Solar energy in Finland: feasibility and policy perspectives

1. FinSolar Project Lead, M Sc. (tech.) Karoliina Auvinen
EnergyWeek 2015, Renewable Efficient Energy -
seminar
University of Vaasa, 17.3.2015
Solar energy in
Finland: feasibility
& policy
perspectives

2. FinSolar project aims to boost solar
energy market growth in Finland
• Domestic market is important for new business
model, technology and expertise development
• We identify investment challenges and propose
solutions related to financing and regulation
• Investor groups: municipalities, commercial sector
and house co-operatives & export group
• Main funder Tekes
• Duration 9/2014-12/2015

3. Municipalities:
Helsinki
HSY
Jyväskylä
Mikkeli
Sodankylä
Tampere
Tuusula
Vantaa
Companies:
Caverion
Cencorp
FCG
Helsingin Energia
IKANO Retail Centres
Finland Oy
Kaukomarkkinat
Mäntsälän Sähkö
SaloSolar Oy
Savosolar Oy
S-ryhmä
Sundial Finland
Ruukki
Associations,schoolsandco-operatives:
Aalto-yliopistokiinteistötOy
As OyAuringonsäde,Helsinki
As OyKuopionPuistokatu4,Kuopio
As. OyLiinasaarenkuja3-5,Espoo
Aurinkoteknillinenyhdistys ry
Ekoenergyinternational
Keski-SuomenOpiskelija-asuntosäätiö
KouvolanseudunammattiopistonBiosampo
Lappeenrannanteknillinenyliopisto
MetropoliaAmmattikorkeakoulu
SuomenLähienergialiittory
SYKE,KohtiHiilineutraaliakuntaa(HINKU)-
hanke
WWFSuomi
Ahjo Energia
Aura Energia
Aurinkoa Oy
AurinkoinsinööritOy
BaseNCorporation
CO2.FIOy
CurrentfinOy
ECCANordic
Finnfund
FinnwindOy
GreenEnergyFinland
GreenesOy
GreenstreamNetworkOy
GrexelOy
JoukonVoimaOy
Motiva
NapsSolarSystems Oy
NocartOy
SEAM Group
Solar-Arena.com
SolarvoimaOy
SolecoOy
SolerasOy
Solved–The Cleantech
Company
SunEnergiaOy
TelogOy
UtuapuOy
Partners:

4. Solar PV system prices in Finland
follow declining German cost trend
17.3.2015
4
PV system prices
in Finland 2014

5. Solar collector prices in decline –
installed capacity growing
17.3.2015
Source: http://www.iea.org/publications/freepublications/publication/FeaturedInsight_HeatingWithoutGlobalWarming_FINAL.pdf
5

6. Investment cases
from Finland
17.3.2015
6

7. Vuores-house, educational center,
Tampere 2014
• 45 kW PV power plant
• ROI 6,7%
• Payback period 14,5
years
• Product lifetime 30
years
• Electricity production
cost 6 c/kWh during
25 years
17.3.2015
Karoliina Auvinen
7

8. Commercial building, Pori 2014
• PV power plant
49,5 kW and heat
pump system 60
kW
• ROI 9%
• Payback period 11
years
• Product lifetime 30
years
• Electricity
production cost 6
c/kWh during 25
years
17.3.2015
Karoliina Auvinen
8

9. Solar collectors
profitable in oil
heated houses
Four solar collectors produce approx. 4000 kWh/year - in a
house with oil heating it means savings of 450 oil liters and 500
euros every year

10. House co-operative Erämaantie,
Kangasala 2014
17.3.2015
Karoliina Auvinen
10
• Solar collectors 27,6
kWth and heat pump
system 90 kW
• ROI 11%
• Payback period 10-12
years
• Product lifetime 30
years
• Heat production cost
3,8 c/kWh during 25
years

11. Hybrid central heating system by Suomen Ekoenergia, Lahti, Finland 2013 (240 m2)

12. Ruukki Roof Integrated
Collector
Ilkka Arha 5.3.2015 Vantaa
Ruukki Classic® solar roof integrated collector
Architecturally integrated collectors

13. Value chain of solar heat investment,
equipment imported
17.3.2015
13
Kuvat: Petri Konttinen
Investment
5.150 €
Domestic rate
45%

14. Savosolar Confidential
Large area collector field installation at Sakarinmäki school, Helsinki
District heating solutions
Investment total
180.000 €
Domestic proportion
of value chain,
equipment from
Finland
57%

15. Comparison of ROI profits
• Solar energy investments in
profitable locations 6 - 11%
• Criteria:
- access to investment aid
- solar replaces oil, gas or retail
electricity
- no production to the grid
Compare profits:
• Saving account interest rates
0,1 - 1,65% (Jan 2015)
• Real estate investments 4,4%
average profit (2013)
• Heat pump investments >10%
17.3.2015
Karoliina Auvinen
15

16. 17.3.2015
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
0.11
0.12
0.13
0.14
0.15
0.16
0.17
0.18
0.19
0.2
0.21
0.22
0.23
0.24
0.25
0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2
Priceofretailelectricity[e/kWh](VAT0%)
Investment cost of solar PV system eur/Wp (VAT 0%)
9% ROI
7% ROI
5% ROI
3% ROI
Price of electricity in
investigated
investment cases in 2014
by FinSolar project
Return on investment (ROI) between 1 - 9% in solar PV investments in 2014 –
good profit for building owners with investment aid
Price of PV
system eur/Wp
without
investment aid
Price of PV
system eur/Wp
with 30%
investment aid

17. Comparison of solar electricity
production vs. electricity purchase
prices
• Solar electricity production
cost 7,4 c/kWh (with VAT
24%) during 25 years
Vs:
• Electricity retail price for
companies and cities 9
c/kWh and houses 14 c/kWh
during 2011-2014
17.3.2015
Karoliina Auvinen
17

18. Comparison of solar heat production
vs. other heating prices
• Solar heat production cost
46 €/MWh (with VAT 24%)
Vs:
• District heating 70-80 €/MWh 2012-2014
(exemption summer tarif regions)
• Electricity heating for houses 108-117
€/MWh 2012-2014
• Heating oil (with VAT 24 %) 104,4 €/MWh
• Pellet (with VAT 24 %) 61 €/MWh
17.3.2015
Karoliina Auvinen
18

19. Conlusion: Solar
energy is already
feasible, but market
growth would
improve with
support policies

20. Comparison of PV support policies
between Finland, UK, Belgium and
South Korea
17.3.2015
Karoliina Auvinen
20
Support policy
small scale
Support policy large
scale
Installed
capacity
MW
Market
growth
Finland Exemption from
grid fees and
taxes
Investment aid,
exemption from grid
fees and taxes up to
100 kVA or 800 MWh
Approx. 6
(2014)
slow
UK Feed-in Tariffs Renewables
Obligation
4979 (2014) fast
Belgium Net-metering Capital subsidies,
income tax credits
3008 (2013) fast
South
Korea
Home Subsidy
Program
Renewable Portfolio
Standard
1555 (2013) average

21. Marstal SDHP in
Denmark

22. Eight largest solar district heating plants
(SDHP) of Europe are in Denmark and
Sweden– when in Finland?
Source: http://www.solar-district-heating.eu

23. Policy recommendations
• Higher electricity and heat oil taxes
• energy investment aid program for people suffering
from energy poverty to compensate possible negative
social impacts
• Leasing or PPA financing instrument with state
guaranty for municipalities’ cleantech investments
• Extension of house renovation tax deduction from
installation work to energy saving or renewable
energy equipment
=> Benefits: more jobs, more state income, better trade
balance and improved exporting conditions
3/17/2015
23

