22 April 2013


Solar energy is a disruptive development

Impressive, but still peanuts compared to the global market leader, Germany, which boasts over 1.2 million small- and large-scale solar energy plants. Even if we take the population ratio into account, Germany is far ahead of the Netherlands, with over 32 gigawatts of solar capacity installed. How much is that? It’s equal to more than 140 million regular solar panels. An average household solar system in the Netherlands counts 8 to 10 solar panels. This means that Germany already has sufficient solar capacity to accommodate 14 million Dutch roofs, more than double the number of households in the Netherlands.
The German solar systems generate 24 terawatt hours of electricity from sunlight each year – equivalent to almost five percent of Germany’s electricity consumption. And this growth has far from stopped.

Sunny day
Wouldn’t it be great if that annual percentage were to rise smoothly to around eight percent in the coming five years (a realistic prediction)? In reality, the story isn’t as straightforward. Put simply, solar panels don’t generate a constant and steady amount of electricity. While the five percent average is respectable, it is a whole new picture if we consider that on one sunny day in May 2012, over 50 percent of Germany’s power was generated by PV systems.
Further growth would mean that, within five years’ time, 100 percent of all Germany’s power needs could come from solar energy on a sunny day like that. Theoretically, this would imply that coal and gas plants would have to be shut down on such a day or would be forced to export their electricity to neighbouring countries. But shutting down a coal plant is not a simple process, and firing it up again as soon as a few clouds blot out the sun is nothing short of impossible.

The German solar industry association has calculated that a consumer with a PV system and a personal energy storage system will consume 60 percent less electricity from the grid. These new technologies are sure to hurt the traditional energy utilities.
It will lead to less demand from customers, who will be generating and storing their own energy. It’s no wonder that, in a recent report, the Swiss investment bank UBS advised its clients to get rid of their shares in energy utilities, as they are set to lose about 8 to 10 percent of their revenues in the coming years and will lose out on substantial profit margins.
If the Dutch market continues to grow at an annual rate of 40 percent, the Netherlands can expect a figure of six percent for solar electricity consumption by 2020, and will hence follow the German scenario.

Huge costs
The question is: who will get the bill for the huge costs of the newly built coal plants in the Netherlands? Increasing electricity prices is no solution, as this will drive more people towards independent power solutions. And the government can’t put a stop to the growth of the amount of solar PV systems. Even without subsidies, it is already a more attractive proposition for homeowners and tenants to generate their own solar power than for them to pull it from the grid. Already today, it is three times more profitable to invest your money in a solar PV system than it is to put it on a savings account. Furthermore, while banks seem to come and go these days, the sun will most likely be around for at least another 20 years.

Edwin Koot is a solar energy expert and CEO of Solarplaza, an information platform for the solar energy industry.

Stay on top of the global solar market by joining one of our upcoming events.