UBA: Profitability of photovoltaic roof systems even with self-consumption endangered from mid-2022

Since July 2018, the fixed feed-in tariffs for photovoltaic roof systems have been falling monthly. The degression was between 1.0 and 1.8 percent. In October, the tariff for new systems with an output of up to 100 kilowatts is between 5.43 and 7.14 cents per kilowatt hour, depending on the size. But while the feed-in tariff decreases every month, the costs for the installation of the photovoltaic roof systems are not getting cheaper to the same extent. More of the opposite has recently been heard, so the module prices are now back at the level of 2019 and the limited installation capacities of the craftsmen are also having an effect.

The Federal Environment Agency therefore commissioned the Öko-Institut to conduct a study which came to the conclusion that many of these photovoltaic systems are now only worthwhile if at least part of the solar power generated is consumed by the user. But even this could soon be over: "If the uneven development of remuneration and costs is not counteracted, many of the systems examined will no longer be economical by mid-2022, despite proportionate self-sufficiency." This is the core statement of the recently published study "Efficiency of Photovoltaic roof systems. A differentiated consideration of full feed-in and self-consumption systems”. Therefore, a one-time increase in the remuneration rates should be considered in order to compensate for the sharp increase in photovoltaic system prices from the past quarters.

The authors see a need for rapid adjustment of the degression mechanism in the EEG in order to secure a high number of photovoltaic roof systems. “The remuneration rates for full feed-in systems would have to be 4.1 to 5.6 cents per kilowatt hour higher with average electricity production costs, depending on the system class,” it says, referring to the status of April 2021. “This increase could be a surcharge or a separate Compensation segment for photovoltaic roof systems that feed their electricity exclusively into the power grid should be implemented in the EEG.” A separate compensation segment for full feeders should therefore be created.

This is intended to promote full occupancy of the roofs with solar modules and not optimization of the photovoltaic systems for self-consumption. In order to avoid deadweight effects, the options for switching between self-consumption and the full feed-in surcharge should be restricted, according to the study.

At the same time, the authors call for the degression mechanism to be revised in such a way that the focus is on achieving the photovoltaic output required for climate protection. The "breathing lid" in the EEG should become a "breathing lifting platform". “To do this, the target expansion must first be increased to an adequate value. In the last two years, the realized additions have always been well above the target values. As a result, the remuneration rates were greatly reduced, which can subsequently endanger a high level of photovoltaic expansion," it continues. The basic degression should apply to a relatively large area if the target expansion is exceeded, for example up to 1000 megawatts above the mark. "The current basic degression (0.4 percent per month) would represent the predicted learning curve of the photovoltaic systems relatively well, but should be further reduced in the future," it continues.

The authors see an evaluation of the profitability of photovoltaic systems as a third urgent task. This should be done on a regular basis in order to counteract the remuneration rates and the degression mechanism if necessary. The evaluation should be the basis for the adjustment. "The goal should be that as many segments of PV systems as possible (full feed-in systems, self-consumption systems, different size classes) are economical and that they can contribute to the decarbonization of the electricity system when the demand for electricity increases." This is what the "current tariff configuration" says This is not the case and from mid-2022 this could "slow down significantly" the expansion of photovoltaics. “In order to compensate for the strong increase in PV system prices over the past two quarters, a one-off increase in the feed-in tariffs could make sense. At the latest when it becomes apparent that there will be no reversal of the trend in the next quarter, this measure would be urgently recommended,” according to the recommendation.

Recommendations for homeowners and installers

In the study, the authors also compiled recommendations for homeowners and photovoltaic installers. In terms of climate protection, they recommend planning your photovoltaic systems over the entire available roof area and not optimizing them for self-consumption. The investment risks are reduced with higher feed-in shares, since the opportunity revenue that can be achieved by avoiding the purchase of electricity is accompanied by forecast inaccuracies with regard to electricity demand and electricity price developments.

The purchase of a photovoltaic battery storage system is rated as not being economical. “Even the purchase of a battery storage tends to reduce the profitability of the PV system, since the increase in the realizable self-consumption usually cannot amortize the additional acquisition costs. It can therefore make sense to use the available budget for additional PV modules,” is the recommendation. From the authors' point of view, communication needs to be rethinked. Not only the own "electricity cosmos" in the house, but the goal of climate neutrality should be given more attention.

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