24. Thank you!
Any questions?
Contact information:
Karoliina Auvinen, karoliina.auvinen@aalto.fi, +358 50 462 4727
Aalto University, Helsinki
FinSolar Project http://laica.fi/finsolar-in-english/

25. References / Lähteitä
• Gaia Consulting. 2014. Saatavissa:
https://www.tem.fi/files/41148/Sahkon_pientuotannon_kilpailukyky_-_loppuraportti_-
_final_%28ID_15372%29.pdf
• Kallio Atte ja Rasinkoski Asko. 2014. Säätövoimaa Suvilahden aurinkovoimalasta [blogi].
Saatavissa: http://blogi.helen.fi/suvilahden-aurinkovoimalasta-saatovoimaa/
• Tahkokorpi Markku. 12/2014. Case Vuores-talo. Saatavissa: http://laica.fi/2015/01/16/case-
vuores-talo/
• Tahkokorpi Markku. 12/2014. Case KOy Aurinkopaja yrityskiinteistön
aurinkosähköinvestointi. Saatavissa: http://laica.fi/2014/12/30/case-koy-aurinkopaja-
yrityskiinteiston-aurinkosahkoinvestointi/
• Kauppalehti. Talletuskorot [verkkojulkaisu]. Säästötilit [viitattu: 23.1.2015]. Saatavissa:
http://www.kauppalehti.fi/5/i/porssi/korot/index.jsp?selected=talletuskorot
• Kaleva Hanna. 2014. The Finnish Property Market 2014. KTI Kiinteistötieto Oy. Saatavissa:
http://www.kti.fi/kti/doc/fpm/KTI_FPM14_net.pdf
• Sulpu ry. 2014. Lämpöpumppujen merkitys ja tulevaisuus. Saatavissa:
http://www.sulpu.fi/documents/184029/209175/Lampopumppujen-merkitys-ja-tulevaisuus-
SULPU.pdf
• Tilasto: Energian hinnat [verkkojulkaisu]. ISSN=1799-7984. 3. Vuosineljännes 2014. Helsinki:
Tilastokeskus [viitattu: 23.1.2015]. Saatavissa:
http://www.stat.fi/til/ehi/2014/03/ehi_2014_03_2014-12-17_tie_001_fi.html
• Korea Energy Management Corporation, Annual report IEA-PVPS-2013-Korea
17.3.2015
25

26. Extra material

27. Solar energy cost levels start to be
competitive with fossil fuels
20.1.2015
FinSolar

28. Electricity spot
prices in summer
17.3.2015
28
Hour Spot price c/kWh
Day 22.6.2014 23.6.2014 24.6.2014
00 - 01 2,71 2,54 2,96
01 - 02 2,27 2,31 2,90
02 - 03 1,99 2,07 2,83
03 - 04 1,76 1,99 2,80
04 - 05 1,59 2,02 2,79
05 - 06 1,46 2,39 2,90
06 - 07 1,36 3,04 3,58
07 - 08 1,42 3,25 4,49
08 - 09 1,87 3,60 4,80
09 - 10 2,18 3,43 5,09
10 - 11 2,48 3,40 5,19
11 - 12 2,47 3,59 5,54
12 - 13 2,43 3,65 4,79
13 - 14 2,45 3,49 4,52
14 - 15 2,35 3,51 4,20
15 - 16 2,33 3,79 3,99
16 - 17 2,30 3,52 3,87
17 - 18 2,48 3,66 4,08
18 - 19 2,32 3,59 4,20
19 - 20 2,58 3,33 4,22
20 - 21 2,72 3,34 3,77
21 - 22 2,77 3,30 3,65
22 - 23 2,85 3,25 3,64
23 - 00 2,81 3,14 3,39
0
1
2
3
4
5
6
c/kWhhuhti-syyskuussa

29. 20.1.2015
FinSolar
7M€ sähköyhtiön
hallinnoimaa 3,3%
‘joukkorahoitusta’http://www.energie-graz.at/kundenservice/kundenservice/de_strom_solar-anleger