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					PV Policy Group
Improving the European and National
Support Systems for Photovoltaics




European Best Practice Report




Assessment of 12 national policy frameworks for photovoltaics
Country Analyses • Benchmarks • Conclusions




Supported by
PV Policy Group
Improving the European and National
Support Systems for Photovoltaics




European
Best Practice Report
Assessment of 12
national policy frameworks for photovoltaics
Country Analyses • Benchmarks • Conclusions
ImPRInt


The report has been prepared in the frame of the PV POLICY GROUP project with the support of the “Intelligent Energy
Europe” programme (EIE/04/058/S07.38564). This report is the result of the work undertaken under the working group
 “PV Policy Database and Best Practice Report”. The editorial deadline of this report was 7 November 005. As the
political framework for photovoltaics is currently changing fast in several countries parts of the country profiles might
already be out-dated. For up-to-date information please visit www.pvpolicy.org.


Authors:                                                      Collection of national market information
WIP                                                           (including questioning of national key actors):
Sylvensteinstr.                                              Austria: Otto Starzer, EVA
D-81369 Munich                                                France: Philippe Beutin, ADEME
                                                              Germany: Corinna Klessmann, dena and
Ingrid Weiss                                                      Christoph Urbschat, eclareon
Stephan Orthen                                                Greece: Christos Protogeropoulos, CRES
Johannes Stierstorfer                                         Netherlands: Job Swens, SenterNOVEM
Ralph Gisler                                                  Portugal: Luis Silva, ADENE
                                                              Slovenia: Franko Nemac, ApE
Reviewed by:                                                  Spain: Amparo Fresneda, IDAE
Job Swens, SenterNovem                                        Italy: Emiliano Fioravanti, GIFI
Andreas Veigl, Austrian Energy Agency                         Japan: Kaizuka Izumi, RTS Corporation
Andrew Machirant, Switchpower                                 UK: Rod Hacker, PV-UK
                                                              Sweden: Andrew Machirant, SESTAB
Special advisers –
technical support of research team:
Job Swens (SenterNOVEM) – Special adviser for overall
   research methodology and collection of EU-level            Print and Layout:
   information                                                set-up design.print.media
Michel Viaud (EPIA) – Special adviser for collection of
   PV industry information
Carsten Körnig (UVS – Unternehmensvereinigung
   Solarwirtschaft e.V. – German PV industry                  Photos by:
   association) – Special adviser for legal aspects of        BP Solar, Conergy, CRES, eclareon, ECN, EPIA, Iso-
   research concept                                           foton, Naps Systems, Phoenix SonnenStrom, Photowatt
Arnulf Jaeger-Waldau, EC-JRC – Special adviser for            International, Q-Cells, Schott Solar, Shell Solar, Solar-
   overall research methodology and collection of EU-         World
   level information and global
Stefan Nowak, NET, Chairman of IEA PVPS, Special
   adviser for overall research methodology and
   collection of international-level information              May 006




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      PV Policy Group – European Best Practice Report
ExECutIVE SummARy


Background –                                                    • National PV market
PV Policy Core Group and European                               • National PV industry
Best Practice Report (Chapter A)                                • National PV strategy and regulatory framework
                                                                  (overview)
This European Best Practice report forms a first, critical      • Key PV legislations (esp. feed-in-tariff system)
output of the “PV Policy Core Group” project co-funded by       • Key PV support schemes
the European Commission under the Intelligent Energy            • PV monitoring systems
Europe (EIE) programme. The Core Group, an initiative by
energy agencies from 8 European solar nations and the
European Photovoltaic Industry Association (EPIA) aims          Benchmark Analysis –
at identifying ways for the improvement and harmonisation       comparison of 12 national PV policy frameworks
of current national policy frameworks for PV.                   (Chapter C)
Thematically the report focuses on policies for PV market
promotion on the national level: demand-side measures           In this chapter, a benchmark analysis sets out to compare
defined by governments to improve the attractiveness and        the respective national PV policy frameworks with regard
security of PV investments for market actors (incl. financial   to their overall effectiveness, but also to the efficiency of
institutions), and therefore to leverage the development of     the implementation of single instruments in practice. In
sustainable sales markets for the PV industry.                  different assessment areas the policies of outstanding
Main target groups are political decision-makers on             countries (“benchmarks”) are analysed in greater detail, in
EU, national and regional levels, but also European PV          order to draw conclusions for the other countries lagging
investors (demand side) and the PV industry (supply             behind in these aspects (“gap analysis”). Overall, the
side).                                                          following assessment areas are covered in the analysis:
The objectives and structure of the report can be               • General effectiveness of national PV policy framework
summarised as follows:                                              – National PV market development (benchmark: Ger-
• Information: compilation of a detailed inventory of                  many);
    key information on 1 national markets and political            – National PV industry development (benchmark:
    frameworks (“Country analysis”)                                    Germany, followed by Japan and Spain);
• Analysis: unbiased assessment and comparison of 1                – National PV price development (benchmark: Ger-
    national frameworks with regard to effectiveness and               many);
    efficiency (“Benchmark analysis”)                               – National PV acceptance (benchmark: Germany);
• Dissemination: “user-friendly” presentation of complex        • Efficiency of single PV policy instruments: PV regulatory
    research findings for publication and dissemination to          framework (legislation)
    target groups across Europe (“Best Practice analysis”)          – Ambition of national PV targets and consistency of
                                                                       PV strategy (benchmark: Spain);
The research project underlying this report was                     – Attractiveness of conditions (feed-in-tariff) for target
coordinated by WIP in the period January–October 005                  groups (benchmarks: Germany and Spain);
and supported by 1 national partners as well as a variety          – Economic cost of regulatory framework
of European experts.                                                – Implementation and administration of regulatory
                                                                       framework in practice (benchmark: Germany)
                                                                • Efficiency of single PV policy instruments: PV support
Country Analysis –                                                  schemes
assessment of 12 national PV policy frameworks                      – Attractiveness of conditions for target groups
(Chapter B)                                                            (benchmark: Spain);
                                                                    – Economic cost (budget) for support scheme (bench-
This chapter provides a synthesized overview of the                    mark: Japan);
research findings from a comprehensive survey conducted             – Implementation and administration of support
in the 1 participating countries in the “PV Policy Group”             scheme in practice (benchmark: Germany)
project (01–07/005): Austria, France, Germany, Greece,         • Efficiency of single PV policy instruments: PV monitor-
Italy, Japan, The Netherlands, Portugal, Slovenia,                  ing systems
Spain, Sweden and the United Kingdom. Each country                  – National approach to PV market monitoring (bench-
is covered in an unbiased profile without comparison to                marks: Spain and the Netherlands);
other countries. The identical structure of each country            – National approach to PV policy performance mea-
profile reflects the most important areas covered by the               surement (benchmarks: Austria and Germany).
questionnaire:




                                                                                                Executive Summary         3
European Best Practice Analysis –                                Outlook –
transnational conclusions (Chapter D)                            recommendations to European PV Policy
                                                                 Core Group (Chapter E)
This chapter draws key conclusions from the analysis
and comparison of 1 national policy frameworks. These           This European Best Practice Report on national support
conclusions regarding key success factors (drivers), risk        schemes, PV regulatory frameworks and monitoring
factors (barriers) and general lessons learnt are valid          systems delivers a comprehensive and coherent basis
across national boundaries.                                      for next steps in the PV Policy Group project: The Core
A consistent PV strategy based on ambitious and long-            Group’s assessment, exchange and action planning
term targets, a clearly defined implementation programme         processes. During the first meeting of the thematic
and a well-conceived mix of instruments becomes the              working groups on 7 October 005 in Catania, raporteurs
groundwork for success; simultaneously, politicians must         for the three groups were appointed.
ensure commitment of relevant authorities on federal,            The thematic work groups of regulatory frameworks and
regional and local levels as key actors in implementing          support schemes will cooperate closely to include cross
strategies and programmes.                                       cutting issues of their outcomes. Further assessments of
The basic requirement for each PV policy framework is            economic costs will be included in the discussions and
its longevity and stability. Only under secure conditions        output.
will respective target groups (customers and industry)           Monitoring the policy regulations and market is crucial.
be willing to invest in PV. Stop-and-go effects must be          The thematic working group will therefore develop
avoided at all cost. For instance, a cap for feed-in laws will   recommendations on this issue.
inevitably lead to overheating of the market followed by a       The outcomes from discussions at European, National
collapse. The same can occur with subsidy programmes,            and Thematic level will finally be merged to form a joint
which have limited overall budgets. Sustainable promotion        Action Plan and Position Paper directed at decision-
strategies for PV should be independant of the usual             makers on both EU and national levels. Project results will
budgetory constraints of subsidy schemes. In absence of          then be disseminated across Europe.
the parallel introduction of the EEG (German renewable
energy feed-in law), the German 100.000 Rooftop
Programme (HTRP) would certainly have failed.
In general, the PV policy framework needs to be carefully
designed according to country-specific preconditions. A
feed-in-tariff system, for instance ought to be based on
country-specific calculation of the threshold for profitable
operation of PV plants (break-even point). It is vital that
instruments are consistent and well coordinated.
Procedures to apply for support and to install a grid-
connected PV system should be simple and clear. A number
of countries show complicated and lengthy administrative
processes for authorisation, grid access and approval of
subsidies for PV installations, representing a substantial
barrier to market diffusion.
PV policy and market monitoring is crucial on the National
and European level. An advanced approach to market
monitoring and policy performance measurements,
application of a consistent methodology and professional
tools to gather, evaluate and disseminate data is a
perquisite for effective policy control and acceptance by
target actors.




  4    PV Policy Group – European Best Practice Report
tABlE of ContEntS

A. Background – PV Policy Core Group and European Best Practice report ......................................................... 7
1. Background and objectives of the Best Practice Report (Why?) ................................................................................ 8
. Concept of the Best Practice Report (What?) .......................................................................................................... 10
3. Methodology of the Best Practice Report (How?)..................................................................................................... 13
4. Contributors to the Best Practice Report (Who?) ..................................................................................................... 15

B. Country Analysis – assessment of 12 national PV policy frameworks............................................................. 17
1. Austria....................................................................................................................................................................... 18
. France ....................................................................................................................................................................... 
3. Germany ................................................................................................................................................................... 6
4. Greece ...................................................................................................................................................................... 30
5. Italy ........................................................................................................................................................................... 33
6. Japan ........................................................................................................................................................................ 37
7. Netherlands .............................................................................................................................................................. 40
8. Portugal .................................................................................................................................................................... 44
9. Slovenia .................................................................................................................................................................... 48
10. Spain....................................................................................................................................................................... 5
11. Sweden ................................................................................................................................................................... 56
1. UK ........................................................................................................................................................................... 59

C. Benchmark Analysis – comparison of 12 national PV policy frameworks ....................................................... 63
1. Overview ................................................................................................................................................................... 64
. Efficiency of National PV policy Framework ............................................................................................................. 66
3. Effectiveness of national PV sector development ..................................................................................................... 81

D. European Best Practice Analysis – transnational conclusions......................................................................... 91
1. Overview – National PV policy frameworks .............................................................................................................. 9
. Key success factors for national PV policy frameworks ............................................................................................ 94
3. Key barriers / risk factors for national PV policy frameworks .................................................................................... 95

E.Outlook..................................................................................................................................................................... 97

Glossary ...................................................................................................................................................................... 99




                                                                                                                                                 Table of contents               5
A. BACkGRound –
PV PolICy CoRE GRouP
And EuRoPEAn BESt PRACtICE REPoRt




           A. Background – PV Policy Core Group and European Best Practice Report   7
1. Background and objectives of the                              The PV Policy Best Practice Report focuses on policies
Best Practice Report (Why?)                                      for PV market promotion on the national level: demand-
                                                                 side measures defined by governments to improve
1.1 Background and context                                       the attractiveness and security of PV investments for
                                                                 market actors, and therefore to leverage the development
The European Best Practice Report is an integrated part          of sustainable sales markets for the PV industry. In
of the “PV Policy Core Group”, an initiative by energy           this context it is also of major importance to install the
agencies from 8+ European key solar nations and the              maximum possible PV-systems in order to achieve the
European Photovoltaic Industry Association (EPIA),               goal of  % until 010 and to build up security of energy
funded by the European Commission (EC) under the                 supply in the field of renewable energies.
Intelligent Energy Europe (EIE) programme. All activities        The European Commission’s White Paper “Energy for
related to the report are summarised in the respective           the Future” (1997) sets out a strategy to double the
project plan under Work Package (WP)  “European PV              share of renewable energies in gross domestic energy
Policy Database and Best Practice Report”.                       consumption in the European Union by 010 to 1 %,
The “PV Policy Core Group” aims at identifying ways for          based on the debate of the Green Paper. The Paper
improvement and harmonisation of current national policy         includes a timetable of actions to achieve this objective in
frameworks for PV. At the same time, it is designed to           the form of an Action Plan. The calculations of increase in
support the evaluation of the coexistence of different           RES needed to meet the indicative target of 1 % share
support mechanisms in the EU member states by                    in the Union’s energy mix by 010 is also based on the
the EC. This evaluation by the EC – announced in the             projected energy use in the pre-Kyoto scenario. This
Renewables Directive (001/77/EC) – is scheduled for the         target implies that EU Member States need to encourage
end of 005.                                                     the increase of RES according to their own potential.
The Policy Group’s work programme follows three overall          The European Photovoltaic Industry Association (EPIA)
steps:                                                           estimates that 3 GWp installed PV power in 010 will
1. Comparative assessment of national policy frameworks          create approximately 100.000 jobs in the PV sector. A
   in the 1 countries (status quo)                              contribution of 3 GWp installed capacity in EU 15 from
. Mutual exchange and knowledge transfer between                photovoltaics by 010 is ambitious but realistic. With
   national energy agencies on “lessons learned” and             an actually installed capacity of around 1 GWp in 005
   “best practices” on the national level                        the European PV sector still lacks behind these political
3. Definition of own activities (action plan), as well as        objectives. Although ambitious national targets boost the
   development of proposals to politicians (position paper)      PV economy in a way that the goal of 3 GWp in 010 will be
   by the members of the Core Group                              widely exceeded, a more than 5 GWp installed cumulative
                                                                 capacity at this date is now entirely possible.
This project is co-financed under the Altener programme          The Best Practice Report takes such positive developments
and contributes to energy related policies and other EU          into account as shown in the Benchmark Analysis.
policies. The report focuses on maximum implementation           Market development is particularly well demonstrated
of PV due to the following EU Policies and Strategies.           through monitoring of new installed capacity per annum.
The Green Paper on Security of Energy Supply draws               Maximisation of installations thus helps to develop the
attention to the structural weaknesses and geopolitical,         market considerably.
social and environmental shortcomings of the EU’s energy         The “Green Electricity Directive” (001/77/EC)) of the
supply. The European economy, steadily demanding more            European Commission aims to establish a consistent
and more energy, is essentially based on fossil fuels, which     framework for the promotion of electricity generation from
make up four-fifths of its total energy consumption, almost      renewable energy sources across the EU. Currently each
two-thirds of which is imported. The Green Paper states          member country follows its own approach, with differing
13 questions as a framework for a general debate. These          levels of success. At the end of 005 the existing national
have triggered a number of responses and reactions               models were assessed by the Commission in order to draw
about the security of energy supply.                             conclusions for the achievement of political targets. The
The conclusion is that there is virtually unanimous              PV Policy Group Best Practice Report delivers important
agreement on the strategic axis of demand management:            data input of the current situation in the PV sector in 11
energy consumption must be guided and steered. The               EU-countries as well as Japan. The analysed spectrum
Commission made some very well-received proposals                ranges from the PV market, frameworks for PV, legislation
along these lines. One of these is in particular the Directive   for PV to support schemes and monitoring systems.
on electricity production from renewable sources, adopted        In Europe the Kyoto Protocol also plays a major role as
in 001, under which Member States undertake to comply           shown in the White Paper “Energy for the Future”, which
with national targets for future consumption of electricity      emphasises the imperative to reduce CO-emissions
produced from renewable energy sources, to set up a              by 5, % until 01 compared to 1990 worldwide. This
system of guarantees of origin of green electricity, and to      challenging target has to be implemented through
introduce accompanying measures to facilitate the market         maximised contribution of RES and will be significantly
penetration of green electricity on the international market.    supported by a worldwide and European increase of PV
Within this regulatory framework,  % of the electricity        installations.
consumed in the EU by 010 shall have been produced              The Lisbon Strategy mentions three main imperatives
from renewable energy sources.                                   – Growth, Competitiveness and Employment. Renewable
                                                                 energies show major potential for a contribution to the


