implemented in the Ordinance on the Auth of Financial Support for Ground-Mounted Systems of February 6, 2015 (Ground-Mounted Auth Ordinance). With the 2017 amendment to the EEG, these auctions are regulated by law. Smaller PV systems up to 750 kWp receive a legally fixed feed-in tariff without an auction.
The first bidding deadline was April 15, 2015, with a tendered capacity of 150 megawatts. The tender volume was significantly oversubscribed. The German Renewable Energy Federation (BEE) expressed concern that citizen cooperatives and plants could be squeezed out of the market, as their lower capital reserves mean they can make fewer upfront investments and bear less risk.
Tenders are criticized because international experience and economic models suggest that they counteract the intended goals of cost efficiency, expansion targets, and a diverse range of stakeholders. The pilot project for ground-mounted PV systems was intended to test the practical impact of tenders in the renewable energy sector.
Subsidy-free solar parks : Solar parks built without government subsidies are becoming increasingly common. These projects do not receive any additional market premium from the EEG surcharge. In 2018, the company Viessmann built a 2 MW solar park next to its headquarters in Allendorf (Eder), which is refinanced through on-site electricity consumption. In 2019, EnBW Energie Baden-Württemberg (EnBW) announced a series of large solar parks that are intended to be amortized solely through electricity sales on the market. Among them, the Weesow-Willmersdorf solar park, covering an area of 164 hectares, is slated to become Germany's largest solar park by 2020. The final investment decision for the 180 MW solar park was made in October 2019; EnBW states the costs are in the high tens of millions of euros. In Marlow, Energiekontor is planning to build an 80 MW solar park on an area of 120 hectares. The electricity generated there is purchased by EnBW via a long-term supply contract. At Barth Airport, BayWa r.e. renewable energy is building a subsidy-free 8.8 MW photovoltaic plant, utilizing the infrastructure of the existing solar park.
Similar projects exist for the lignite mining regions in the Rhineland and in eastern Germany.
Economies of scale and synergies can reduce the levelized cost of electricity (LCOE) in large solar parks to such an extent that feed-in tariffs are no longer necessary. The drop in solar module prices has contributed to this.
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The German Renewable Energy Sources Act (EEG) provides for the application of remuneration rates only for certain open areas (§ 37, § 48 EEG 2017):
- Sealed surfaces. Sealing occurs when the surface of the ground is sealed. Therefore, electricity from installations located on roads, parking lots, landfills, embankments, storage and parking areas, and similar sites is also compensated.
- Conversion areas are areas previously used for economic, transport, housing, or military purposes. Examples of conversion areas include spoil heaps, former open-cast mining areas, military training grounds, and ammunition depots.
- Areas along highways or railway lines at a distance of up to 110 meters.
- Arable land and grassland, only if they are located in a disadvantaged area according to Directive 86/465/EEC and have been released for PV use by the federal states.
The substructure of solar power plants typically seals only a fraction of the natural area, often less than 0.05% of the actual ground surface. The space between the individual rows, which is needed to counteract shading of individual module rows when the sun is low, contributes to an improvement in ecological quality.
Before construction begins, open-field solar power plants typically undergo an approval process at the municipal level. To utilize an area, it must be rezoned in the land-use plan as a "special solar zone." A development plan is also required, which establishes building rights for the designated area. The municipality is responsible for the planning process. It assesses the spatial impact and environmental compatibility of the project and is expected to involve all citizens and public stakeholders. In addition to the plant size, land use, and technology, the developer's landscape plan is a crucial factor in the decision-making process. This plan describes how the planned open-field solar power plant will be integrated into the landscape and how this will be ecologically enhanced. After consulting with all parties involved, the municipality adopts the development plan. The building permit is then issued.
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Open Spaces and Environmental Protection : In 2005, the German Solar Industry Association (UVS), together with the nature conservation organization NABU, published a set of criteria for the environmentally sound construction of ground-mounted solar power plants. According to these criteria, areas with existing environmental impacts and low ecological significance should be given preference, and exposed locations on highly visible hilltops should be avoided. The mounting system should be designed in such a way that extensive use and maintenance of the vegetation, e.g., through sheep grazing, remains possible. The use of pesticides and liquid manure should be avoided. Nature conservation associations should be involved in the planning process at an early stage; if necessary – e.g., in Important Bird Areas (IBAs) – an impact assessment should be carried out. Monitoring documents the development of the natural environment through annual site visits after construction. The ecological criteria formulated here exceed the legally required minimum standards. Project developers and operators should consider this commitment when selecting sites and operating large-scale, ground-mounted solar power plants.
Studies from 2013 show that solar power plants make a significant contribution to regional biodiversity and that installing a solar park can lead to a considerable ecological enhancement of the land compared to arable farming or intensive grassland use. Besides the age of the plants, the proximity to supply habitats, ideally less than 500 meters, is the decisive factor for colonization and the biodiversity of the plant. The oldest plant with the greatest diversity of habitats in the surrounding area proved to be the best plant in terms of biodiversity in the study. Even after a short time, the reduction of agricultural practices led to an influx of butterflies and an increase in plant diversity. Furthermore, the specific use of the solar park is very important for ecological diversity: excessive grazing has a negative impact. In particular, some mobile animal species, such as butterflies, recolonized the areas after only a short time. In four of the five solar parks studied, the diversity of animal species increased significantly compared to the previously intensive arable farming practices.
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