- Monthly market value for PV has been above 5 ct/kWh since August 2018
- EEG market premium model
- falling investment costs and economic upside potentials
Market values for PV systems continue to rise
In many European countries, the market parity for photovoltaics is getting closer and closer due to falling costs for PV open spaces and rising wholesale electricity prices. Experts expect that in the near future EEG plants will benefit from attractive electricity market revenues over and above the tender compensation. For the implementation of planned projects, this would mean that they could be implemented completely without state-guaranteed remuneration for the first time.
PV on track for success since mid-2018
The PV market value is naturally subject to strong seasonal fluctuations. Thus, in summer – usually very sun-intensive months – it is somewhat below the average electricity price on the stock exchange, and in winter it is above it. In order to determine a reference market value, a monthly average is calculated from all German projects listed in the PV portfolio along the marketed electricity production. This is given in cents per kilowatt hour and results from the product of the electricity price of an hour with the feed-in quantity from PV electricity in the same time window.
The industry and the market value have been recovering visibly, especially since mid-2018. Since then, the price per kilowatt hour has been well above 5 cents. However, there are already ground-mounted projects on the market today that can get by with a good 4 cents per kilowatt hour due to lower investment costs and taking into account so-called upside potential. This is made possible by factoring in additional revenues that companies expect from the electricity market and therefore include them in the bid – because that is what economic upside potential is. Their basis is the EEG market premium model. This compensates for the difference between the value and the market value. If there is a positive difference, i.e. the market value is higher than the remuneration, the achieved value is paid out as subsidy. Conversely, if there is a negative difference, producers receive a higher market value.
Future analysis
A look at the coming years and additional revenues such as auction payments help to analyse future upside potential for planned PV projects. Such analyses are also extremely helpful for investors who operate on the electricity market on their own, outside of the EEG. In addition to the revenue forecasts, the development of costs and the expansion of capacity also play a key role in the analysis. Only by taking all factors into account is it possible to give an estimate for the future.
Market Value Atlas and Revenue Reports
In order to be able to determine the future market value, Revenue Reports or Market Value Atlases can be used. The former can be used as a supplement to revenue reports on an hourly basis. This provides an accurate income forecast, giving project participants a sound basis for future investment decisions. Atlases, on the other hand, are already available online for any location and can be accessed directly as map material. This takes into account a large period of time, which means that a wide range of weather conditions can be taken into consideration and thus possible fluctuations and risks can be accurately estimated using real measured figures.