Solar PV market, prices, profitability and policies in Finland Presentation by Karoliina Auvinen in Vaasa EnergyWeek 2017

1. Solar & Wind Exchange
Vaasa Energy Week , Vaasa, Finland
22 March 2017
Solar power
in Finland
FinSolar Project Director &
Researcher,
M. Sc. (Eng.) Karoliina Auvinen

2. Sun shines in Finland
• Cool climate is favorable for solar energy production
• Finnish solar energy industry: approx. 100 companies!
27.3.2017
Karoliina Auvinen
2

3. 27.3.2017
3

4. Grid connected solar PV capacity in
Finland - market growth over 100 %/y
during 2014-2016
3/27/2017
Karoliina Auvinen
4
2016
20 MW
2015
8-10 MW
2014
4 MW

5. Source:http://www.ren21.net/wp-content/uploads/2016/10/REN21_GSR2016_KeyFindings_en_10.pdf
Estimated growth
in 2016: +70 GW
Global 300 000 MW 15 000 times more than
Finland’s 20 MW solar PV capacity

6. Source:http://www.ren21.net/wp-content/uploads/2016/10/REN21_GSR2016_KeyFindings_en_10.pdf
Germany’s 40 000 MW is 2 000 times more
than Finland’s 20 MW solar PV capacity

7. Solar PV system prices in 2016
– price reduction 5-10% from 2014-2015
Size, kW Prices €/kWp (VAT 0%)
Grid connected > 1000 kW (1 MW) 1 200 – 1 000 €/kWp
Grid connected > 250 kW rooftop 1 300 – 950 €/kWp
Grid connected 10 – 250 kW
rooftop
1 350 – 1 050 €/kWp
Grid connected < 10 kW 2 000 – 1 300 €/kWp
Offgrid > 1 kW PV + battery 3 500 €/kWp
Offgrid < 1 kW PV + battery 5 000 €/kWp
27.3.2017
Karoliina Auvinen
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Source: http://www.finsolar.net/aurinkoenergian-
hankintaohjeita/aurinkosahkon-hinnat-ja-kannattavuus/

8. Solar PV system LCOE prices, c/kWh
(30 year lifetime)
System
price
LCOE
price
(VAT 0%)
Example
application
Subsidies &
taxes
Application
LCOE price
Cheapest
950 €/kWp
4,2 c/kWh
Rooftop 900 kW
PV system in
industrial site
25 %
investment
grant, VAT
0%
3,3 c/kWh
Most
expensive
2000 €/kWp
8,6 c/kWh
Small 3 kW
rooftop in house
cooperative
No
subsidies,
VAT 24%
11 c/kWh
27.3.2017
Karoliina Auvinen
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9. Electricity purchase prices c/kWh
Compare: Solar PV
LCOE 11 - 3,3 c/kWh

10. 27.3.2017
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) 1-8%
Price of PV
system eur/Wp
without
investment aid
Price of PV
system eur/Wp
with 30%
investment aid

11. Solar PV & Finnish energy policy
• Solar electricity self-consumption exempted from grid fees
and electricity taxes up to 100 kVA system size or 800
MWh/year production limit
• 25-40% investment grants available for municipalities and
companies - housing sector & state properties are excluded
• Single houses can get household tax deduction from solar
system installation work (approx. 5-10% from the whole
investment price)
• House co-operatives are excluded from all incentives!
• Government doesn’t have solar energy targets, strong focus
in bio energy
• Solar PV is excluded from the current feed-in tariff system
• Next support scheme based on auctioning - solar PV is not likely to
be competitive with wind power
Karoliina Auvinen

12. Policy challenge: Solar PV in energy
communities
• Current legislation doesn’t
aknowledge house co-
operative grids
• FinSolar experiment project
• Piloting virtual metering and
micro-grid solutions
• Goal to unlock the solar PV
market for the house co-
operatives: 2 million people
live in 80 000 apartment
buildings in Finland
Karoliina Auvinen
Photo: Janne Käpylehto

13. Distribution grid
Net metering service not legal now?
Kiinteistö
sähkö
Oman
sopimuksen
asukkaat
Aurinko-
sopimuksen
asukkaat
Aurinkosähkö-
tuotanto
Lisämittari
As.Oyn
Aurinkoenergia
”osuuskunta”
Sähkö-
pää-
keskus
Challenge: Now every
apartment meter calculates
taxes & grid fees
Solution:
taxes & grid fees
for solar
calculated at the
grid connection
point by net
metering service
provider

14. Grid challenge: Will solar PV owners
save grid fees in the future?
Karoliina Auvinen
Case calculation:
If energy based
grid fees change
to power-based
or fixed tariffs,
the payback time
of municipality’s
solar PV
investment
changes from 13
to 23 years

15. Comparison of PV capacity and
policies between Finland, Sweden and
Denmark
27.3.2017
Karoliina Auvinen
15
Support policies Installed
capacity
Finland Investment grant, no grid
fees and taxes up to 100 kVA
or 800 MWh
Approx.
20 MW (2016)
Denmark Premium tariffs, net-metering 791 MW (2015)
Sweden Investment grants, subsidy
for residential battery storage
costs, tax returns
85 MW (2015)
Sources: https://cleantechnica.com/2016/11/22/sweden-will-offer-60-subsidy-residential-battery-storage-costs/,
https://www.worldenergy.org/data/resources/region/europe/solar/, http://www.res-legal.eu/search-by-
country/denmark/single/s/res-e/t/promotion/aid/premium-tariff-law-on-the-promotion-of-renewable-energy/lastp/96/

16. Solar energy is
already feasible in
Finland, but market
growth would
improve with
support policies

17. Thank you!
More information:
www.finsolar.net
www.smartenergytransition.fi
Contact:
Karoliina Auvinen
karoliina.auvinen@aalto.fi
+358 50 462 4727
Aalto University, Helsinki