  8    PV Policy Group – European Best Practice Report
aims set out in this strategy. Achieving the indicative target   National regulatory (legal) framework
of 1 % share of renewable energies in gross domestic            for the PV sector
energy consumption in the European Union by 010 will            PV incentive systems
lead to an increase in the market for European Industry          • Feed-in laws / tariffs for PV electricity
and will create a significant number of new jobs, directly       • Subsidy schemes for PV investments
and indirectly, especially within SMEs. The export market        • Fiscal incentive schemes for PV investments
is particularly important as Europe, with its traditional        • Tendering systems
links to Africa, South America, India and recently also          • Quota obligation systems
South-East Asia, is in a favourable position to reap the         • Green pricing systems
rewards. As shown in this Best Practice Report, the PV           Electricity sector regulations relevant to the PV market
market continues to grow significantly and is creating           • Administrative procedures for the authorisation of PV
positive effects for the alleviation of energy supply issues        installations
in developing countries. The effects are furthermore             • Grid access codes
leading to the preservation and creation of a great number       Building sector regulations relevant to the PV market
of already existing and new jobs, especially in small to         • Building codes and standards
medium-sized enterprises. Maximisation of installation           • Solar building obligations
rate, however, remains one of the key factors for the ability    • Regulations for building-integrated PV (BIPV)
to expand the PV industry and to support the employment          PV industry regulations relevant to the PV market
rate in a positive way whilst significantly contributing to      • Quality standards and regulations for PV products and
reduced costs.                                                      suppliers
Economy of scale signifies the reduction in cost per unit        • Quality standards and regulations for PV installers
that results from increased production and operational           • Safety standards and regulations for PV installers
efficiencies. Economy of scale is accomplished due to
the fact that as production increases, production costs          Nota bene: the relevant national framework may comprise
decrease simultaneously. This fact explains why the Best         legal regulations on the federal, regional or even municipal
Practice Report focuses on maximised implementation              level! Only the 1–3 most important legislations per country
in the PV sector. Not only do augmented PV installation          were analysed in greater detail.
rates result in greater acceptance due to lower price levels,
one is also able to establish a direct link to increased job     National PV support schemes for PV investments
creation and new investment opportunities supported by           • Grant schemes
Research and Technology Demonstration (RTD).                     • Soft loan schemes, in collaboration with financial
WP  is therefore designed as a groundwork activity for            institutions
the European Core Group’s later working processes.               • Other financing schemes, in collaboration with financial
In addition, its final deliverables “European PV Policy            institutions / energy service companies (ESCOs)
Database” and “Best Practice Report” as output of the
Core Group will be disseminated to target groups across          Nota bene: this area focuses on the operational analysis
Europe.                                                          of the most important subsidy schemes. These schemes
                                                                 may also be managed on the federal, regional or even
                                                                 municipal level. The 1–3 most important schemes per
                                                                 country were to be analysed in greater detail.
1.2 Thematic focus of the Best Practice report
                                                                 National PV monitoring systems
As the overall “PV Policy Group” the report focuses              • Approaches to market monitoring
thematically on the political frameworks for PV markets          • Approaches to monitoring & performance measurement
on the national level: demand-side measures defined by              of PV incentive / support systems
governments to improve the attractiveness and security           Geographic focus
of PV investments for market actors (incl. financial             This research project covers political frameworks in eight
institutions), and therefore to leverage the development of      countries (project partners): Austria, France, Germany,
sustainable sales markets for the PV industry.                   Greece, Netherlands, Portugal, Slovenia and Spain. To
Excluded from the scope of this Best Practice report             widen the scope of the study the following countries have
are national policies for Research, Technology &                 additionally been included in the research design: Italy,
Demonstration (RTD), as well as those for PV industry            Japan, Sweden and the UK.
development. However, the close relation to these policy
areas has been acknowledged and output from other
projects in this context (e.g. PV-EC-NET, PV TRAC, PV
Catapult) is referred to.                                        1.3 Target groups (beneficiaries)
Concretely, under the three headings of “national                of the Best Practice report
regulatory frameworks”, “national support schemes”
and “national monitoring systems”, the following topics          Direct beneficiaries (= main target group!)
were defined as relevant objects for the research project        • Political decision-makers (EU, national, regional)
underlying the Best Practice Report:                                – EC evaluating national policy frameworks for PV
                                                                       and proposing an EU-wide framework



                                     A. Background – PV Policy Core Group and European Best Practice Report              9
  – National (regional) governments setting national        •   PV-EC-NET / PV-ERA-NET / PV-NAS-NET / PV-NET
    regulatory frameworks                                   •   IEA-PVPS
  – Public authorities and agencies managing support        •   PV-TRAC / PV Technology Platform
    schemes                                                 •   EPIA Roadmap
                                                            •   EurObserv’ER
Indirect beneficiaries                                      •   PV Catapult
• European PV investors (demand side): financial
   investors, utilities, industry, private households
• European PV industry (supply side): manufacturers,
   system integrators, distributors, project promoters




1.4 Objectives of the Best Practice report

Central research problem (= overall goal)
• Delivery of a sound and unbiased information basis
  for the European Core Group that helps them identify
  feasible options for improvement and harmonisation
  of national PV policy frameworks in the respective 8+
  countries
• Setting the foundation of an information resource and
  analytical tool for target groups to help them improve
  the ongoing monitoring and performance measurement
  of 13 national markets and political frameworks
  (“Management Information System”)

Concrete research objectives
• Information: compilation of a detailed inventory of
  key information on 1 national markets and political
  frameworks (“PV Policy Database”)
  – Characteristics of national market and industry
  – Characteristics of national legislation
  – Characteristics of national support schemes
  – Characteristics of national monitoring (and per-
      formance measurement) systems
• Analysis: unbiased assessment and comparison of
  1 national frameworks with regard to effectiveness
  and efficiency (“Benchmark Analysis”)
  – Strengths and weaknesses of national systems,
      differentiated according to set of assessment
      criteria
  – Best practices, lessons learned and success (risk)
      factors across all countries
• Dissemination: “user-friendly” and concise presen-
  tation of complex research findings for publication and
  dissemination to target groups across Europe (“Best
  Practice Report”)




1.5 Synergies and added value to existing resources

A close alignment to networks that address PV policy
issues in “downstream” areas (research, technology and
product development, demonstration) will be ensured.
There will be an information exchange between key
persons selected who are also member of the advisory
group of the PV Policy Group in order to mutually exploit
synergies, to have access to previously collected data
and to methods applied. The PV policy group consortium
has established a close cooperation to the following
networks:


 10    PV Policy Group – European Best Practice Report
2. Concept of the Best Practice Report (What?)                Level 3: sub-chapters

2.1 Overview / modules of research project                    General structure of chapter 1
                                                              “National PV market”
Data collection /                                             • Market background and history
                  Assessment           Dissemination          • Market size and growth (on- and off-grid)
structuring
                  Country &                                     – Best and worst case scenarios
PV Policy                              Best Practice            – Regional distribution
                  Benchmark
Database                               Report                 • Case studies of a 5 and 500 kWp PV system
                  Analysis

                                                              General structure of chapter 2
                                                              “National PV industry”
In accordance with the objectives defined the research        • PV industry structure and development
project is designed to lead to three subsequent                 – Wafer manufacturers
deliverables:                                                   – Cell manufacturers
• A comprehensive PV Policy Information Set, accessible         – Module manufacturers
   via the PV Policy Group website, collecting key data on      – Component manufacturers
   1 countries that may be updated and/or extended on        • Key industry figures
   an ongoing basis by Core Group members                       – Capacities and production
• A sound Country & Benchmark Analysis, drawing                 – Revenues
   qualitative conclusions with regard to current strengths     – Investments
   and weaknesses, as well as ways for improvement and          – Employees
   harmonisation of national policy frameworks
• A “reader-friendly” Best Practice Report summarising        General structure of chapter 3
   key findings for targeted dissemination across Europe      “National regulatory framework for PV”
                                                              • Overview: national strategy and framework for PV
                                                                promotion
                                                                – National goals and targets for PV
2.2 Concept of module 1: PV Policy database                     – National strategy and programme of activities for PV
                                                                   promotion
Key facts on all participating countries are entered into       – National regulatory framework for PV (overview)
the database in a common format and structure. The              – National administration of policy framework and
information collected in the database should be as                 support schemes
objective and unbiased as possible, not to be included        • PV incentive systems
are personal opinions or demands of single key actors.          – Feed-in laws / tariffs for PV electricity
                                                                – Subsidy schemes for PV investments
Basic structure                                                 – Fiscal incentives for PV investments
The following basic structure was followed:                     – Tendering systems
                                                                – Quota obligations
Level 1: 1 countries                                           – Green pricing systems
• Austria                                                     • Electricity sector regulations relevant for the PV
• France                                                        market
• Germany                                                       – Administrative procedures for authorisation of PV
• Greece                                                           plants
• Italy                                                         – Grid access codes
• Japan                                                       • Building sector regulations relevant for the PV market
• Netherlands                                                   – Building codes and standards
• Portugal                                                      – Solar building obligations
• Sweden                                                        – Regulations for building-integrated PV installations
• Slovenia                                                    • PV industry regulations relevant for the PV market
• Spain                                                         – Quality standards and regulations for PV products
• UK                                                            – Quality standards and regulations for PV installers
                                                                – Safety standards and regulations for PV installers
Level : 5 chapters (for each country)
• National PV market                                          General structure of chapter 4
• National PV industry                                        “National PV legislation”
• National regulatory framework for PV                        General information on legislation
• National legislation for PV                                   – History and background of legislation
• National support schemes for PV                               – Political objectives and targets of legislation
• National monitoring systems for PV                            – Beneficiaries of legislation
                                                                – Structure of legislation
                                                                – Long-term security of legislation



                                    A. Background – PV Policy Core Group and European Best Practice Report          11
Contents and conditions of legislation                       indicators depend on a number of factors and cannot be
  – Amount and calculation model of feed-in tariffs          related simply and solely to the performance of a single
  – Duration and guarantee period of feed-in tariffs         legislation and/or support scheme.
  – Legal security of feed-in tariffs                        As a result the analytical part of the research project
  – Specific requirements for PV operators                   follows a rather open and qualitative approach, also
Performance assessment of legislation                        because
  – Approach to monitoring and performance                   • Quantitative data on national markets have already
      assessment of legislation                                  been collected (e.g. IEA-PVPS) and can simply be
  – Assessment of achievements of legislation                    used / transferred
  – Financing model of legislation                           • Qualitative assessments by selected experts are
  – Assessment of strengths and weaknesses of                    generally more appropriate to capture the topic in its
      legislation                                                complexity

General structure of chapter 5                               Overall the analysis is split into three chapters corres-
“National PV support schemes”                                ponding to the following logical steps:
General information on support scheme
  – History and background of support scheme                 1st step: Country analysis
  – Political objectives and targets of support scheme       Based on the information gathered in the PV Policy
  – Duration and time schedule of support scheme             Database an individual analysis of strengths and
  – Administration and actors involved in support            weaknesses of the current policy framework is conducted
      scheme                                                 for each country. In addition to evaluating the country
  – Budget and financing of support scheme                   information, the analytical part focuses on personal
  – Beneficiaries of support scheme                          judgements of different key actors questioned in the
  – Conditions of support schemes                            research phase (political actors, industry representatives,
Performance assessment of support scheme                     market actors), as well as the opinion of external experts
  – Approach to monitoring and performance                   on the European level (e.g. members of the Advisory
      assessment of support scheme                           Board of the PV Policy Group). 1 separate country
  – Assessment of achievements of support scheme             profiles form the final outcome of this analysis.
  – Assessment of strengths and weaknesses of
      support scheme                                         2nd step: Benchmark analysis
                                                             Based on the analysis of each country their national
General structure of chapter 5                               frameworks are assessed against the same set of
“National PV monitoring systems”                             performance criteria. For each criterion the best country or
National monitoring of PV markets                            national system serves as a benchmark for the assessment
  – Monitoring objectives defined                            of the others. The following overall assessment criteria
  – Market data collection                                   (or success indicators, “proxy measures”) for national
  – Market data processing, interpretation and               systems are suggested:
     dissemination                                           • Criteria to measure system effectiveness
  – Key results of national market monitoring                   – PV cost reduction
  – Critical assessment of national market monitoring           – National market development (installed MWp)
National performance management of PV policy frame-             – National industry development (sales in €, pro-
work                                                               duction in MWp)
  – Objectives and performance indicators defined               – Acceptance by key actors and target groups
  – Performance data collection                              • Criteria to measure system efficiency
  – Performance data processing, interpretation and             – Programme organisation and management
     dissemination                                              – Programme duration
  – Key results of national performance measurement             – Programme monitoring
  – Critical assessment of national performance mana-           – Programme speed, esp. handling by authorities in
     gement                                                        practice (= lead time for investors)

                                                             The ouput of the benchmark analysis is a differentiated
                                                             “ranking” per research area and benchmark criterion. It
2.3 Concept of module 2:                                     should once again be emphasised that the aim is not to
Country & Benchmark Analysis                                 compare entire (heterogeneous) systems 1:1, but rather to
                                                             highlight singular commonalities for better or for worse.
Obviously it is very difficult to assess and compare
heterogeneous national support frameworks for PV.            3rd step: Conclusion of European Best Practices
The national context is very different in each country,      Based on the benchmark analysis key conclusions are
so are the political goals that have led to the respective   drawn with regard to potential ways of improvement
policy framework. In addition, indicators to measure the     and alignment for PV policy frameworks and monitoring
performance of the framework are also diverse or not         systems. Whereas country and benchmark analysis
even clearly defined by the political decision-makers        focuses on the assessment of different national frame-
or programme managers themselves. Evidently the              works, the final Best Practice analysis is designed to


 1    PV Policy Group – European Best Practice Report
develop a central theme of conclusions that are valid
across national boundaries, especially
• Overall best practices in all benchmark areas in
   Europe
• Overall success factors for regulatory frameworks and
   support schemes in Europe
• Overall barriers / risk factors for regulatory frameworks
   and support schemes in Europe

Finally, suggestions are made with regard to effective
monitoring, performance management and controlling of
national support frameworks.
Potential key success factors (and risk factors!) for national
systems that may be worked out in the analysis may be
for instance
• Political backing, coherence with energy political
   strategy and other measures
• Backing and active involvement of key actors
   (authorities, industry, utilities, financial sector)
• Image and public interest
• Long-term commitment and continuity (of budgets)
• Flexibility (for improvements)
• Technical management, quality and commitment of
   people in charge




2.4 Concept of module 3: Best Practice Report

The final Best Practice Report shall reflect the key findings
of the analysis in a “reader-friendly” way. Its structure will
be aligned to the aforementioned steps of the analysis:
1. Executive Summary
. Country analysis (1 profiles)
3. Benchmark analysis
4. Conclusions / European Best Practices




                                      A. Background – PV Policy Core Group and European Best Practice Report   13
3. Methodology of the Best Practice Report (How?)

3.1 Resources and constraints
of the research project

The methodology of the research project has been chosen
in line with given resources and constraints.

The most important resources, which the research team
may count on:
• Access to data collected and methods applied in related
  EU projects and networks (PV-EC-NET etc.), ensured
  by active participation of Core Group members in them
  (esp. SenterNovem, CRES, WIP, EPIA)
• Active support of 8 energy agencies, acting as National
  Contact Points (NCPs) in the data collection process
  and ensuring access of researchers to national
  information and key actors (as interview partners)
• Active support of EPIA ensuring access of researchers
  to European industry information and experts (as
  interview partners)

On the other hand, the research project has to face some
constraints that have to be considered in the chosen
methodology:
• Time constraints: very stretched timing for research
  design and data collection in 10 countries (only 3
  months)
• Financial constraints: very small budgets for each NCP
  to be invested in technical support / specialist advice
  by external experts (e.g. lawyers), so single research
  activities can hardly be outsourced
• Manpower constraints: small centralised research team
  (3 persons) that depend a lot on the pro-active support
  of the other project partners (esp. NCPs, EPIA)




3.2 Research strategy and planning

The overall programming of the research project may be
summarised as follows:

Nr.    Task                                                    Main re-  Time frame      Deliverable
                                                               sponsible
0      Development research design                             WIP       01 – 0/005    Research design, V 1.0
1      Transfer methodological know-how and data from          WIP        03/005        Feedback notes
       existing resources
      Fine-tuning of research design and concept, program-    WIP        03/005        Research design, V .0
       ming of database
3      Collection of national data by means of questionnaire   NCPs       04 – 05/005   National data sets
       / checklist
4      Data evaluation                                         WIP        05 – 06/005   Intermediary report
5      Presentation of first results to European Core Group    WIP        06/005        Presentation
6      Validation of results with external experts             WIP        06 – 07/005   Feedback notes
7      Composition of Best Practice report                     WIP        07 – 09/005   Best Practice report
8      Presentation to thematic working groups                 WIP        10/005        Presentation
       TOTAL 2005                                              9 months




 14    PV Policy Group – European Best Practice Report
3.3 Research steps / elements                                  Step IV:
                                                               Data evaluation (Country and benchmark analysis,
Step I:                                                        05/2004–06/2005)
Transfer of methodological know-how and/or data                Tasks:
from existing resources (03/2004)                              • (Based on research results) Fine-tuning of concept for
Tasks:                                                            country/benchmark analysis, including consultations
• Examination of existing organisations and networks              with Advisory Board members and/or managers of
   within Europe, and their outcomes (WIP)                        other EU networks (WIP)
   – PV-EC-NET / PV-ERA-NET / PV-NAS-NET / PV-                 • Performance of country analysis – systematic inter-
      NET                                                         pretation of collected data, taking into account the
   – IEA-PVPS                                                     country-specific context (WIP)
   – PV-TRAC / PV Technology Platform                          • Performance of benchmark analysis – measurement
   – PV Catapult                                                  national data against common European benchmark
   – Admire REBUS                                                 in all relevant categories (WIP)
   – EurObserv’ER
   – Ener-IURE                                                 Deliverables:
• Personal exchange with managers of those EU-level            • Final concept and draft for country & benchmark
   networks and projects that are used as a starting point       analysis (month 6)
   for the PV Policy Database and Best Practice study, in
   order to pre-check existing information, use synergies      Step V:
   and align activities (WIP)                                  Presentation to European Core Group and validation
• Consultation of other specialists (esp. international        of findings (06–07/2005)
   lawyer, media agency)                                       Tasks:
• Collection of data and methodological input (WIP)            • Presentation of results of country and benchmark
                                                                  analysis to European Core Group and Advisory Board
Step II:                                                          (month 6) for critical discussion (WIP)
Fine-tuning of research design and concept                     • Final consultations and research based on feedback
(03/2005)                                                         from European Core Group and Advisory Board
Tasks:                                                            (WIP)
• Finalisation of questionnaire/checklist for national data    • Validation of national analyses with NCPs (WIP)
   collection                                                  • Validation of overall analysis with members Advisory
• Finalisation of research design, Version .0                    Board & EPIA (WIP)
• Final consultations of project partners, adaptations
   and approval of final Version .0 (month 3)                 Deliverables:
                                                               • Presentation to European Core Group meeting II and
Deliverables:                                                    Advisory Board (MS PowerPoint document, month 6)
• Database and research design, final Version .0 (MS          • Preliminary report, consisting of 1 analytical country
  Word document, month 3)                                        profiles, benchmark analysis and ranking (MS Word
• Final questionnaire                                            document, month 7)

Step III:                                                      Step VI:
Data collection on national systems (04–05/2005)               Composition of Best Practice Report (08–10/2005)
Tasks:                                                         Tasks:
• Collection of existing data at EU-level in co-ordination     • Composition of Best Practice report for EU-wide
  with external Advisory Board members (WIP)                     publication, Version 1.0 (WIP), representing a concise
• Collection of existing data at national level according to     summary of the aforementioned components and
  research design (by means of questionnaire / checklist)        directed to project target groups:
  and delivery to WIP (NCPs)                                     – Executive summary
• Analyse gaps between existing and required information         – Introduction
  (WIP)                                                          – Country analysis
• Personal visits of researchers with 10 national agencies       – Benchmark analysis
  to collect lacking information by direct primary research/     – Final conclusions / outlook
  conducting structured interviews (WIP, NCPs)                 • Presentation of final research results and Best Practice
• Review and completion of data sets by national                 report to members of thematic Working Groups (at
  agencies (NCPs)                                                the same time comprising representatives of national
                                                                 NCPs) at their first meeting (month 10, WIP)
Deliverables:                                                  • Final adaptations according to feedback, Version .0
• Filled-in questionnaires                                       (WIP); close collaboration with EPIA who are in charge
• PV Policy Database, Version 1.0 (may be updated                of final layout, printing and dissemination
  and extended on an ongoing basis!), consisting of 1         • First review and update of PV Policy Database by
  country profiles (descriptive data sets, month 5), later       project partners
  made accessible via project website with agreement of
  the Core Group members (month 10)


                                    A. Background – PV Policy Core Group and European Best Practice Report          15
Deliverables:                                            4. Contributors to the Best Practice Report (Who?)
• Presentation to thematic Working Groups (MS
  PowerPoint presentation, month 10)                     The following institutions and persons are involved in the
• Best Practice report (only text, English language),    implementation of the research project:
  Version .0, for EU-wide dissemination (see WP 6, as   WIP – WP co-ordination & operational management
  MS word document without final layout and design,      • Ingrid Weiss – overall co-ordination and researcher for
  month 10)                                                EU-level information
• PV Policy Database, Version .0 (month 10)             • Johannes Stierstorfer and Ralph Gisler – researcher
                                                           for Austria, Japan, Netherlands, Portugal, Scandinavia,
                                                           Sweden, Spain and UK
                                                         • Stephan Orthen (Karl Richter) – researcher for France,
                                                           Germany, Greece and Italy

                                                         12 NCPs – collection of national market information
                                                         (including questioning of national key actors)
                                                         • Austria: EVA (Otto Starzer)
                                                         • France: ADEME (Philippe Beutin)
                                                         • Germany: dena (Corinna Klessmann)
                                                         • Greece: CRES (Christos Protogeropoulos)
                                                         • Netherlands: SenterNOVEM (Job Swens)
                                                         • Portugal: ADENE (Luis Silva)
                                                         • Slovenia: ApE (Franko Nemac)
                                                         • Spain: IDAE (Amparo Fresneda)
                                                         • Italy: GIFI (Emiliano Fioravanti)
                                                         • Japan: RTS Corporation (Kaizuka Izumi)
                                                         • UK: PV-UK (Rod Hacker)
                                                         • Sweden: SPIA/SWITCHPOWER (Andrew Machirant)

                                                         Special advisers –
                                                         technical support of research team
                                                         • Job Swens (SenterNOVEM) – Special adviser for
                                                            overall research methodology and collection of EU-
                                                            level information
                                                         • Michel Viaud (EPIA) – Special adviser for collection of
                                                            PV industry information
                                                         • Carsten Körnig (UVS – Unternehmensvereinigung
                                                            Solarwirtschaft e.V. – German PV industry association)
                                                            – Special adviser for legal aspects of research
                                                            concept
                                                         • Arnulf Jaeger-Waldau, EC-JRC – Special adviser for
                                                            overall research methodology and collection of EU-
                                                            level information and global
                                                         • Stefan Nowak, NET, Chairman of IEA PVPS, Special
                                                            adviser for overall research methodology and collection
                                                            of international-level information




 16   PV Policy Group – European Best Practice Report
B. CountRy AnAlySIS –
ASSESSmEnt of 12 nAtIonAl PV PolICy
fRAmEwoRkS


This chapter provides a synthesized overview of the research findings from a comprehensive survey conducted in
the 1 participating countries in the “PV Policy Group” project (01–07/005): Austria, France, Germany, Greece, Italy,
Japan, The Netherlands, Portugal, Slovenia, Spain, Sweden and the United Kingdom. Each country is covered in an
unbiased profile without comparison to other countries. The identical structure of each country chapter reflects the most
important areas covered by the comprehensive questionnaire used in the survey to collect the national country data.
Whereas the first part (“country profile”) is merely descriptive – summarising the key information gathered in the
questionnaire – the second part already represents the first step for the following benchmark and best practice analysis:
key conclusions from the analysis of the national policy framework, in terms of overall performance, lessons learned,
strengths and weaknesses.




                                        B. Country Analysis – assessment of 1 national PV policy frameworks        17
1. Austria                                                        procedures for small-scale plants; administrative
                                                                  procedures for the authorisation of PV plants vary
1.1 Country profile                                               slightly depending of the utilisation of generated energy
                                                                  (auto-consumption or feed-in) and the support scheme
PV market                                                         used (feed-in-tariff or grant);
                                                                • Number of permissions required: promoters have
Natural conditions                                                to obtain at least 5 permissions (plant authorisation,
• Solar radiation: 1.100 ± 150 kWh/m² p. a. on average;           grid connection, registration as “eco-energy plant”,
• Specific energy yield of PV plants: ranges from 700 to          feed-in contract, commissioning); plants > 0 m²
  940 kWh/kWp on average.                                         additionally require a specific building permission by
                                                                  provincial government; in certain areas further special
Market background and history                                     permissions are required (historic monuments etc.);
• Historic development: the national PV market started          • Number of authorities involved: at least 3 (provincial
  with small stand-alone systems; since 1997 increasingly         government, local grid operator / utility, and one of the
  dominated by grid-connected systems; strong market              three local “green power balance group representatives
  dynamics until 003, then sudden slowdown in                    (GPBGR)”;
  004/005 due to change of regulatory framework;              • Duration of planning process: the average lead time
• Current trends: key market barrier at the moment is             for permission procedures is 4–10 months – it may
  the Green Electricity Act from 003 that introduced             differ considerably from project to project (plant size,
  a guaranteed feed-in-tariff, but also a cap of 15 MWp           environment, etc.) and from province to province.
  as artificial barrier for growth; an amendment of this
  legislation is currently under discussion;                    PV industry
• PV image/acceptance: Austria is a pioneer country
  in solar energy and solar thermal market leader, so           PV industry structure and development
  acceptance of PV is generally very high; strong hidden        • Silicon/wafer production: no national facilities in 004;
  demand.                                                       • Cell production: no national facilities in 004;
                                                                • Module production: five manufacturers with total output
Market size and growth                                            of 3,6 MWp in 004; production capacities > 9 MWp in
• Annual installed capacity: + ,31 MWp in 004 (+                004;
  6,47 MWp in 003) – sharp decrease by over 300 %!);           • Other PV component production: some leading manu-
  No. 6 in Europe                                                 facturers of PV components (inverters, encapsulation
• Total installed capacity: + 19, MWp in 004 (16,9 MWp          materials for solar cells, batteries) are based in Austria;
  in 003); No. 7 in Europe                                       due to strong export orientation they are widely inde-
• Annual growth rate: + 14 % in 004 (+ 63 % in 003)             pendent from current decline in their home market.
  – slump in comparison to 00 + 003 due to cap of
  15 MW defined in Green Electricity Act;                       Key industry data
• Installation density: ,4 kWp/1.000 habitants in 004;        • National cell production capacity (output): 0 MWp in
  No. 4 in Europe                                                 004 (0 MWp in 003);
• Growth perspectives: forecasts range from only                • National module production capacity: > 9 MWp in 004
  1, MWp p.a. (Worst Case) to 14,8 MWp p.a. (Best                (4 MWp in 003, + 15 %);
  Case) – the actual development heavily depends on             • Annual sales of the national PV industry: € 145 Mio. in
  the amendment of the Green Electricity Act.                     004 (€ 105 Mio. in 003, + 9 %);
                                                                • Employment in PV industry: approx. 340 persons in
Market structure                                                  004 (00 in 003, + 70 %)
• Market segmentation: 86 % grid-connected, 14 % off-           • Average PV module prices: 3,6 €/Wp in 004
  grid in 004; market share of grid-connected systems          • Average PV system prices: 5,0–8,5 €/Wp in 004
  would increase further if artificial cap was not in place;
• Project size: clear dominance of small roof-top systems       PV policy strategy and regulatory framework
  on private houses; no experiences with larger-scale PV        (overview)
  projects (> 100 kWp) so far;
• Regional distribution: the national PV market is              National strategy and framework for PV promotion
  fairly concentrated on the Vorarlberg region next to          • National PV targets: no official PV target until 010; the
  Germany (> 55 % market share in 004). The Region               current Green Electricity Act limits the maximum total
  of Vorarlberg was a pioneer in PV, which created an             capacity to 15 MWp nationwide – so actually blocks
  own campaign to foster PV development, and also had             further market growth instead of promoting it;
  very high provincial feed-in tariffs.                         • National PV strategy/plan: there is no specific PV
                                                                  strategy at the moment; promotion of PV is part of
Administrative processes                                          overall RES and RES-E policy; currently discussion on
• Complexity of planning process: administrative                  amendment of regulatory framework;
  procedures for PV installations are fairly clearly defined;   • National PV administration: national energy (and
  processes are widely decentralised, in charge are               PV) policy is co-ordinated by the Federal Ministry
  mainly provincial authorities, so in practice conditions        of Economics; on the operational level provincial
  may differ between the 9 provinces; there are simplified        governments are in charge of permission procedures


 18    PV Policy Group – European Best Practice Report
   and regional subsidy schemes; the national regulating          • Average payback period for PV investments (under
   authority of the electricity sector (E-Control) is in charge     given conditions): currently no tariffs in place for new
   of monitoring.                                                   plants.

National PV incentive systems:                                    Electricity sector regulations relevant for the PV market
• Feed-in-tariff system: yes, key legislative instrument is       • Electricity plant authorisation: defined in Electricity
  the Green Electricity Act;                                         Act from 000 in line with EU directives; in charge of
• Investment support schemes: yes, additional direct                 procedures are provincial governments/administration;
  subsidies (partly soft loans) are granted both on               • Grid access code: based on the national Electricity Act
  the national level (“Austrian Environment Support”                 and in line with EU directives; in charge of procedures
  programme) by the Federal Ministry for Agriculture &               are local grid operators/utilities according to transparent
  Environment, and on the regional level by provincial               “technical and organisational rules (TOR)”; they also
  governments;                                                       issue “guarantee of origin (GO)” certificates; feed-in-
• Fiscal incentives: yes, “investment growth bonuses”                contract is closed with other institution “GPBGR” that
  are granted by means of a 10 % tax credit on PV                    pays the tariffs;
  investments (003 and 004 only);                               • Sector regulation: legal rights and non-discrimination
• Tendering systems: none;                                           of PV operators ensured by independent regulator E-
• Quota obligation systems: none;                                    Control;
• Green pricing schemes: Some “green” offers by                   • National plant register: in place, national register of “eco-
  electricity suppliers. Austria has been the first country          electricity plants” managed by E-Control; obligatory
  in Europe to introduce a mandatory disclosure scheme               registration by PV operators; the number and capacity
  for electricity suppliers that have to display the portfolio       of registered plants are regularly published on the E-
  mix on the electricity bill; RES producers are granted             Control website (www.e-control.at).
  “guarantees of origin (GO)” certificates by the grid
  operator; RES plants are centrally registered by the            Building sector regulations relevant for the PV market
  regulating authority (E-Control);                               • Building standards: various building standards have
                                                                    to be respected by PV promoters; regulations on
                                                                    protection of historical monuments and townscape are


                                           B. Country Analysis – assessment of 1 national PV policy frameworks             19
  particularly restrictive; there are different building codes     values for 003: RES-E (except hydro): 0,6 TWh,
  in all 9 provinces; normally no building permission              53 Mio. Euro feed-in tariffs, support fee: 0,1 cent/kWh;
  required for PV plants < 0 m²;                                  PV: 11 GWh, 6,5 Mio. Euro feed-in tariffs.
• Solar building obligations: none;
• Regulations for building-integrated PV: no specific            PV support schemes: 3 different systems
  promotion instruments for BIPV plants currently in
  place; a purchase obligation is defined in the Green           General characteristics of support schemes
  Electricity Act, but no feed-in-tariff is guaranteed for       • Three different systems in parallel: 1. provincial
  plants exceeding the 15 MW cap.                                  support schemes under Green Electricity Act (not
                                                                   in all provinces!); . specific provincial housing (or
PV industry regulations relevant for the PV market                 environmental) subsidy schemes; 3. national support
• Quality standards for PV products: international /               scheme by the Federal Ministry for Agriculture &
  European quality standards (IEC) for PV products and             Environment (“Austrian Environment Support”); theses
  installations are applied in Austria as elsewhere in             schemes historically were the key instrument for PV
  Europe;                                                          promotion; for grid-connected systems now widely
• Quality standards for PV installations: national standard        replaced by the national feed-in-tariff, but still pre-
  for grid-connected PV installations (“ÖVE/ÖNORM E                dominant instrument for stand-alone systems;
  750”) in Austria that corresponds to the EU norm EN           • Administration: the provincial schemes are managed
  6177;                                                           by the respective administrations; the national
• Quality standards for PV installers: PV installations            programme is managed by agency “Kommunalkredit
  have to be carried out by a licensed electrician.                Public Consulting (KPC)” on behalf of the ministry;
                                                                 • Type of system: direct subsidies (grants), in some
Key PV legislation: Green Electricity Act                          provinces also soft loans;
                                                                 • Start / expiry date: generally no expiry date;
General characteristics of legislation                           • Budget: 1. support scheme under the Green Electricity
• Type of system: feed-in-tariff system, offering additional       Act: for all RES-E except hydro: 003: 5 Mio. Euro;
  options for support by provinces; transposes EU                  004: 15 Mio. Euro; from 005: 7 Mio. Euro
  directive 001/77/EC and harmonised the previous               • Funding: 1. provincial support schemes funded by final
  system of diverse regional feed-in-tariff systems to a           consumers paying “support fees” on their electricity bill;
  nationwide system;                                               . other provincial schemes from provincial budgets; 3.
• Start/expiry date: in place since 01.01.003, no expiry          national scheme from federal budget of the Ministry.
  date;
• Targets of the legislation: targets comprise all RES-          Contents and conditions of the support schemes
  E excluding hydro (at least 4 % of the electricity final       • Beneficiaries: 1. Grid-connected PV installations; .
  demand in the public grid – until 008), but no specific         mainly BIPV installations; 3. off-grid installations;
  (sub-)targets for PV defined; in addition, current version     • Type of support: varies from province to province,
  defines a cap of 15 MWp for total PV installations               mainly investment subsidies (partly soft loans); national
  entitled to receive guaranteed feed-in-tariff;                   support cannot be cumulated with feed-in-tariff so
• Long-term legal security: fairly high; the law may be            mainly used for off-grid-installations;
  amended by means of ordinance of the Federal Ministry          • Level of support: varies from province to province – up
  of the Economy; by ordinance the feed-in-tariffs are             to 40 % of total investment (Vienna); maximum amount
  fixed for a limited period of time ( years); the law may        up to € 7.000 (Styria) or € 3.700/kWp (Upper Austria).
  be abolished by /3 majority of the parliament.
                                                                 PV monitoring systems
Contents and conditions of the legislation
• Feed-in-tariffs: 60 €ct/kWh (plants < 0 kWp) – 47 €ct/        National approach to PV market monitoring
  kWh (> 0 kWp);                                                • General approach/instruments: annual monitoring
• Decrease mechanism: none                                         report commissioned by the Federal Ministry of
• Guarantee period: 13 years;                                      Transport, Innovation & Technology;
• Cap: 15 MWp – below current capacity installed, so             • Institutions in charge: Gerhard Faninger/iff Klagenfurt
  market practically stalled by mid 005!                          in co-operation with the Austrian PV association.
• Financing model: centralised compensation scheme –             • Data collection & processing: 1. grid-connected
  surplus cost for feed-in-tariffs are charged by GPBGR            installations covered by national plant register (GPBGR
  to electricity suppliers who again charge them as                via E-Control) – but only those plants receiving the
  “support fee” to the final consumer in the framework of          feed in tariff; . market surveys of Austrian PV industry
  green electricity schemes;                                       association et al.;
• Economic cost: In 004, 1,4 TWh of RES-E (except               • Data dissemination: annual publication of report, which
  hydro) was fed into the grid and received a total of             may also be downloaded on website of Ministry.
  18 Mio. Euro on feed-in tariffs and was financed by
  the customers with a support fee of 0,183 Cent/kWh             National approach to performance measurement of PV
  at average on the electricity bill. For PV, 7,5 Mio. Euro      policy framework
  feed-in tariffs were paid for 1 GWh. The respective           • General approach: regulator E-Control in charge of
                                                                    monitoring the effects of the Green Electricity Act – has


 0    PV Policy Group – European Best Practice Report
  to deliver an annual monitoring report to the Federal             (e.g. peak power vs. rated output of converter); the
  Ministry of the Economy; no structured approach to                same applies to monitoring targets/performance indi-
  monitoring especially for PV, just for the promotion              cators;
  instruments in general.                                         • Insufficient monitoring of off-grid market;
• Institutions in charge: E-Control (supported by
  GPBGR);                                                         Lessons learned
• Data collection & processing: 1. national plant register        • PV needs a differentiated feed-in-tariff, depending of
  fed with data by GPBGR (number & capacity of plants,              type of installation (roof-top, open ground, BIPV) and
  total fed-in-electricity, paid feed-in-tariffs etc.); . data     size;
  from provincial authorities in charge of registering eco-       • Long-term security of feed-in-tariffs is key to win trust
  energy plants; 3. own investigations by E-Control;                of investors; in return decrease mechanism to reflect
• Data dissemination: 1. annual publication of report; .           cost-reduction over time until reaching maturity and
  ongoing publication of data via website of E-Control.             competitiveness with conventional technologies should
                                                                    have been installed;
                                                                  • Need for a transparent and efficient political process
                                                                    for (re-)definition of feed-in-tariffs;
1.2 Conclusions from country analysis                             • Budgets for support schemes should be clearly limited
                                                                    according to targets, but secured, so that longish
General assessment of performance                                   consultation processes every year are avoided.
• Market development: effectiveness was very high as              • The cap for the Feed-in Law lead to a fast growth in the
  “market explosion” in 00/003 shows; in spite of                beginning and to a collapse of the market after the cap
  breakdown since 003 market development still ahead               was reached.
  of schedule defined in Green Electricity Act (15 MWp
  cap);
• Industry development: Some branches in Austria
  (inverters, laminates) are world market players. Almost
  no home market, considerably exports;
• Cost reduction: Due to the shortages of the module
  sectors, only slight cost reductions could be achieved.
  Prices of PV installations show a wide variety between
  different providers/installers.
• PV acceptance: PV has a positive image in the public.
  From the point of view of political decision makers PV
  is the most expensive option to reach RES-E targets.
  In Austria, biomass and biogas are considered as most
  promising technologies for technology and market
  development.

Strengths of national PV policy framework
• Secured conditions for investors within the cap;
• Stringent authorisation procedures;
• Transparency of fed-in energy and cost (“support fee”
   on electricity bill);
• “Dual approach” to promotion of grid-connected PV
   (either feed-in-tariff on the national level or investment
   support on the provincial level) makes sense. Extra
   investment subsidy scheme for off-grid market;
• Very consistent and transparent data basis in market
   covered by feed-in-tariff system due to centralised
   registration and monitoring (policy monitoring); however,
   this data basis does not cover plants receiving grants
   instead of the feed-in-tariff.

Weaknesses national PV policy framework
• No continuity due to a cap (15 MWp) in feed-in-tariff
  system currently blocking market development;
• Short-term nature of the system; “stop & go” effect;
• Complex definition process of feed-in-tariffs with many
  involved parties;
• Funding of green electricity support payments not on a
  secure basis due to broad consultation process;
• Insufficient PV market monitoring; data bases used by
  different institutions are not complete and consistent


                                           B. Country Analysis – assessment of 1 national PV policy frameworks         1
2. France                                                        the grid-connected market in continental France is
                                                                 very fragmented, with one exception: the Rhone-Alpes
2.1 Country profile                                              region has taken a strong leadership position in recent
                                                                 years by means of advanced solar policy.
PV market
                                                              Administrative processes:
Natural conditions                                            • Complexity of planning process: planning procedures
• Solar radiation: 1.50 ± 50 kWh/m p.a. on average:          for smaller-scale PV installations are fairly clearly
• Specific energy yield of PV plants: ranges from               defined; processes are partly decentralised, in charge
  900 kWh/kWp in Northern France, over 1.00 kWh/               are provincial authorities; in – so in practice there may
  kWp in Southern France up to 1 500 kWh/kWp in the             be regional differences in the handling of procedures;
  overseas departments, on average.                             in the past processes were first of all driven by the
                                                                application for subsidies – the approval was pre-
Market background and history                                   requisite for any further planning & implementation
• Historic development: the national PV market started          steps;
  with small stand-alone systems for the electrification      • Number of permissions required: at least 4 permissions
  of rural areas in the early 80ies; this segment has           are needed for any project (plant authorisation =
  sustained an important role until today especially in the     “certificate of authorisation to operate”, grid connection,
  overseas departments and is supported by the state            “certificate of eligibility to purchase obligation”, power
  as well as EDF; the grid-connected market started in          purchase contract); a simple registration is required
  the early 90ies mainly with research or demonstration         for existing buildings while building permission plus
  projects, then took off between 00–004 following the       environmental impact analysis are required for larger-
  introduction of a feed-in-tariff system plus investment       scale plants (> 4,5 MWp);
  subsidy schemes on both federal and regional level;         • Number of authorities involved: at least 4 (ministry
• Current trends: the recent switch from the mainly             department DIDEME for plant authorisation), regional
  subsidy-driven system to a stronger focus on tax credits      ministry department (DRIRE) for purchase obligation
  in 005 is expected to stop the positive dynamics of the      certificate, local grid operator (usually EDF-ARD) for
  market;                                                       grid access contract, the “unique purchaser” of the
• PV image / acceptance: quite high among general               area (usually EDF-AOA) for feed-in-contract)
  public, in spite of being clearly of second priority to     • Duration of planning process: the overall lead time for
  other RES like wind, biomass, but also solar thermal in       permission procedures is 4–1 months for a small-scale
  official public campaigns.                                    installation (< 5 kWp); for larger projects procedures are
                                                                less standardised and clearly more time-consuming
Market size and growth                                          (1–4 months).
• Annual installed capacity: + 5,87 MWp in 004 (+
  3,66 MWp in 003) – increase by almost 100 % in             PV industry
  comparison to 003 – mainly in the grid-connected
  segment; No. 3 in Europe                                    PV industry structure and development
• Total installed capacity: 0,11 MWp in 004 (14,5 MWp      • Silicon production: none in 005, but several companies
  in 003); No. 5 in Europe                                     are preparing facilities;
• Annual growth rate: + 60 % in 004 (+ 63, % in 003)      • Wafer/cell production: one company (Photowatt
  – slight slowdown in comparison to 003);                     International) produces wafers, cells and modules (7
• Installation density: 0,3 kWp/1 000 habitants in 004         MWp capacity in 004);
  – No. 8 in Europe                                           • Module production: four module producers, two of them
• Growth perspectives: forecasts range from 8,74 MWp            focusing on crystalline and two on thin film modules;
  (Worst Case) to 58,75 MWp (Best Case) p.a. – this           • Other PV component production: various types of
  corresponds to average growth rates of 10–50 %                PV components (esp. charge controllers, batteries,
  depending mainly on the effect of the new tax credit          mounting systems) are produced by French firms.
  scheme on the grid-connected market.
                                                              Key industry data
Market structure:                                             • National cell production capacity: 30,6 MWp in 004
• Market segmentation: 45 % grid-connected, 55 %                (14,6 in 003, + 137 %);
  off-grid in 004; market segment of grid-connected          • National module production capacity: n.k.
  systems clearly growing stronger, but off-grid segment      • Annual sales of the national PV industry: € 96,6 Mio. in
  very stable;                                                  004 (51 Mio. in 003, + 90 %);
• Project size: clear dominance of small roof-top             • Annual investments of PV industry: € 15 Mio. in 004
  systems on private houses; there are few experiences          (€ 15 Mio. in 003, + 0 %)
  with larger-scale PV projects (100–500 kWp), those          • Employment in PV industry: 570 in 004 (500 in 003,
  generally have demonstration character and with               + 14 %);
  strong public involvement;                                  • Average PV module prices: n.k.
• Regional distribution: a traditionally strong regional      • Average PV system prices: 4–1 €/Wp in 004; 7, €/
  market are the DOM/TOM departments where off-                 Wp in mainland France (10 % less than 003, but still
  grid PV is strongly promoted for rural electrification;       high in comparison to European standards);


     PV Policy Group – European Best Practice Report
PV policy strategy and regulatory framework                       EDF-ARD); the feed-in-contract is closed with another
(overview)                                                        department of utility (usually EDF-AOA);
                                                                • Sector regulation: legal rights and non-discrimination
National strategy and framework for PV promotion                  of PV operators supervised by regulator CRE;
• National PV targets: only an indicative, non-binding          • National plant register: none so far, but all authorisations
  PV target of 1–50 MWp installed capacity until 010             granted by DIDEME are published in the “Official
  defined in “multiannual investment plan”;                       Journal”.
• National PV strategy/plan: due the pre-dominance of
  nuclear power the promotion of RES is not top on the          Building sector regulations relevant for the PV market
  agenda of French energy (and environmental) policy;           • Building standards: new regulation RT 005 (due in
  PV is still widely considered a not competitive niche           005) defines energy efficiency standards for new
  technology subject to R&D rather than industrial or             buildings; it is expected that for the first time PV
  energy policy; a consistent, long-term strategy is              installations are acknowledged to meet these standards;
  lacking so far;                                                 a regulatory barrier for PV is the “town-planning” code: a
• National PV administration: national energy policy              certified architect (ABF) may always refuse the building
  is co-ordinated by a department of the Ministry for             permission for conflicts with aesthetic standards;
  Industry (DIDEME); on the operational level regional          • Solar building obligations: not yet been implemented in
  offices of this Ministry (DRIRE) and the grid-operators         France;
  (mainly EDF) are in charge of permission procedures;          • Regulations for building-integrated PV: no specific
  the new regulatory framework based on tax credits is            regulations for BIPV; current “construction code” is a
  co-ordinated by the Ministry for Finance.                       barrier for BIPV systems mainly with regards to the
                                                                  compulsory traditional 10 years insurance system
National PV incentive systems:                                    (“garantie décennale”) imposing for each type of PV
• Feed-in-tariff system: national PV policy is more than          product a long-lasting and costly certification procedure
  ever a mix of various instruments; key legislative instru-      (ATEC or ATEX) by a single body (CSTB)
  ment is a feed-in-tariff system, the current tariffs for PV
  being defined in the Ministerial Order from 13.03.00        PV industry regulations relevant for the PV market
  rated at 15,5 €ct, with a 5 % p.a. abatement and in-         • Quality standards for PV products: international /
  flation compensation (currently 13,85 €ct);                     European quality standards (IEC) for PV products and
• Investment support schemes: yes, additional support             installations have to be complied with; an expert group
  can be obtained by means of investment subsidies                works on new minimum standards with the “electrical
  granted both on the national level by ADEME and on              certification union (UTE)”;
  the regional level by regional governments; since the         • Quality standards for PV installations: national standard
  introduction of the new tax credit system in 005 the           for grid-connected PV installations that corresponds to
  investment subsidies by ADEME have been drastically             the German standard “DIN VDE 016”, except for ENS
  reduced;                                                        which is not required in France;
• Fiscal incentives: yes, tax credits have been increased       • Quality standards for PV installers: no standards
  by the new Finance Law for 005 from 15 to 40 % of              in terms of service quality and qualification of PV
  investment cost (excluding labour expenses) for private         installers; there are requirements defined in ADEME’s
  persons only, while companies are eligible to a one-            regulations to receive subsidies, but given the switch to
  year accelerated depreciation Tax credit have been              the new tax credit system, this quality control measure
  announced to be increased at 50 % for FY 006.                  loses relevance.
• Tendering system: foreseen in legislation, but not been
  applied for PV installations so far;                          Key PV legislation: Electricity law
• Quota obligation system: none;
• Green pricing schemes are rare in France; some                General characteristics of legislation
  utilities offer “green products” to their customers, but      • Type of system: fixed feed-in-tariff system, offering
  without the same level of transparency as in Austria;           additional options for tendering (not used yet);
• Average payback period for PV investments (under              • Start/expiry date: feed-in-tariffs in place since 03/00,
  given conditions): the average payback time for a               but technical authorisation procedures were not defined
  typical small-scale private PV roof-top can be evaluated        before 004; no expiry date defined;
  between 15 and 30 years, according to the Regional            • Targets of legislation: indicative targets defined in
  grant regime.                                                   “multi-annual investment plan (PPI)” for 003–007:
                                                                  corridor of 1–50 MWp for solar energy; a new target for
Electricity sector regulations relevant for the PV market         010–015 is expected with the new “PPI” due to be
• Electricity plant authorisation: defined in Electricity         published until end of 005;
   Sector Law from 000 in line with EU Directive 96/9         • Long-term legal security: rather low, since feed-in-
   CE in charge of procedures is DIDEME at national               tariffs can be modified or even suspended by simple
   level;                                                         Ministerial Order the new “orientation law on energy”
• Grid access code: based on the national Electricity Act         passed on July 13th, 005 however sets a target for
   from 000 (modified in 004) in line with EU legislation;      010 of “200.000 solar DHW and 50.000 solar roofs”,
   in charge are local grid operators/utilities (usually          the later possibly including PV but without certainty.



                                          B. Country Analysis – assessment of 1 national PV policy frameworks           3
Contents and conditions of the legislation                     • Start/expiry date: subsidies from ADEME started in
• Beneficiaries: all operators of RES installations              1999, tax credits in FY 00 at 15 %, increased to
  < 1 W;                                                        40 % for FY 005 (expected 50 % for FY 006) with
• Feed-in-tariffs: estimated in 005 14,17 €ct/kWh               and expiry date for FY 009;
  (mainland France) – 8,34 €ct/kWh (overseas depart-          • Targets: no specific target defined, only implicitly by
  ments);                                                        annual budgets allocated and granted by ADEME;
• Decrease mechanism: 5 % p.a. abatement associated            • Total budget: € 11,7 Mio in 004 (8,5 for grid-connected
  with inflation compensation.                                   plants) by ADEME; in addition, approx. € 10,7 Mio. in
• Guarantee period: 0 years;                                    004 (7 Mio. for grid-connected plants) by regional
• Financing model: centralised compensation scheme               authorities; no figures available yet for tax credit
  – surplus cost for feed-in-tariffs are charged by            • Funding: 1. ADEME subsidies from federal budgets
  electricity suppliers to final consumers as “contribution      (by three ministries) (re-)defined on an annual basis; .
  to the public service for electricity (CSPE)”; the overall     regional subsidies from regional budgets; 3. tax credits
  surplus amount is calculated and made transparent by           from federal budget.
  the regulator CRE;
• Economic cost: the additional cost of feed-in tariffs for    Contents and conditions of the support schemes
  PV as compared to the price of electricity for end-users     • Beneficiaries: 1. private individuals; . corporations; 3.
  can be evaluated in 004, at 160 k€ for 5 GWh, i.e.            public bodies;
  0,00035 €/kWh, i.e. an increase of 0,0035 % to the           • Type of support: originally ADEME subsidies could
  small consumer retail price (currently 0,11 €/kWh)             be combined with feed-in-tariff, additional regional
                                                                 subsidies and a tax credit of 15 %; this combination
PV support schemes: national programme by                        resulted in payback times of 10–15 years;
ADEME                                                          • Level of support: originally 4.600 €/kWp, so combined
                                                                 with regional subsidies up to 80 % (only for individuals)
General characteristics of support schemes                       of investment cost could be financed; since 005
• Type of system: heterogeneous mix of instruments; until        maximum amount for individuals reduced to 1.000 €/
  004 direct investment subsidies, in addition to the low       kWp while tax credit was increased to 40 %; corporations
  feed-in-tariff, were the key instrument for PV promotion       and public bodies may still receive < .800 €/kWp.
  in France; since 005 for grid-connected systems it has
  been widely replaced by the new tax credit system; but
  still pre-dominant instrument for stand-alone systems;
• Administration: subsidies by ADEME; tax credits by
  fiscal authorities;



 4    PV Policy Group – European Best Practice Report
PV monitoring systems                                           the learning curve of downstream activities so as to
                                                                increase efficiency, such as installation works, building
National approach to PV market monitoring                       and grid integration, administrative procedures;
• General approach: national subsidy scheme is                • PV acceptance: PV is among the most popular
  monitored by ADEME on a yearly basis when a report            renewable energy sources among general public and
  is published; no structured monitoring procedure              most stakeholders such as commercial companies
  for regional data consolidation, but regular surveys          or local Authorities. A strong political commitment
  commissioned by ADEME; a more advanced system                 together with public campaigns should easily remove
  including public online portal in collaboration with EDF      the remaining reluctance among grid operators and
  is planned; first pilot plants will be fully monitored in     some Administrations. Clearly improved, but still behind
  06/005;                                                      European standards.
• Institutions in charge: no centralised public body
  for market monitoring; ADEME is in charge of data           Strengths of national PV policy framework
  collection and evaluation on behalf of the federal          • Even a fairly low feed-in-tariff has aroused growth and
  government;                                                    hopes in France;
• Data collection & processing: quite consistent data         • Tax credit system is less bureaucratic than subsidies;
  basis so far from subsidy applications – covered 90 %       • Fairly representative and efficient monitoring system
  of the grid-connected market, far less representative          so far;
  for the off-grid-market; the switch to the tax credit
  system in 005 will harm validity of this approach; data    Weaknesses national PV policy framework
  processing: by “Enterprise Resource Planning (ERP)”         • Complex administrative procedures both for general
  system of ADEME;                                              authorisation and subsidy applications;
• Data dissemination: annual publication of report,           • Feed-in-tariffs too low/unattractive; tax credit scheme
  disseminated to key actors and the general public.            in contrast offers no long-term security for investors
                                                                beyond 009;
National approach to performance measurement of PV            • Lack of political commitment and stability for PV
policy framework                                                policy;
• General approach: ADEME in charge of policy                 • Support schemes depend on (always limited) public
   performance measurement on behalf of the ministries;         budgets and are therefore insecure (inevitable delays,
   advanced monitoring project still under development,         stop & go effect);
   first tests start in 06/005; no specific approach known   • Negative effect of tax credit system: lower subsidy
   for new tax credit system, so transparency will be far       amount and longer delays until it is claimed after annual
   lower;                                                       income tax declaration; in addition direct competition of
• Institutions in charge: ADEME for subsidies and overall       PV with other RES technologies;
   framework, fiscal authorities for tax credit system;
• Data collection & processing: PV systems will be            Lessons learned
   equipped with monitoring cabinet that transfer             • National support scheme by ADEME has proved
   performance data to SQL database managed by                  effective to kick-off an embryonic market when no
   national energy secretary (CEA GENEC) via GSM;               feed-in-tariff was in place yet;
• Data dissemination: daily, monthly & annual statistics      • Feed-in-tariff approach has proved as both effective
   available on CEA website; quarterly report to ADEME.         and efficient support mechanism;




2.2 Conclusions from country analysis

General assessment of performance
• Market development: although there is no official
  assessment available, recent growth figures are very
  satisfactory, clearly showing a strong and positive
  perception of PV by main stakeholders and the general
  public despite the lack of political commitment at
  national level for market-oriented support schemes;
• Industry development: noticeable efforts from the only
  French significant manufacturer with a considerable
  growth rate of its capacity in 004 (95 % of which for
  export) should be weaken on the short term if not
  supported by a market-oriented policy complementary
  to R&D support;
• Cost reduction: further reduction of average system
  prices by 10 %, but still behind European standards With
  modules and BOS costs mainly driven by the global
  market, this gap clearly reflects the need to accelerate


