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Report calls for fairer way to calculate differential cost of PV

Phoenix Solar has released a new report - "The True Value of Photovoltaics in Germany", which investigates the differential cost of photovoltaic electricity, as well as its costs and benefits.

The study, undertaken by A.T. Kearney, seeks to present an "objective standpoint on the very emotional debate"  surrounding the costs of Solar PV borne by electricity consumers.

The findings of the study focus on four key statements:

  • "The stock market price on the Leipzig-based European Energy Exchange is unsuitable as a benchmark for pricing PV electricity. In effect, PV electricity substitutes for peak- and medium-load power stations run on gas and hard coal in the power grid. This is why the full costs of these fossil-based sources of energy should be compared with the costs of PV. A mere adjustment in the calculation reduces the charges levied for PV in 2011 by up to 18% namely from 1.67 cents per kilowatt hour (ct/kWh) down to potentially 1.38 ct/kWh. If, in 2011, the volume of systems installed comes to 6 GW rather than the 9.5 GW anticipated by transmission grid operators, charges would be as much as 24% lower and come to 1.28 ct/kWh;
  • "Macro-economic breakeven for the installed output of PV will already have been achieved by the end of 2010, which means that the benefits of PV systems installed in 2010 will outweigh the costs for the first time. Furthermore, by the end of 2011, all PV systems connected to the grid under the German Renewable Energies Act (EEG) since 2000 will have reached breakeven in Germany if, in line with assumptions, another 6 GW of peak power are installed in 2011;
  • "Measured against new gas - and hard coal-fired power stations - PV will be able to deliver competitive electricity in the next five to 8 years. A precondition is a fair recognition of costs for both PV and for power stations generating electricity from conventional sources of energy. From this point onwards, tax plus grid costs can be levied on PV electricity, similar to conventional power.
  • "PV accelerates the structural transition to an efficient, intelligent world of energy with a high proportion of decentralised power generation. PV therefore enables wide swathes of the population to participate in the supply of energy. In addition, it generates impetus for the development of innovative, decentralised energy systems and integrated applications, such as charging stations for electrical vehicles, which underpin Germany's technological cutting edge in the field of renewable energies."

"Our long-standing doubt about the accuracy of how the differential costs has been calculated up until now has been confirmed through the findings of the study", stated Dr. Andreas Hänel, Chief Executive Officer of Phoenix Solar.

"It came as a surprise to us that the combination of sharp reductions in tariffs and the high volume of installed capacity in 2010 has enabled breakeven to be exceeded in Germany. Particularly against the background of the sharp criticism of government promotion under the German Renewable Energies Act (EEG), photovoltaics demonstrates its ability from an economic standpoint of contributing to the sustainable generating of electricity in Germany", explained Jochen Hauff, leading author of the A.T. Kearney study.

More information on the study (in German) can be found here. An English version will be available soon.


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Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity