Small-scale solar saves energy system billions in fuel, CO₂ and grid costs – but benefits go unaccounted
Brussels – Households and small businesses could recoup investments in solar panels at least twice as fast as they currently do, new research has found.
The research, by energy consultancy ecoSynergies, applies a fairer approach to the pricing of solar power – in line with newly adopted EU energy rules. The approach is already used in the United States, but has never before been applied in a European context.
While the study focuses on two Spanish case studies, the new approach would to lead to very similar results across different European countries. Spain has some of the best conditions for solar energy in Europe, but also has some of the most restrictive laws for people and small businesses producing their own electricity with solar panels.
The study finds that the new cost-benefit analysis of small-scale renewables would slash the average payback period from 9-11 years to 5.5-7 years for households, and 6.5-7.5 years for small businesses. Those suffering from energy poverty would benefit most, with their payback period dropping from 25 to 7 years.
The savings would come from an electricity price that reflects overlooked benefits to the energy system from small-scale renewables, such as avoided fuel costs, avoided costs linked to carbon emissions, avoided operating costs for fossil fuel and nuclear plants, and power grid distribution savings. These benefits would dwarf any costs linked to power grid development (for more information on the calculations, please see our media briefing).
Greenpeace EU energy policy adviser Sebastian Mang said: “Installing solar panels is not only good for your wallet, it also benefits the whole energy system. Fairer prices for electricity from the sun, which recognise overlooked advantages like avoided fuel costs and CO₂ emissions, would encourage millions of Europeans to invest, with enormous benefits for the climate. There is a vast untapped potential for renewables – European governments must seize it to meet the challenges of climate change.”
In Spain, the research puts the net benefits generated by a small household solar installation at €440 per year (based on €59/MWh), or €1.77 billion for the whole country (based on a scenario with a 40% uptake of renewables by households and small businesses).
EU rules agreed in June this year require governments and energy operators to pay the market price for electricity from small-scale renewables. Any remuneration – the law says – may also account for avoided fuel costs and CO2 emissions, as well as other savings.
The cost of electricity from solar power has fallen by almost three-quarters between 2010 and 2017 and continues to decline.
Sebastian Mang – Greenpeace EU energy policy adviser: +32 (0)407 623167, firstname.lastname@example.org
Greenpeace EU press desk: +32 (0)2 274 1911, email@example.com
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