                                         B. Country Analysis – assessment of 1 national PV policy frameworks       5
3. Germany                                                   Administrative processes:
                                                             • Complexity of planning process: planning procedures
3.1 Country profile                                            for smaller-scale PV installations (5 kWp) are fairly
                                                               straightforward; for larger-scale projects (500 kWp) the
PV market                                                      procedures only differ considerably if the system is
                                                               installed on the ground (rather than on roof-top);
Natural conditions                                           • Number of permissions required: for small projects
• Solar radiation: 1.000 ± 150 kWh/m p.a. on average;         at least 4 permissions are required (grid connection,
• Specific energy yield of PV plants: ranges from 750 to       grid use, feed-in, authorisation as power producer);
  950 kWh/kWp on average.                                      usually no building permission is required; for larger-
                                                               scale projects on the ground a building permission
Market background and history                                  has to be obtained from local administration and an
• Historic development: in the last 5 years Germany has        environmental impact analysis be conducted;
  developed to the leading PV market worldwide; main         • Number of authorities involved: for small projects 
  driver of this development as been the Renewable             main authorities are involved (grid operator/utility, fiscal
  Energy Law (EEG) launched in 000 and amended                authority to obtain status of power producer); local
  since 004 – which guarantees sufficiently attractive        authorities are generally well familiar with PV projects
  and secure feed-in-tariffs for PV investors;                 so that the administrative hassle is limited;
• Current trends: the solar boom is sustained in 005;       • Duration of planning process: lead times for small
  however, against the risk of an overhaul of the EEG          installations are nowadays below  months; for larger
  after the change of the government following the             projects the process may take up to 1 year.
  federal elections in 09/005 German PV companies
  are preparing for the exploration of foreign markets;      PV industry
• PV image/acceptance: the image of PV in Germany is
  excellent for years and hardly affected by increasing      PV industry structure and development
  polemics from political opponents against wind             • In the last years, the German PV industry has
  energy.                                                      experienced strong growth, but also high degrees of
                                                               competition, industrialisation and innovation; many
Market size and growth                                         companies have developed into market leaders also
• Annual installed capacity: + 450 MWp in 004 (+              on an international scale and follow an aggressive
  300 MWp) – increase by 00 % in record year 004; Nr.        expansion path;
  1 in Europe and worldwide;                                 • Silicon and wafer production: with regard to solar
• Total installed capacity: 90 MWp in 004 (470 MWp in        silicon, the German PV industry is still very dependant
  003); Nr. 1 in Europe and worldwide;                        on imports from the semiconductor industry; however,
• Annual growth rate: + 00 % in 004 (+ 87 % in 003)         considerable investments of at least three companies
  - further acceleration after amendment of EEG;               are undertaken to extend or set up own production
• Installation density: 4, kWp/1.000 habitants                capacities until 007; the same development applies to
• Growth perspectives: forecast of the German                  wafer production;
  Solar Industry Association (BSi) predicts about            • Cell production: in Germany mainly crystalline cells
  1.000 MWp (Best Case) p.a. in 010; this high growth         are used (> 90 % market share); total cell production
  rate is mainly concentrated on the grid-connected            capacities were 5 MWp in 004; 30 % of actual
  segment while the off-grid market is expected to             production (187,4 MWp) were exported; the currently
  sustain at approx. 3 MWp p.a.                                six German cell manufacturers are all planning
                                                               considerable investments in the extension of production
Market structure                                               capacities;
• Market segmentation: 91 % grid-connected, 9 % off-         • Module production: more than 0 module manufacturers
  grid; Germany is a pure on-grid market, the share of         have production facilities in Germany (total capacity
  the stable off-grid segment will shrink further in the       00 MWp in 004); their production output (173 MWp in
  future;                                                      004) in recent years has always been below national
• Project sizes: the average project size has been             demand, so the share of imports has never been below
  increasing constantly over the year; until the expiry        50–70 %; all manufacturers have announced a further,
  of the “100.000 solar-roof programme” in 003 small          massive extension of production capacities from 005
  roof-top systems on one-family houses were clearly           on;
  dominating; after the abolition of the former size limit   • PV component production: due to over 10 years of
  an important share of current market is claimed by           experience with grid-connected PV, German producers
  solar parks of the “megawatt” class on open fields;          of PV components are also leaders on an international
• Regional distribution: PV installations in Germany           scale; currently there are 1 inverter manufacturers.
  are very much concentrated on the large Southern
  regions of Bayern and Baden-Württemberg (> 80 % of         Key industry data
  total installations in 003!); this domination is due to   • National cell production capacity: 187,4 MWp in 004
  natural, but also demographic, economic and political        (100 MWp in 003, + 87 %);
  conditions.                                                • National module production capacity: 00 MWp in 004
                                                               (83 MWp in 003, + 140 %)


 6    PV Policy Group – European Best Practice Report
• Annual sales of the national PV industry: € 1 150 Mio.          not even the new subsidy programme (“100.000 roof-
  in 004 (650 Mio. in 003, + 77 %);                             tops” – HTDP) started in 1999 were sufficient to help
• Annual investments of PV industry: € 00 Mio. in 004           the national PV market to take-off – this effect was
  (150 Mio. in 003, + 33 %);                                     not achieved before the EEG started in 000; only
• Employment in PV industry: 4.400 in 004 (3.500 in              the combination between EEG and HTDP secured
  003, + 6 %);                                                  commercially oriented PV investors a full payback of
• Average PV module prices: 3 €/Wp in 004                        their investment and the breakthrough of the market;
• Average PV system prices: 5,3 €/Wp in 004                  •   Feed-in-tariff system: yes, regulated by the Renewable
                                                                  Energy Law (EEG), recently amended in 004: its
PV policy strategy and regulatory framework                       terms for PV investors have been improved further;
(overview)                                                    •   Investment support schemes: yes, on the national
                                                                  level, the HTDP programme managed by the KfW has
National strategy and framework for PV promotion                  been abolished on behalf of the amended EEG; the
• National PV targets: no official PV target until 010 or        same applies to many regional subsidy schemes, but
  00;                                                           in some regions they are still in place;
• National PV strategy / plan: strategy for PV promotion is   •   Fiscal incentives: exist, but are of limited relevance;
  based on a simple formula: fixed, but decreasing feed-      •   Tendering systems: none;
  in-tariff (until 004 to be combined with investment        •   Quota obligations systems: none;
  subsidies as soft loans);                                   •   Green pricing models: yes, various municipal utilities
• National PV administration: the PV policy framework is          offer green offerings as a voluntary option for their
  widely homogeneous nationwide; on the federal level it          customers to support RES by paying a premium on
  is co-ordinated by the Ministry for the Environment; the        their electricity bill.
  HTDP programme is managed by the public promotion
  bank KfW; in addition, some German regions (still)          Electricity sector regulations relevant for the PV market
  run additional support schemes interesting for PV           • Electricity plant authorisation: defined in electricity
  investors.                                                     act and EEG in line with EU directives; promoters
                                                                 obtain status as electricity producer by local fiscal
National PV incentive systems:                                   authorities;
• The history of the now successful “German model” build      • Grid access code: included in the Renewable Energy
  around the Renewable Energy law (EEG) started at the           Law (modified in 004) and in line with EU legislation;
  beginning of the 90ies with a first subsidy programme          grid access and grid use contracts have to be signed
  (“1.000 solar roof-tops”) and preliminary feed-in-law          with local utility;
  (“Stromeinspeisungsgesetz”). These measures, and


                                         B. Country Analysis – assessment of 1 national PV policy frameworks       7
• Sector regulation: new independent regulator in place         • Economic cost: only in 00 17,8 TWh RES electricity
  since 005;                                                     was fed into the grid and received € 1,5 billion
• National plant register: no yet, but will be implemented        remuneration by the operators. For 003 these volumes
  until beginning of 006; obligatory registration of all         were increased to 1 TWh and 1,9 billion respectively.
  EEG operators.                                                  € 5,5 Mio for PV in 004.

Building sector regulations relevant for the PV market          PV support schemes: 100.000 solar roof-top
• Building standards: a building permission is only             programme
  required in special cases (e.g. installations in protected
  areas); new energy efficiency regulations for the             General characteristics of support schemes
  building sector have no direct relevance for the PV           • Type of system: soft-loan scheme for grid-connected
  sector;                                                         PV installations; one part of “two-column” support
• Solar building obligations: various pilot initiatives have      model with EEG
  been implemented by German municipalities, but their          • Start / expiry date: started in 1999 and expired in 003
  direct relevance for the PV sector is yet limited;              (5 years);
• Regulations for building-integrated PV: various               • Administration: managed by public promotion bank
  regulations affect BIPV; it depends on the type of              KfW;
  installation and the respective regional building code if     • Targets of programme: “100.000 solar roofs”; targets
  a specific permission is required.                              defined are clearly industry political rather than energy
                                                                  or even environmental political: market development,
PV industry regulations relevant for the PV market                industry development, cost reduction;
• Quality standards for PV products: international/             • Total budget: € 1.700 Mio. over 5 years (65.70
  European quality standards (IEC) for PV products and            projects), excluding regional funds;
  installations have to be complied with,                       • Funding: federal budget of Ministries for the Economy
• Quality standards for PV installations: have to comply          and Environment;
  with general norms for electro-technical installations;
• Quality standards for PV installers: have to meet             Contents and conditions of the support schemes
  specific professional regulations and technical               • Beneficiaries: 1. private individuals; . corporations
  guidelines; installations and grid connection have to be        (SMEs); 3. associations, foundations – the programme
  undertaken by certified professionals.                          is mainly responsible on the current market structure in
                                                                  Germany (focus on small roof-top systems on private
Key PV legislation: Renewable Energy Law (EEG)                    family houses);
                                                                • Type of support: soft loan (interest rate up to 4,5 %
General characteristics of legislation                            below market rates, e.g. 1,91 % in 003);
• Type of system: fixed feed-in-tariff system;                  • Level of support: maximum budget 6.30 €/kWp for
• Start/expiry date: EEG in place since 01.04.000;               installations < 5 kWp; max. 3.115 €/kWp for each kWp
  current version since 01.08.004; no expiry date; the           for installations > 5 kWp.
  current EEG is a further development of the old feed-
  in law from 1991 whose terms were yet insufficient to         PV monitoring systems
  leverage the PV sector; in retrospective the approval
  of the new law in 000 has to be credited to “lucky           National approach to PV market monitoring
  conditions” under the majority of the red-green-majority      • General approach: three key sources of PV market
  in the parliament at the time;                                  monitoring in Germany: 1. company surveys conducted
• Targets of legislation: no quantitative targets defined in      by industry associations et al.; . evaluation of support
  the law;                                                        schemes by KfW; 3. registration figures by grid
• Long-terms legal security: fairly high; however,                operators; since the expiry of the HTDP programme in
  considerable modifications are possible after the               004 a consistent approach to PV market monitoring
  expected change of government in the federal elections          is clearly missing; the market actors are aware of the
  in 09/005.                                                     urgent need to improve the statistical basis; a key
                                                                  instrument will be the new national plant register from
Contents and conditions of the legislation                        006 on;
• Beneficiaries: any PV producers;                              • Institutions in charge: until 003 KfW, in the future
• Feed-in-tariffs: 54,53 €ct/kWh (< 30 kWp) – 51,87 €ct/          Federal Environmental Agency (UBA) managing the
  kWh (30–100 kWp) – 51,30 (> 100 kWp) for roof-top               plant register;
  installations; bonus of + 5 €ct/kWh for BIPV; 43,4 €ct/      • Data collection & processing: 1. market surveys incl.
  kWh for ground-based installations;                             online data base (“BSi production statistics” soon to
• Decrease mechanism: 5 % p.a.;                                   be extended to wholesalers & installers); . evaluation
• Guarantee period: 0 years;                                     of HTDP applications; 3. obligatory online plant
• Cap: none;                                                      registration for operators > 500 kWp;
• Financing model: centralised compensation scheme -            • Data dissemination: 1. annual reports by BSi et al.; .
  surplus cost for feed-in-tariffs are charged to electricity     annual & final assessment report by KfW; 3. public plant
  suppliers an by them to final consumers;                        register; in addition, working group “RES statistics”
                                                                  since 005 discussing further improvements.


 8    PV Policy Group – European Best Practice Report
National approach to performance measurement of PV              for interest rate reductions were distributed between
policy framework                                                federal budgets over the entire lifetime of soft loans, so
• General approach: Federal Ministry for the Environment        over 10 years;
   in charge of monitoring the effects of the EEG to the      • HTDP: The possibility to finance up to 100 % of
   parliament as a basis for potential amendments;              initial cost enabled many investors to face such a
• Data collection & processing: Ministry commissions            considerable investment – very important especially in
   comprehensive studies to scientific institutes and se-       an early stage of market development, eventually risk
   lected experts; KfW conducted programme assess-              reduction for investors by 50 % liability exemption (risk
   ment on its own;                                             taken over by the state).
• Data dissemination: 1. EEG monitoring report; . HTDP
   assessment report – both publicly available.               Weaknesses national PV policy framework
                                                              • HTDP: limited duration/timeframe;
                                                              • HTDP: limit (“cap”) building an artificial barrier of market
                                                                growth.
3.2 Conclusions from country analysis                         • HTDP: like all subsidy programmes the HTDP financed
                                                                by federal budgets was exposed to “stop & go” effects;
General assessment of performance                               this fact reduces planning security for investors
• Market development: very positive market development,         considerably.
  mainly leveraged by the EEG; Germany is the leading         • Market monitoring is still insufficient, especially since
  PV market worldwide;                                          HTDP programme has expired; especially off-grid
• Industry development: very positive industry                  sector, as well as import/export relations are not
  development; the Germany PV industry is a worldwide           considered in a sufficient way.
  leader;
• Cost reduction: Germany is the most competitive market      Lessons learned
  in Europe, where pressures for cost reduction and           • Essential success factor for a feed-in-tariff system is
  innovation are very high; specific cost per performance       the exact, country-specific calculation of the threshold
  unit (€/Wp) have strongly decreased especially for            for the profitable operation of PV plants (break-even
  larger-scale systems.                                         point) + 5–6 % risk surplus. Market demand does not
• PV acceptance: really a success story, excellent              respond proportionally to the amount of the feed-in-
  perception by the general public, but also by                 tariff (like politicians tend to think), but very sensitively
  professionals and politicians of all parties; various         to the smallest investment barriers.
  representative surveys reveal that solar energy is seen     • Subsidy programmes can be a very effective short-
  as one of the most positive topics whatsoever by the          term measure to stimulate the market (“PR-effective”);
  Germans.                                                      however, a sustainable promotion strategy for PV
                                                                should not depend on the usual budget constraints
Strengths of national PV policy framework                       of subsidy schemes; without the parallel introduction
• EEG enables profitable operation of PV plants                 of the EEG the German HTDP programme would
• EEG: long-term security of investments, legally               definitely not have been successful;
   guaranteed                                                 • Survey results have to be “handled with caution”, since
• EEG: Feed-in-tariff avoids administration problems            PV companies tend to be dishonest with figures, in
   (easier to handle than subsidy programmes);                  different ways and for different reasons.
• EEG: No artificial limitation (“cap”) of market growth of   • Requirements for a valid market monitoring system
   the new EEG;                                                 are extremely high, therefore considerable budgets to
• EEG: No “stop & go” policy due to budget constraints          set up and run a system are compulsory. At the same
   and administrative processes;                                time, rather than only improving national approaches
• HTDP: Specific “charme” of the HTDP programme                 there is a need for a consistent monitoring system on a
   was that not major budgets within the medium-term            European scale.
   financial planning had to be provided for; the cost


                                         B. Country Analysis – assessment of 1 national PV policy frameworks           9
4. Greece                                                         remote areas (e.g. tourist resorts); these procedures
                                                                  are fairly simple and driven by the application for
4.1 Country profile                                               state-subsidies; there are no experiences with larger-
                                                                  scale, grid-connected systems in Greece so far; there
PV market                                                         is a regulatory framework for all grid-connected RES
                                                                  applications, which in practice is hardly appropriate for
Natural conditions                                                smaller-scale PV installations;
• Solar radiation: 1.500 ± 00 kWh/m p.a.                      • Number of permissions required: even after a recent
• Specific energy yield of PV plants: ranges from                 reform at least 17 permissions are required (e.g.
  1.300 kWh/kWp in the North to 1.500 kWh/kWp in the              installation license, building licence, civil works licence,
  South on average.                                               grid connection, operation licence, feed-in contract –
                                                                  see questionnaire for full listing);
Market background and history                                   • Number of authorities involved: in the past more than
• Historic development: the Greek PV market traditionally         40 (!) authorities had to be contacted for permissions,
  is dominated by small off-grid installations for the            since the recent reform all permissions can all be
  electrification of rural areas and island communities that      obtained via one co-ordinating authority;
  were promoted since the 80ies; in recent years stand-         • Duration of planning process: for small-scale lead
  alone applications for the power supply of antennas of          times are around 6–1 months on average; for larger-
  mobile telephony or lighthouses play an important role          scale projects duration would be infinite, so projects
  as well; in contrast, the grid-connected market is still in     are hardly feasible under given circumstances.
  an embryonic stage; only few demonstration projects
  with strong public funding have been realised;                PV industry
• Current trends: a fresh start for the grid-connected PV
  market is expected after the release of the new feed-in-      PV industry structure and development
  law later in 005;                                            • Silicon and wafer production: none;
• PV image/awareness: Greece is a pioneer country               • Cell production: none;
  in the use of solar thermal energy, so the level of           • Module production: none so far, but in an early stage
  awareness is far higher than current market levels              of development; at least two Greek companies are
  reflect.                                                        setting up production facilities, one of them already in
                                                                  operation since 005;
Market size and growth                                          • PV component production: some small-scale producers
• Annual installed capacity: + 1,03 MWp in 004 (+                of PV components (BoS, batteries).
  0,36 MWp in 003) – strong increase, but only in the
  off-grid segment, while the on-grid segment decreased         Key industry data
  from already low levels in 00 + 003);                      • National cell production capacity: 0 MWp in 004 (+
• Total installed capacity: 3,38 MWp in 004 (,35 MWp in         0 %);
  003);                                                        • National module production capacity: 0 MWp (+ 0 %) in
• Annual growth rate: + 186 % in 004 (- 10 % in 003)            004, but 1 MWp in 005;
  – only boost of off-grid segment;                             • Annual sales of the national PV industry were € 3,3
• Installation density: 0,34 kWp/1.000 habitants in 004;         Mio. in 004 (€ 3 Mio. in 003, + 10 %);
• Growth perspectives: forecasts range from only                • Annual investments of PV industry: € 1,5 Mio. in 004
  0,43 MWp (Worst Case) to 114,83 MWp (Best Case)                 (0,5 Mio. in 003, + 00 %);
  p.a. – this huge gap is due to the uncertain impact of        • Employment in PV industry: 70 in 004 (60 in 003, +
  the new feed-in-law on the embryonic on-grid-market             17 %).
  (esp. roof-tops of private households), while the off-        • Average PV module prices: 3,0–3,7 €/Wp
  grid market will be sustained, but limited in volumes.        • Average PV system prices: 6–10 €/Wp

Market structure                                                PV policy strategy and regulatory framework
• Market segmentation: 39 % grid-connected, 61 % off-           (overview)
  grid;
• Project sizes: Projects in Greece are generally small to      National strategy and framework for PV promotion
  medium size, typically ranging between 3 kWp and 100          • National PV targets: no official PV target until 010 or
  kWp; no experiences with larger than 00 kWp, grid-             beyond;
  connected installations so far;                               • National PV strategy/plan: so far there is no consistent
• Regional distribution: no official figures; however, the        strategy or regulatory framework for the PV sector in
  dominating stand-alone installations are concentrated           Greece; however, a new RES legislation based on a
  on the Greek islands and rural regions.                         fixed feed-in-tariff is being prepared – its release is
                                                                  expected until end of 005;
Administrative procedures                                       • National PV administration: key actor within the current
• Complexity of planning process: extremely complex               regulatory framework is the regulating authority RAE
  and time-consuming; typical case studies in Greece              that collaborates with the Ministry of Development
  so far refer to the installation of small-scale stand-          in the adaptation of current regulations; in addition,
  alone systems for the electrification of buildings in


 30    PV Policy Group – European Best Practice Report
   the electricity grid operator PPC plays a key role in          producers (SP)” or “independent power producers
   permission procedures;                                         (IPP)” not fixed, but linked to overall electricity price
                                                                  levels; a fundamental reform and new feed-in-tariff
National PV incentive systems:                                    system under preparation until 005;
• Feed-in-tariff system: the current regulatory framework       • Starting/expiry date: the current system is in place
  for the electricity framework includes a uniform tariff         since 1994 (with later amendments), no expiry date;
  system for all RES producers alike, linked to overall         • Targets of legislation: no specific targets for RES
  electricity price levels and without specific terms for         defined;
  PV; this system will be reformed by introduction of the
  new feed-in-law due to be published until end of 005;        Contents and conditions of the legislation
• Investment support schemes: no specific support               • Beneficiaries: all operators of RES installations
  schemes for PV so far; however, PV investors may                < 50 MWp;
  receive subsidies from general programmes such as             • Feed-in-tariff: 70 % (for SP) – 90 % (for IPP) of current
  OPC (Operational Programme for Competitiveness)                 electricity retail price; this leads to maximum price
  – that are partly co-financed by EU programmes;                 levels of 6,36 €ct/kWh (for SP) and 8,17 €ct/kWh
• Fiscal incentives: do not exist since 003 anymore;             (for IPP); new legislation shall introduce differentiated
• Tendering systems: none;                                        tariffs according to system size and location (continent
• Quota obligation systems: none;                                 vs. island)
• Green pricing system: none.                                   • Decrease mechanism: none
                                                                • Guarantee period: 10 years;
Electricity sector regulations relevant for the PV market       • Financing model: centralised compensation scheme
• Electricity plant authorisation: current electricity            managed by the Transmission System Operator (TSO)
   sector framework is result from the transposition of           ensures that tariffs are paid to producers and end-
   the respective EU directives in Greek law; the basic           consumers are charged a “RES fee” of € 60c per MWh
   legislation is from 1999; administrative procedures            (annual amount gathered is about € 0M);
   until commissioning of a grid-connected system               • Economic cost: n.k.
   are extremely bureaucratic and time-consuming;
   at the moment promoters have to obtain at least 17           PV support schemes: OPC programme
   permissions (from various authorities on national,
   regional or local level), in addition to the “energy         General characteristics of support schemes
   production licence” granted by RAE; PV systems < 0          • Type of system: direct investment subsidies (grants);
   kWp are excluded from the licensing procedure, but             competitive procedure, proposals are evaluated by a
   requirements by grid-operator PPC are still high;              centralised committee.
• Grid access code: electricity act from 1994 ensures           • Administration: co-ordinated by Federal Ministry of
   rights for independent power producers; grid access is         Development by means of regular calls-for-proposals;
   granted by utility PPC; procedures are supposed to be          various institutions (incl. RAE, CRES) are involved in
   in line with EU directives;                                    its management;
• Sector regulation: ensured by regulator RAE;                  • Start/expiry date: 000–006 (7 years);
• National plant register: none so far.                         • Targets: programme focus is rather broad, not only
                                                                  RES projects are promoted; no specific targets are
Building sector regulations relevant for the PV market            defined;
• Building standards: requirements for PV installations         • Total budget: € 58,7 Mio for RES projects in OEP I
  from overall building regulations are fairly low; PV            (001/00) and € 67,5 Mio. in OEP II (003/004);
  systems < 500 kWp are classified as “low annoyance”,          • Funding: EU, national and private funds.
  so there their installation is ruled out only in few areas;
• Solar building obligations: none;                             Contents and conditions of the support schemes
• Regulations for building integrated PV: none.                 • Beneficiaries: energy investors, mainly companies and
                                                                  municipalities;
PV industry regulations relevant for the PV market              • Type of support: direct investment subsidies (grants);
• Quality standards for PV products: international/             • Level of support: subsidy covering up to 70 % of
  European quality standards (IEC) for PV products have           investment cost (for PV projects);
  to be complied with;
• Quality standards for PV installations: nothing specific      PV monitoring systems
  other than overall technical regulations for electricity
  production facilities;                                        National approach to PV market monitoring
• Quality standards for PV installers: nothing specific.        • General approach: no systematic approach to market
                                                                  monitoring so far;
Key PV legislation: Electricity sector regulation               • Institutions in charge: there are various institutions
                                                                  collecting and holding data on PV projects (ministries,
General characteristics of legislation                            regulator RAE, energy agency CRES, industry
• Type of system: general electricity sector regulations          associations HELAPCO etc.);
  ensuring grid access of any kind of independent
  producers; specific feed-in-tariffs for RES “self-


                                          B. Country Analysis – assessment of 1 national PV policy frameworks        31
• Data collection & processing: the evaluation of existing        Outlook
  data is not undertaken in a consistent way, so market           • New law for RES under development is expected to
  data tend to be hardly valid;                                     be approved by the Parliament this year. Will open the
• Data dissemination: market data are not published in a            market for grid-connected PV applications.
  systematic way.

National approach to performance measurement of PV
policy framework
• General approach: no systematic approach to PV
   policy monitoring;
• Institutions in charge: programme management bodies
   (e.g. CRES);
• Data collection & processing: a systematic evaluation
   is undertaken of the OPC support programme; at the
   end of each period (every 6 years) an assessment
   of projects takes place; apart from general data,
   each subsidised project is evaluated by one of the
   programme managers;
• Data dissemination: there are no dedicated assessment
   reports on the policy framework.




4.2 Conclusions from country analysis

General assessment of performance
• Market development: satisfactory off-grid development,
  but little activities in the on-grid segment
• Industry development: fair representation relatively to
  the small national market
• Cost reduction: following trends in EU
• PV acceptance: very high public acceptance

Strengths of national PV policy framework
• High subsidy on the capital cost
• Utility is obliged to connect RE systems to the grid

Weaknesses national PV policy framework
• Lack of long-term political vision and strategy
• Feed-in-tariff: insufficient tariff – PV is treated as other,
  more mature & larger-scale applications
• Feed-in-tariff: guarantee period too low
• Extremely confusing and bureaucratic regulatory
  framework – partly purposeless licensing processes
  even for small-scale applications – authorities in charge
  are unable to handle procedures efficiently
• Requirements by utilities for grid-connection for small-
  scale systems are so complicated that potential
  investors are put off
• No dedicated promotion of roof-top systems in private
  households where hidden demand is highest
• Insufficient market monitoring and programme
  performance measurement

Lessons learned
• Very effective investment support schemes/pilot
  programmes in the solar thermal sector, creating a
  leading market and industry in Europe (can be seen as
  a reference for PV)




 3    PV Policy Group – European Best Practice Report
5. Italy                                                       are very much dominated by the application of subsidies
                                                               granted by means of regional call-for-proposals; before
5.1 Country profile                                            the approval is not given, the actual planning and
                                                               implementation phases cannot be started; there are
PV market                                                      no experiences with larger-scale PV projects in recent
                                                               years, but the wind energy sector gives an indication
Natural conditions                                             of the difficulties to be expected by promoters; with the
• Solar radiation: 1.400 ± 300 kWh/m² p.a.;                    start of the new feed-in-tariff system the transmission
• Specific energy yield of PV plants: ranges from 1.100        grid operator GRTN is in charge of the centralised
  kWh/kWp in the North to 1.500 kWh/kWp in the South           authority process;
  on average.                                                • Number of permissions required: investors have to
                                                               obtain at least 4 permissions (building permission,
Market background and history                                  RES plant registration to participate in feed-in-tariff
• Historic development: after a phase of considerable          system, grid access concession, feed-in contract); a
  investments in demonstration plants in the 80ies and         building permission is obligatory, other requirements
  early 90ies the Italian PV market has been experiencing      depend on local conditions and have to be figured
  a very sluggish development in recent years; main            out by the promoter; for larger projects on the ground
  reasons have been long delays and implementation             a environmental impact analysis (V.I.A.) may be
  problems of political initiatives;                           required;
• Current trends; the current market is clearly dominated    • Number of authorities involved: at least 3 (local
  by small, grid-connected systems < 0 kWp as promoted        administration, local grid operator / utility, national grid
  by the national support scheme “Tetti Fotovoltaici”; the     operator GRTN);
  Italian PV industry is now expecting the implementation    • Duration of planning process: so far the average lead
  of the new feed-in-tariff system launched in 09/005;        time for investors has therefore been at least 18 months
• PV image/acceptance: the level of awareness is still         (subsidy application > 1 year on average); larger projects
  very low.                                                    can take up to –3 years; the new regulations foresees
                                                               a streamlining of administrative processes: max. 3
Market size and growth                                         months for approval by GRTN; grid access approval
• Annual installed capacity: + 6 MWp in 004 (+ 4 MWp in       by utility within further 1 month; commissioning of the
  003) – slight increase in comparison to 00 + 003;        plant within 1 months after approval by GRTN (4
  No. 4 in Europe                                              months for installations > 50 kWp).
• Total installed capacity: 36 MWp in 004 (30 MWp in
  003); No. 4 in Europe                                     PV industry
• Annual growth rate: + 50 % in 004 (+ 0 % in 003);
  constant development in comparison to 003;                PV industry structure and development
• Installation density: 0,6 kWp/1 000 habitants; No. 7 in   • Silicon/wafer production: none;
  Europe                                                     • Cell/module production: companies produce cells and
• Growth perspectives: forecasts in the past ranged from       modules mainly for supplying the world market rather
   MWp (Worst Case) to 30 MWp (Best Case) p.a.; since         than Italy; their output was increased considerably
  release of the new feed-in-tariff system some market         in 004 (8,4 MWp) and production capacities will be
  actors even reckon a growth up to 80 MWp p.a. in             further extended in 005 (13 MWp);
  007/008 – in spite of the new feed-in-tariff market      • PV component production: there are 8 national
  insiders’ growth expectations are more moderate than         producers of PV components like inverters, charge
  those of foreign analysts tend to be.                        controllers or batteries, as well as 15 importers or
                                                               distributors of foreign products.
Market structure
• Market segmentation: 68 % grid-connected, 3 % off-        Key industry data
  grid; the grid-connected market is increasing its share,   • National cell production capacity: 8,4 MWp in 004
  a development promoted by the new feed-in-tariff             (4,3 MWp in 003, + 95 %);
  system;                                                    • National module production capacity 8,4 MWp in 004
• Project sizes: due to the conditions of the “Tetti           (4,3 MWp in 003, + 95 %);
  Fotovoltaici” programme, Italy by now is a “1–0 kWp”      • Annual sales of the national PV industry: n.k.
  market; also under the new system the lion share of        • Annual investments of PV industry: n.k.
  installations will be < 50 kWp                             • Employment in PV industry: 750 in 004 (750 in 003,
• Regional distribution: no official data on regional          + 0 %).
  distribution; however, projects funded under the “Tetti
  Fotovoltaici” programmes were distributed across           PV policy strategy and regulatory framework
  the whole country, with a certain focus in Southern        (overview)
  regions.
                                                             National strategy and framework for PV promotion
Administrative processes:                                    • National PV targets: in 1999 the national White Paper
• Complexity of planning process: very bureaucratic;           set a clear target for PV: 300 MWp until 008–01;
  planning procedures for smaller-scale PV installations       however, this target was reduced two years ago given


                                        B. Country Analysis – assessment of 1 national PV policy frameworks          33
  the sluggish market development, the new Renewables         • Sector regulation: ensured by regulator AEEG;
  act sets a new target of 100 MWp until 01 that could      • National plant register: none so far, but planned.
  be increased in the future;
• National PV strategy/plan: the Italian government has       Building sector regulations relevant for the PV market
  been working on a strategies and policy framework for       • Building standards: initiatives to promote energy
  RES promotion, but has not been very successful in the        efficiency measures in buildings are clearly in the focus
  past; the national support scheme “Tetti Fotovoltaici” –      of Italian energy policy now; PV will indirectly capitalise
  though fairly well budgeted – never achieved its targets      on these measures;
  due to administrative problems in implementation; the       • Solar building obligations: various initiatives being
  introduction of a quota system on the basis of green          launched by some Italian regions and municipalities;
  certificates in 00 was also inappropriate for the PV        they have positive effects for the solar thermal sector
  sector a new system based on fixed feed-in-tariffs            rather than PV;
  decided (new Renewables Act published in 1/003);          • Regulations for building-integrated PV: so far only
  however, again the actual implementation was delayed          proposals by industry associations, not implemented
  due to tough discussions on the exact terms of this           yet.
  new system was launched not before 09/005; one
  reason for these developments is the strong opposition      PV industry regulations relevant for the PV market
  against decentralised RES and PV by the conventional        • Quality standards for PV products: European and
  energy lobby;                                                 national quality standards (IEC) for PV products to be
• Key actor of Italian energy policy is the Federal             complied with;
  Industry Ministry (MAP) that regarding RES shares           • Quality standards for PV installations: not known;
  responsibilities with the Environmental Ministry            • Quality standards for PV installers / professionals: no
  (MATT); for the actual regulations of the electricity         obligatory standards.
  sector regional authorities and grid operators play
  an important role; the future feed-in-tariff system will    Key PV legislation: new renewables law
  introduce a competitive tendering system co-ordinated       (“Conto Energia”)
  by GRTN as centralised authority.
                                                              General characteristics of legislation
National PV incentive systems:                                • Type of system: fixed feed-in-tariff system (for
• Feed-in-tariff system: After long negotiations on in          installations < 50 kWp combined with a net metering
  09/005 the new Renewables Act introducing a fixed            component for plants < 0 kWp), including a competitive
  feed-in-tariff (combined with a net metering component        tendering system for installations > 50 kWp; release
  for plants < 0 kWp, as well as a competitive procedure       in 09/005; the new framework has a long history of
  for plants > 50 kWp) for PV formally entered into force;      battles between different lobbies; the PV industry has
• Investment support schemes: main incentive system             now settled for a compromise solution, hoping for
  for PV investors so far have been subsidy schemes             potential amendments in the future;
  managed by the Environmental Ministry and regional          • Start/expiry date: start in 09/005, no expiry date
  authorities by means of bureaucratic call-for-proposals,      defined;
  the three sub-programmes run under the heading              • Long-term legal security: rather low, since feed-in-
  “Tetti Fotovoltaici” promote small, grid-connected PV         tariffs can be modified or even suspended by simple
  installations < 0 kWp; with the release of the new feed-     Ministerial Decree.
  in-tariff system these schemes will widely run out in
  006;                                                       Contents and conditions of the legislation
• Fiscal incentives: reduced VAT rate on solar products       • Beneficiaries: all operators of PV installations < 1 MW;
  (10 %) and possibilities to deduce up to 36 % from PV       • Feed-in-tariff (consisting of  components: fixed bonus
  investment cost from personal income tax;                     +net metering or electricity (retail price): approx. 0,61 €/
• Tendering system: the new feed-in-tariff system               kWh (< 0 kWp) - 0,59 €/kWh (0–50 kWp), competitive
  has introduced a competitive tendering procedure              pricing (50 kWp–1 MWp);
  for installations > 50 kWp from 006 on; the projects       • Decrease mechanism:  % p.a.;
  offering the lowest feed-in-tariff will be selected by      • Guarantee period: 0 years;
  GRTN;                                                       • Cap: for the moment 100 MWp (60 MWp for systems
• Quota obligation system: Green Certificate system is in       < 50 kWp) – will be soon lifted to 300 MWp in line with
  place since 00, but excludes PV;                            official target;
• Green pricing systems: not known from Italy.                • Financing model by centralised compensation scheme:
                                                                surplus cost for feed-in-tariffs will be charged to final
Electricity sector regulations relevant for the PV market       consumers.
• Plant authorisation: large number of electricity sector
   acts and decrees transform the corresponding EU            PV support schemes: “Tetti Fotovoltaici” programme
   directives; in charge of authorisation is the provincial
   administration;                                            General characteristics of support schemes
• Grid access code: current code applies only for PV          • Type of system: subsidy scheme promoting small,
   installations < 0 kWp, the new regulations for larger-      grid-connected PV installations < 0 kWp upon private,
   scale plants has been published by AEEG in 005;             commercial and public buildings; separate sub-


 34    PV Policy Group – European Best Practice Report
    programmes for private individuals/corporations and         • Institutions in charge: Ministry for Environment (MATT),
    public institutions;                                          national energy agency (ENEA);
•   Start/expiry date: the programme was already                • Data collection & processing: so far only applications
    announced in the late 90ies, but postponed various            from national “Tetti Fotovoltaici” programmes are
    times due to administrative times; even after finally         systematically evaluated; obviously the transfer of
    being put into force in 001 its actual implementation by     data delivered by the regions to MATT does not work
    most Italian regions took further –3 years, forcing the      smoothly so that overall programme evaluation is
    PV sector in a state of limbo (“negative announcement         delayed; in addition, industry associations conducts
    effect”);                                                     surveys among its members;
•   Target: originally ambitious target of “10.000 solar        • Data dissemination: sluggish market development is
    roofs” soon banned from programme title and reduced           reflected in the quality of data material; publications
    to .000;                                                     by MATT are outdated, the information policy is not
•   Total budget: 1. Sub-programme 1 (“Enti Pubblici”)            satisfactory.
    € 10,3 Mio by MATT; . Sub-programme  (“Bandi
    Regionali”) € 50 Mio. by MATT & regions; 3. Sub-            National approach to performance measurement of PV
    programme (“PV ad alta valenza architettonica”): € 1,6      policy framework
    Mio. by MATT;                                               • General approach: new Renewables act from
•   Funding: 1. federal budget by the Environmental                1/003 foresees introduction of a monitoring group
    ministry (50 %); . regional budgets (50 %).                   (“Osservatorio”) with delegates from the key political
                                                                   institutions (such as MAP, MATT, ENEA, GRTN,
Contents and conditions of the support schemes                     AEEG); details of the approach are not known;
• Beneficiaries: 1. private individuals; . corporations; 3.    • Institutions in charge: MAP, MATT and ENEA officially
  public bodies;                                                   in charge or policy monitoring;
• Type of support: direct subsidies (grants) covering up        • Data collection & processing: roundtable with key
  to 75 % of total investment;                                     actors hosted by MATT;
• Level of support: depending on project size, from max.        • Data dissemination: no assessment reports available
  € 7.30 €/kWp (0 kWp plants) to max. 7.750 €/kWp                so far.
  (1–5 kWp);

PV monitoring systems

National approach to PV market monitoring
• General approach: so far market monitoring consists
  of the evaluation of the “Tetti Fotovoltaici” programme
  by MATT that is supposed to cover most of the market;
  in addition, associations like GIFI and ISES Italy are
  surveying the market;



                                          B. Country Analysis – assessment of 1 national PV policy frameworks       35
5.2 Conclusions from country analysis                           • The single regions put the common regulations into
                                                                  practice in a very different way, what led to inefficiencies
General assessment of performance                                 and confusion among market actors;
• Market development: very disappointing given the high         • However, all call-for-tenders were characterised by
  natural potential, but also the considerable budgets            long, bureaucratic procedures;
  invested in the PV sector so far; fundamental upswing         • Due to the fairly limited budgets the call-for-tenders
  expected following the change in the regulatory                 could not satisfy the existing demand; only 15–0 % of
  framework in 09/005;                                           applications were accepted overall;
• Industry development: due to the sluggish home market         • The programmes did not require effective monitoring
  fairly weak national PV industry; however, relatively           systems for performance measurement of the plants;
  large number of players, so a high growth in line with          however, it may be suspected that a large part of PV
  overall market development is expected from 006 on;            plants was falling short of performance targets;
• Cost reduction: price levels (and margins) for turn-key       • The programmes promoted only small installations, that
  systems in Italian PV market fairly high in comparison          naturally have a weak leverage effect in the public;
  with more competitive markets such as Germany;                • Due to the capacity threshold of 0 kWp per installation
  however, with market growth and influx of foreign               operators were offered only limited business
  competitors will drive prices down and make margins             opportunities; as a result, commercial investors were
  for system suppliers shrink;                                    hardly attracted by „Tetti Fotovoltaici“;
• PV acceptance: still fairly low level of awareness;           • Local authorities (municipalities, provinces) mainly
  however, high hidden demand by key target groups                opted for single, small-scale installations, instead
  such as installers, planners, public authorities, investors     of common, large-scale projects of a wider public
  and the general public.                                         impact.

Strengths of national PV policy framework                       Other areas:
                                                                • Very bad market monitoring and policy performance
Feed-in-tariff system (Conto Energia)                             measurement;
• Increase of maximum capacity from 300 kWp to
  1.000 kWp                                                     Lessons learned
• Inclusion of open-land installations in feed-in-tariff        Overall, the outcomes of national support schemes were
  system                                                        very disappointing. Although public budgets were fully
• Possibility for connection to the medium-voltage grid         invested, the success in terms of a sustainable market
• Sufficient level of feed-in-tariff for installations          development is more than modest:
  < 50 kWp                                                      • Larger-scale installations with a leverage effect for the
• Increase of guaranteed period of feed-in-tariff from 15          PV sector were not promoted at all;
  to 0 years                                                   • The installations had no real impact in terms of falling
• Annual decrease of feed-in-tariff of only  % p.a.               PV system prices;
  (instead of 3 %)                                              • Operators were not able to make profits with their
• “Competitive procedure” limited to installations                 installations, which could have been re-invested;
  > 50 kWp                                                      • Awareness or acceptance of PV in the Italian public
• Possibility to combine feed-in-tariff with regional              was not raised, so no critical mass in demand (“pull
  investment subsidies                                             effect”) was triggered.
• Flexibility regarding capacity cap of 100 MWp until 010
  (may be revised)

Weaknesses national PV policy framework

Feed-in-tariff system (Conto Energia)
• New competitive mechanism for installations
  > 50 kWp;
• “Hybrid” remuneration system forcing operators to deal
  with two different authorities (regulator appointed by
  AEEG and local utility;
• Centralised permission procedure that could extend
  the required lead-time of max. 3–4 months for investors
  considerably;
• No specific feed-in-tariff for building-integrated PV
  installations (BIPV).

Support scheme “Tetti Fotovoltaici”
• The regions were technically unprepared for the
  requirements of an efficient programme administration;
  this fact led to enormous implementation problems;



 36    PV Policy Group – European Best Practice Report
6. Japan                                                        production of solar cells and PV modules in Japan
                                                                reached the 100 MW level in 000, and it increased to
6.1 Country profile                                             500 MW scale in 004.
                                                            •   Silicon and wafer production: Several companies are
PV market                                                       active in producing ingot and wafer: M.Setec, JFE
                                                                Steel, Sumitomo Mitsubishi Silicon, Metal Reclaim,
Natural conditions                                              Tokuyama, Kyocera. They all purchase Si feedstock
• Solar radiation: n.k.                                         from outside.
• Specific energy yield of PV plants: ranges from 1.000–    •   Cell production: The world’s biggest cell producers
  1.100 kWh/kWp                                                 are located in Japan: Sharp (market share of 5,8 %),
                                                                Kyocera (8,3 %), Mitsubishi Electric (6,0 %), Sanyo
Market background and history                                   (5,4 %). Japan dominated the market for PV cells with
• Historic development: the long-term Japanese PV               a share of 47,3 % (594,1 MW) in 004.
  research and development programmes as well as the        •   Module production: All cell manufacturers mentioned
  measures of market implementation started in 199.            above are vertically integrated and therefore produce
  In the framework of the “New Sunshine Project – 1st           PV modules too. With the exception of Mitsubishi
  Stage” (1993–001) PV was one of the new energies             Electirc, these corporations are setting up additional
  under investigation. This highly successful programme         module lines abroad, while expanding cell production
  underwent a basic review in 000, which lead to the           at home. All this new Japanese module capacity in
  outline of the new PV technology programme called             Europe, together with the expansion plans of domestic
  “Advanced PV Generation”. Basic guidelines: reduce            companies, will result in a combined capacity of around
  dependence on petroleum imports, commitment under             970 MW by the end of 005.
  the Kyoto Protocol, establishment of a prospering         •   PV component production: With the growth of the PV
  market;                                                       system market, manufacturers of balance of systems
• Current trends: in the residential PV market,                 (BOS) have been actively increasing their capacity
  dissemination of PV systems for newly built and               investment.
  existing houses has been successfully ongoing, and
  the market size has expanded to annual sales of over      Key industry data
  60.000 systems.                                           • National cell production capacity: 594,1 MW (004)
• PV image/acceptance: generally very high profile in       • National module production capacity: 970 MW by the
  the general public.                                         end of 005 (estimation by Photon International, March
                                                              005, p. 66 et seqq.)
Market size and growth                                      • Annual sales of national PV industry: 1.68 Mio €
• Annual installed capacity: 7 MWp in 004 (3 MWp         (003)
  in 003); Nr.  worldwide behind Germany                  • Employment in PV industry: 11 300 (003)
• Total installed capacity: 1.13 MWp in 004 (860 MWp      • Average PV module prices: 3,3 €/Wp (004)
  in 003), Nr. 1 worldwide                                 • Average PV system prices: 5,0 €/Wp (004)
• Annual growth rate: + % in 004 (+1 % in 003)
• Installation density: 8,87 kWp/1.000 habitants
• Growth perspectives: stable market growth of about        PV policy strategy and regulatory framework
  30 % per year                                             (overview)

Market structure                                            National strategy and framework for PV promotion
• Market segmentation: 9 % grid-connected, 8 % off-        • National PV targets: Cumulative volume for PV system
  grid; Japanese regulations are mainly pushing the grid-     introduction was set at 4.80 MW by FY010.
  connected segment                                         • National PV strategy / plan: The strategic promotion of
• Project sizes: Residential PV systems very clearly          PV is based on a combination of different instruments:
  dominate the domestic PV market with about 85 % of          Net-billing, subsidy schemes (residential PV system
  the share. The average residential PV system in Japan       dissemination programme), fiscal incentives, quota
  had a size of only 3,8 kWp                                  regulations for utilities (since 00). The Japanese
• Regional distribution: n.k.                                 policy is much more market oriented than the European
                                                              and aims at establishing a prospering market.
Administrative processes                                    • National PV administration: The main implementation
• Complexity of planning process: n.k.                        programmes are carried out by METI – the Ministry of
• Number of permissions required: n.k.                        Economy, Trade and Industry. Under the direction of
• Number of authorities involved: n.k.                        METI, NEF (New Energy Foundation) is responsible
• Duration of planning process: n.k.                          for the support schemes for residential PV systems
                                                              and NEDO (New Energy and Industrial Technology
PV industry                                                   Development Organisation) for the support schemes
                                                              for public and industrial uses. Also the number of
PV industry structure and development                         local governments providing their own subsidies and
• The PV industry in Japan has been rapidly growing           preferential loans has been increasing over the years.
  toward self-sustainability of the industry. The annual


                                       B. Country Analysis – assessment of 1 national PV policy frameworks       37
National PV incentive system                                     customers, and contribute the same endowment as the
• Feed-in-tariff system: There is no actual Feed-in-tariff       amount of their supporters’ contribution for installation
  in place but “Net-billing”: average electricity prices for     for PV systems and wind power generators.
  grid-connected PV, 4 Yen/kWh for residential use and
  10–1 Yen/kWh for industrial use.                            Electricity sector regulation relevant for the PV market
• Investment support system: The main subsidy                  • Electricity plant authorisation: n.k.
  programme is the “Residential PV System Diss-                • Grid access code: n.k.
  emination Programme” initiated in 1994. The total            • Sector regulation: n.k.
  number of PV systems installed under this program            • National plant register: n.k.
  expanded to the scale of 00.000. Other programmes:
  “Project for Promoting the Local Introduction of New         Building sector regulation relevant for the PV market
  Energy” (support of regional projects developed by local     • Building standards: In the building standard law, PV
  governments), “Project for Supporting New Energy               modules were defined as building materials in 1999
  Operators” (support for industrial entrepreneurs), Field     • Solar building obligations: n.a.
  Test Projects for industrial and other applications and      • Regulations for building-integrated PV: n.a.
  for new PV technologies.
• Fiscal incentives: There are fiscal incentive programmes     PV industry regulations relevant for the PV market
  for government buildings and schools. Some house             • Quality standards for PV products: Japan Electrical
  manufacturers offer interest reduced mortgages for             Safety & Environment Technology Laboratories (JET)
  homes with PV systems included. The reduction in               started a certification program of PV modules, “jet-
  interest rate is 1 to  percentage points and is not only      PV-certification” in October 003 (consistent with
  available for the financing of the PV system, but often        international IEC standards).
  for the whole mortgage. (PV Status Report 004, A.           • Quality standards for PV installations: JET conducts a
  Jäger-Waldau)                                                  certification program for the performance and reliability
• Tendering systems: none                                        of grid connection protecting unit for small-sized
• Quota obligation system: RPS – Renewables Portfolio            residential PV systems.
  Standard, imposes an obligation on electricity retailers     • Quality standards for PV installers: n.a.
  to use a certain amount of electricity from new energy
  (solar, wind, biomass, hydro, geothermal)                    Key PV legislation: n.k.
• Green pricing models: Electric power companies
  established “Green Power Fund” in October 000. The
  utilities bill an additional charge as a contribution at
  500 JPY/share/month to the supporters among their




 38    PV Policy Group – European Best Practice Report
Key PV support scheme: residential PV system                     in 1998, , mill. JPY in 00, est. 1,9 mill. JPY in 004.
dissemination programme                                          It is interesting to note, that despite a considerable
                                                                 price reduction, the percentage share of the module
General characteristic of the support scheme:                    within the system increased between 1998 and 003,
• Type of system: Subsidy scheme                                 whereas the construction costs decreased.
• Focus area: residential, grid-connected PV systems           • PV acceptance: PV is highly accepted. An increasing
• Start/expiry date: 1994 to March 006                          number of customers focus their attention on economic
• Administration: New Energy Foundation (NEF)                    efficiency as well as environmental impact.
• Targets of the programme: Perception to PV,
  dissemination of PV, creation of the initial market for      Strengths of national PV policy framework
  residential PV systems, collection of PV operation           • Japanese PV policy is market-oriented and aims at
  data                                                            establishing a prospering market.
• Total budget: 5,5 bn. JPY for 004, carry over from         • Long-term policy and commitment, which the industry
  003 not known (PV Status Report 004, A. Jäger-                can rely on.
  Waldau)                                                      • Housing manufacturers developed houses, which
• Funding: The programme is funded by METI, the                   combine PV installation, energy efficient water supply
  Ministry of Economy, Trade and Industry, and ANRE,              and an airtight housing structure and offer reduced
  the Agency for Natural Resources and Energy.                    interest rates for homes with PV systems.
                                                               • There is a strong focus on the establishment of
Contents and conditions of the support scheme:                    international standards and the transfer of new
• Subsidy: 45 000 Yen per 1 kWp in 004, level of subsidy         Japanese business models worldwide.
  is declining constantly year per year (PV Status Report      • A considerable number of municipalities are offering
  004, A. Jäger-Waldau)                                          additional subsidies.
• In the residential PV market, dissemination of PV
  systems for newly built and existing houses has              Weaknesses of national PV policy framework
  been successfully ongoing, and the market size has           • It is planned to phase out the METI subsidies after 005.
  expanded to the annual sales of over 60 000 systems.           Critics fear that this would also lead to the withdrawal
  (IEA, Japan – Photovoltaic technology status and               of many Prefectures supports schemes and eventually
  prospects 004).                                               would end willingness of utilities to grant net-metering.
• Qualifying for subsidy a PV system must meet the               (PV Status Report 004, A. Jäger-Waldau)
  technical specifications established by NEF and at
  the same time satisfy the following provisions: system       Lessons learned
  capacity below 10 kW, new systems only, system               • It is the combination of different policy instruments
  installation work must be completed after the date of          that leads to a successful PV market implementation.
  receipt of subsidy application. (www.nef.or.jp/english/)       Also the time of their introduction has to be well
• After two years of installation of the PV system, the          coordinated.
  subsidized user will be required to report on system         • Long-term commitment is essential for the industry
  operation etc. on a regular basis.                             and investors.

PV monitoring systems
                                                               Outlook
National approach to PV market monitoring                      • More and more industries such as the building material
• No information                                                 industry, the housing industry, the construction
                                                                 industry and the power source equipment industry,
National approach to performance measurement of PV               have been engaged in the PV market. The PV system
policy framework:                                                market is expected to expand and grow to be a self-
• No information                                                 sustainable market in the near future, by achieving cost
                                                                 reduction with the government’s support for research,
                                                                 development and introduction of PV systems.
                                                               • The residential PV system dissemination programme
6.2 Conclusion from market analysis                              will run out in March 006. Nevertheless a stable
                                                                 market growth is expected. Further price reductions
General assessment of performance                                shall compensate the no more available subsidies.
• Market development: In 004 Japan lost its position as
  biggest PV market to Germany. But still Japan has a
  stable market growth of more than 0 %.
• Industry development: Japan dominates the market for
  PV cells with a share of 47,3 % (594,1 MW) in 004
  and all manufacturers announced massive increases
  of production capacities. Also the biggest module
  manufacturers are located in Japan.
• Cost reduction: The average price for a 3 kWp system is
  declining constantly: 6,0 mill. JPY in 1994, 3,0 mill. JPY


                                         B. Country Analysis – assessment of 1 national PV policy frameworks          39
7. Netherlands                                                  procedure is relatively straightforward and lead times
                                                                for the investor short;
7.1 Country profile                                           • Number of permissions required: none, following
                                                                a change in legislation in 003, PV no longer falls
PV market                                                       under the building regulations regarding the external
                                                                appearance of buildings.
Natural conditions                                            • Number of authorities involved: none
• Solar radiation: 1.000 ± 50 kWh/m p.a.                     • Duration of planning process: none
• Specific energy yield of PV plants: ranges from 700
  kWh/kWp in the South-East to 800 kWh/kWp in the             PV industry
  North-West regions.
                                                              PV industry structure and development
Market background and history                                 • Silicon / wafer production: not known;
• Historic development: the PV market in the Netherlands      • Cell production: at least four Dutch producers of solar
  developed in the 80ies, first mainly with stand-alone         cells, all of them just entering this business;
  applications, later increasingly with grid-connected        • Module production: the same applies to the three
  systems; in the meantime also several large-scale             module manufacturers who are partly entertaining
  projects of MW class have been realised; until 00           production facilities in Germany; further module
  the overall market development was very dynamic;              productions are in a planning stage;
  however, since the change of the government in 00         • PV component production: the Netherlands are basis
  RES policies in general were cut and PV in particular         for some of the leading inverter manufacturers in
  fell back in the short-term policy agenda in favour of        Europe; overall, there are five producers known, as
  wind and biomass;                                             well suppliers of specialised PV components such as
• Current trends: currently the PV market of small              deposition machinery.
  roof-top systems typical for the NL so far practically
  “collapsed”, is in a state of limbo;                        Key industry data
• PV image/acceptance: fairly high due to successful          • National cell production capacity: 0 MWp in 004
  policies in recent years.                                     (+ 0 %); 15 MWp in 005
                                                              • National module production capacity: 0 MWp in 004
Market size and growth                                          (+ 0 %);
• Annual installed capacity: + 3, MWp in 004 (+ 19,6 in     • Annual sales of the national PV industry: € 59 Mio. in
  003) – very sharp slump in comparison to 003!               004 (350 Mio. in 003, - 83 %);
• Total installed capacity: 49,08 MWp in 004 (45,9 MWp      • Annual investments of PV industry: n.k.
  in 003) – No. 3 in Europe;                                 • Employment in PV industry: 57 in 004 (430 in 003,
• Annual growth rate: + 7,0 % in 004 (+ 745 % in 003)         - 40 %);
  – sharp slowdown;                                           • PV module prices: 3,5–4,5 €/Wp in 004 (project size
• Installation density: 3,01 kWp/1.000 habitants; No. 3 in      dependent)
  Europe;                                                     • PV system prices:.4,5–6,0 €/Wp in 004 (project size
• Growth perspectives: forecasts range from 1,05                dependent)
  MWp (Worst Case) to 7,65 MWp (Best Case) p.a.
  – the actual development will depend heavily on the
  new replacement support schemes currently being             PV policy strategy and regulatory framework
  discussed.                                                  (overview)

Market structure                                              National strategy and framework for PV promotion
• Market segmentation: 91 % grid-connected, 9 % off-          • National PV targets: no specific PV target anymore, the
  grid;                                                         overall RES targets are supposed to be accomplished
• Project sizes: the average size of PV projects in the         mainly by wind and biomass;
  Netherlands is around 0 kWp. The Dutch market              • National PV strategy / plan: currently PV is not top
  however is characterised by small (0,6 kWp), grid-            on the political agenda and only part of national R&D
  connected roof-top systems; larger-scale installations        strategies (national energy research programme);
  (up to 1, MWp) exist, but are highly customised              market stimulation activities are close to zero; the
  demonstration projects with a high level of public            current PV policy framework mainly includes a feed-
  involvement;                                                  in-tariff (MEP) and net metering system, some fiscal
• Regional distribution: no exact data on regional              measures (REB, EIA) and a few investment subsidy
  distribution available; however, PV installations are not     schemes;
  concentrated in certain regions, but well distributed       • National PV administration: energy policy is co-
  across the country.                                           ordinated by the Ministry of Economic Affairs; on
                                                                the operational level, the national energy agency
Administrative processes:                                       SenterNOVEM plays an important role.
• Complexity of planning process: since the cutting of
  the national support scheme EPR a typical small-scale
  installation is realised without any public support; the


 40    PV Policy Group – European Best Practice Report
National PV incentive systems:                                   PV industry regulations relevant for the PV market
• Feed-in-tariff system: the feed-in-tariff is combined          • Quality standards for PV products: international/
  with a net metering system, providing  sources of               European and national quality standards (IEC, EN,
  revenue for PV investors: the MEP regulation imposes             TÜV) for PV products have to be complied with;
  the obligation on utilities to pay a fixed price for green     • Quality standards for PV installations: have to meet
  certificates acquired by PV operators; in addition, the          NTA standards and NEN safety requirements for low
  electricity fed into the grid is remunerated at market           voltage installations;
  prices (net metering);                                         • Quality standards for PV installers: no different than for
• Investment support schemes: since the abolishment                other installers
  of the old EPR system there is currently no directive
  incentive system in place;                                     Key PV legislation: MEP + net metering system
• Fiscal incentives; yes, include so-called “green financing”
  instrument, which means that PV investments are                General characteristics of legislation
  exempt from wealth tax and partly eligible for income          • Type of system: fixed feed-in-tariff in place since
  tax reductions; in addition, companies receive a 44 %            003, from 005 on to be combined with net metering
  extra reduction from corporate tax (EIA – energy                 system; the competitive Dutch philosophy led to no
  investment rebate); until 005 RES were subject to a             specific feed-in-tariff for a less economic technology
  reduced rate of Energy Tax (REB), but have lost this             as PV, but the same as for offshore wind energy; so
  advantage to conventional energies by now;                       levels are fairly low; the MEP (“environmental quality
• Tendering system: not in place on a nationwide level;            of electricity production”) regulation obliges utilities to
  however, authorities on the municipal level may call-            remunerate green certificates obtained from regulating
  for-tenders for PV projects;                                     body CertQ; in addition, the net electricity fed into the
• Quota obligation system: none.                                   grid (max. 3.000 kWh p.a.) is paid at market prices;
• Green pricing systems: yes:                                    • Starting/expiry date: fixed feed-in-tariff since 003,
  – Sales of electricity is subsidised by the government           net metering since 005; no expiry date defined in
     with € 0,097/kWh                                              legislation;
  – Up to 3000 kWh / yr, utilities are forced to deduct the      • Administration: co-ordination by Ministry of Economic
     produced PV power from the consumed power.                    Affairs, but operational management by EnerQ (for
  – green electricity is sold at around the same price as          payments) and CertQ (for plant certification), as well
     grey electricity. This is done without subsidy. Utilities     as utilities (net metering);
     take the losses as marketing/promotion costs.               • Targets: no specific targets other than the overall Dutch
                                                                   RES targets;
Electricity sector regulations relevant for the PV market        • Long-term legal security of the MEP regulation: fairly
• Plant authorisation: there are no specific regulations           high as it is embedded in the electricity sector law;
   for installation and grid connection of PV systems;             the net metering system with recent amendment of
   covered by general Electricity Act in line with EU              the electricity sector law has also become part of the
   directives; in charge of authorisation procedures are           overall energy legislation.
   provincial governments/administration;
• Grid access code: grid-connection agreement and                Contents and conditions of the legislation
   feed-in-contract is closed with local utility;                • Beneficiaries: mainly operators (private households
• Sector regulation: ensured by regulator E-Control;               and companies) of larger-scale systems since high
• National plant register: none so far.                            access fees (charged by EnerQ) do not pay off for
                                                                   small operators;
Building sector regulations relevant for the PV market           • Feed-in-tariffs: 0,097 €/kWh + electricity tariff 0,–0,3
• Building standards: the “Bouwbesluit” building directive         €/kWh, so overall 0,3–0,4 €/kWh
  defines new energy efficiency standards for new                • Decrease mechanism: none;
  buildings; currently the relevance for PV is limited, but      • Guarantee period: 10 years;
  will when these standards are sharpened from 006              • Financing model: tariffs are directly paid by the local
  on so that PV installations could become economic                utilities; compensation of extra cost by grid-connection
  solutions to meet requirements; in addition, PV                  fees, so may eventually charged to final consumers;
  installation have to comply with the Dutch NEN 1010            • Economic cost of legislation:
  regulation;                                                      – MEP: to apply for MEP subsidy a connection fee of
• Solar building obligations: none known in the                        € 5, an annual membership fee of € 5, and often
  Netherlands; however, municipalities may impose                      the purchase of a new meter are required. These
  energy performance standards (EPC, EPL) for new                      have to be paid by the PV energy producer.
  buildings for which PV may be an option;                         – Net metering: Only a bidirection meter is required.
• Regulations for building-integrated PV: while BIPV                   Costs for the exchange of the meter (where
  installations cannot be banned by building inspection                necessary) are for the utility.
  authorities anymore, there are no specific promotional
  measures for this segment in place.




                                           B. Country Analysis – assessment of 1 national PV policy frameworks          41
PV support schemes: EPR programme                             PV monitoring systems

General characteristics of support schemes                    National approach to PV market monitoring
• Type of system: directed investment subsidies; key          • General approach: Monitoring of the produced
  market stimulation instrument started in 000 for             electricity. Mainly as part of the monitoring of the
  energy saving applications. PV was supported from             contribution of RES to the energy production. Specific
  001. The scheme was suspended in 003; attractive            questions concerning installed power, production
  conditions triggered a run of applications and a 300 %        capacity, etc. are added to fulfil the IEA PVPS Task 1
  market growth in the Netherlands, so politicians had to       requirements.
  stop it to avoid outstretching budgets;                     • Institutions in charge: association Holland Solar, the
• Administration: launched by the Ministry of Finance,          energy agency SenterNOVEM (also IEA-PVPS part-
  but operationally managed by the utilities;                   ner); in addition the national statistical institute CBS;
• Starting/expiry date: 001–003;                            • Data collection & processing: data are collected
• Targets: no specific target defined, in line with overall     by the research institute ECN in collaboration with
  RES targets of the Dutch government;                          SenterNOVEM and Holland Solar; data delivered are
• Total budget: no fixed budget, actual subsidies               then processed by CBS according to a monitoring
  estimated at € 40–70 Mio in 001–003 (8,5 for grid-          protocol developed by SenterNOVEM;
  connected plants), triggering overall investments of        • Data dissemination: results are finally published on the
  150 Mio. only in 003.                                        websites of CBS, SenterNovem and IEA-PVPS; partly
• Funding: federal budget (revenues of the Ministry of          also by ECN; in addition, there is targeted dissemination
  Finance from the REB energy tax on electricity and            towards national key actors.
  gas consumption).
                                                              National approach to performance measurement of PV
Contents and conditions of the support schemes                policy framework
• Beneficiaries: mainly private households;                   • General approach: policy measures are monitored and
• Type of support: investment subsidy (grant);                   results measured against overall political RES targets;
• Level of support: 3.500 €/kWp – could be extended by        • Data collection & processing: usually specialist
  5 % in case of an EPA (Energy Performance Advice)             consultants (e.g. PWC) collects data by means of
  certification of the installation.                             interviews/surveys on behalf of the Ministry of Economic
                                                                 Affairs; the programme performance is measured also
                                                                 in commission of the Ministry;
                                                              • Data dissemination: the management organisations
                                                                 usually perform annual or semi-annual assessments
                                                                 and report to the Ministry, who take results as a basis
                                                                 for amendments; no official reports are published for
                                                                 the general public.


 4    PV Policy Group – European Best Practice Report
7.2 Conclusions from country analysis                           • ERP-PV: lack of budgetary control for the government
                                                                  as there was no built-in limit on the budget. The number
General assessment of performance                                 of applications depended thus solely on market
• Market development: Market development was strong               conditions.
  until 004. Cumulating subsidies caused excessive             • ERP-PV: time scale. This made the EPR hard to use
  growth in 003. Ending of the main support schemes              for large scale building projects. Commitments had to
  caused a fallback in 004. Present schemes are com-             be made at the beginning of the project. Application for
  plicated.                                                       the subsidy however could only be done by the owners,
• Industry development: In 003 the main cell industry            after the completion of the houses. As this often took
  left the Netherlands. No significant production is left. In     place more than a year after the orders for the PV
  spite of the low Dutch PV market AKZO and Solland               systems were made, the probabilities of changes in
  Solar may start production in the near future                   the tax regime were high. Therefore no certainty for
• Cost reduction: In spite of the low Dutch PV market, se-        eligibility for a subsidy could be given at the time of
  rious price reductions were achieved. This was caused           ordering the systems. This caused many construction
  mainly by the large market at the end of 003, allowing         companies not to invest in PV.
  suppliers, contractors and installer to gain experience       • Net metering: difficult to organise as the collaboration
  and develop cheaper constructions and procedures                of the utility (who does not take any advantage from it)
• PV acceptance: Acceptance is and was high and has               is required; still insufficient to make PV competitive;
  not changed significantly over the last years. Applica-
  tion still strongly depends on government support             Lessons learned
                                                                • MEP: Expenditure on such a regulation can be rather
Strengths of national PV policy framework                         predictable in a stable and reasonably elastic market.
• MEP: Basically MEP considered as a strong instrument;           But in 003 the Dutch market became unstable due to
   however, tariffs are too low                                   other PV investment subsidies. Some of them came
• MEP: according to last assessment report MEP                    from local authorities. These influenced the market
   functions rather well: more long term support guarantee        only locally. Others were set up by the utilities, using
   (10 yr) than previous incentives, no money flow out            MAP fund reserves (funds entrusted to them from
   of the country, the direct relation between MEP and            earlier REB earnings and that the government would
   increase of initiatives can not be established yet, a          claim back if not used before the end of 003). These
   clear relation in the near future is expected.                 subsidies had a much larger impact. In some cases
• ERP-PV: investment security for private investors               the combined use of the subsidies rendered the PV
   (households as key market segment in NL);                      systems free for the end-user, while being quite
• ERP-PV: very good PR effect, made PV very popular               profitable for the industry. In a few months the number
   in NL;                                                         of PV installations soured and so did the number of
• Net metering: easy to apply; stimulating individuals and        EPR – PV applications, leaving the Ministry with no
   thus increasing awareness.                                     other option than to close the regulation (with a notice of
• EIA: instrument is closely related to long-term                 one month, in which period the number of applications
   incentives between government and industry; this               doubled again) In hindsight one can conclude that the
   makes it effective and uncomplicated instrument;               EPR was very popular with the target group, rather
                                                                  efficient and effective, but for such a regulation to be
Weaknesses national PV policy framework                           budgetary controllable, stacking with other subsidies
• MEP: Feed-in-tariffs too low since they are defined             should be limited and controlled.
  on uneconomic assumptions (same level a offshore              • Performance measurement: One common factor in
  wind parks!), so PV installations far from attractive for       all the evaluation is the struggling of the evaluators
  investors                                                       with programme objectives. Program objectives are
• MEP: for the MEP no budget limit is fixed. Politicians          not always clear and often change during programme
  see this as a danger. EnerQ and the government will             execution.
  evaluate the controllability of the scheme.
• MEP: High membership fee and complicated                      Outlook
  registration for EnerQ make it uneconomic especially          • Under the present regime no significant changes in
  for small investors;                                            public support are expected. PV is considered a long-
• Net Metering is arranged by the utilities. They are             term option. The government has therefore chosen to
  obliged to provide the individual house- and PV system          support PV RTD rather than PV implementation. The
  owner with a two directional meter or two separate              Dutch PV market will stay low. PV RTD however will
  meters for in- and outgoing energy. This however                keep (regain) its strong position.
  appear to be hard to arrange. Furthermore presently           • The Energy Performance Requirements for Buildings
  utilities think they are free to decide upon the purchase       (EPC) may force parties to at least consider the
  price, which may fall down to the wholesale price of €          application of PV in new buildings. Some real estate
  0,04–0,05/kWh. This hardly compensates for the effort           developers are experimenting with this approach.
  to get the net metering arranged. The law however             • In the present market, only very few installers are
  clearly describes that the kWh’s delivered to the grid          willing to acquire experience with implementation of
  should be deducted from the kWh’s purchased from                PV.
  the grid before billing;


                                          B. Country Analysis – assessment of 1 national PV policy frameworks          43
8. Portugal                                                     PV industry

8.1 Country profile                                             PV industry structure and development
                                                                • Silicon /wafer production: none so far;
PV market                                                       • Cell/module production: 1 module production site from
                                                                  Shell Solar with a capacity of 17 MWp
Natural conditions                                              • PV component production: A dozen companies
• Solar radiation: 1.700 ± 300 kWh/m²                             are supplying and installing PV modules. A few of
• Specific energy yield of PV plants: ranges from 1.400           them produce power electronics for stand-alone PV
  kWh/kWp in the North to 1.650 kWh/kWp in the South              applications.
  on average.
                                                                Key industry data
Market background and history                                   • National cell production capacity: none
• Historic development: Up to 001 very little activity.        • National module production capacity: 10,8 MWp in
  In 001 under the E4 programme a national target of             00.
  50 MWp was announced. Together with the defined               • Annual sales of the national PV industry: estimated
  feed in tariffs, split in system under and above 5 kWp,         .5 Mio € in 005 with 410 % increase compared to
  increasing interest in grid connected PV. In 003 the           004.
  government published a new goal of 150 MWp total              • Annual investments of PV industry: n.k.
  installed capacity until 010.                                • Employment in PV industry: 175 in 004
• Current trends: 75 % of the installed total capacity of       • PV module prices: 3,5 €/Wp
  .5 MWp was in the off-grid sector by the end of 004         • PV system prices: 6-8,5 €/Wp
• PV image/acceptance: in spite of a improved market
  development PV has not built a strong image in the            PV policy strategy and regulatory framework
  general public;                                               (overview)

Market size and growth                                          National strategy and framework for PV promotion
• Annual installed capacity: 0,574 MWp in 004                  • National PV targets: an indicative target of 150 MWp
• Total installed capacity: ,6 MWp in 004                       installed by 010 has been set by the government in
• Annual growth rate: 8 % in 004 – but the low level of         003, replacing the old target of 50 MWp
  the absolute numbers needs to be taken to account             • National PV strategy/plan: No specific plan of activities
• Installation density: 0,3 kWp/1 000 habitants in 004           has been designed to reach this indicative target.
• Growth perspectives: not taking into account the 64           • National PV administration: The ministry of Economics
  MWp centralised PV plant in Moura, which is planned             is responsible for energy policy. The indicative target
  to get started in 006, a steady growth of 50 % up to           was set by the Resolution of Councils of Ministers No
  010 is expected                                                63/003. PV is part of the plan for RES, but no special
                                                                  activities for PV are foreseen. PV is seen as support for
Market structure                                                  the two major goals defined under the aforementioned
• Market segmentation: in 004 75 % of the total installed        RCM, which are national security of supply and the
  capacity is in the off-grid market. But due to the feed         promotion of sustainable energy.
  in tariff 0,554 MWp of the 0,575 MWp installed in 004
  was in the grid connected market.                             National PV incentive systems:
• Project sizes: n.k.                                           • Feed-in-tariff system: most important instrument; it is
• Regional distribution: n.k.                                     valid for the first 15 years or the first 1 GWh produced
                                                                  per MWp – whatever happens first (Decree-Law 33-
Administrative processes                                          A/005). Different tariffs for systems smaller and bigger
• Complexity of planning process: clear administrative            that 5 kWp.
  structure, but the process from the initial project idea to   • Investment support schemes: MAPE – this support
  the final connection to the grid is very time consuming         measure gives refundable grants for all types of PV
  and quite complex.                                              systems (ends in 006). It is not focused on PV but
• Number of permissions required: n.k.                            very general aims at RES as RUE and natural gas
• Number of authorities involved: Directorate-General for         conversion projects.
  Geology and Energy (DGGE), the Energy Purchase                • Fiscal incentives: VAT for PV and all other RES
  Office (GBCE) of the distribution grid utility (EDP             equipment is reduced from the maximum rate to the
  Distribuição),                                                  intermediate rate of 1 %; it is possible to deduct from
• Duration of planning process: lead time for investors           the total amount of the annual income the amount spent
  1 months and more – this is seen as one of the main            on the purchase of new renewable energy conversion
  barriers for market deployment.                                 equipment.
                                                                • Tendering system: No formal tendering procedure is in
                                                                  place,
                                                                • Quota obligation system: none;
                                                                • Green pricing systems: n.k.



 44    PV Policy Group – European Best Practice Report
Electricity sector regulations relevant for the PV market         most of its power in daytime (full hours), like PV. A nearly
• Plant authorisation: procedures are clearly defined in          0 % decrease in the tariff arise from that situation.
   Decree-Law 68/1999, which deals with the specific            • Decrease mechanism/guarantee period: the feed in
   authorisation of independent power production                  tariff for a PV power plant shall remain valid for the first
   using RES. Detailed specifications of the technical            1 GWh produced by each MW of installed capacity
   requirements are included; The power production                or for 15 years after the plant comes into operation,
   activity for systems below 150 kW (including grid-             whatever happens first. After this period, the producers
   connected PV systems) used for self-consumption                shall be paid according to the market prices plus any
   (minimum 50 % of production) and delivery of surplus           additional benefits coming from the sale of green
   to the grid or to a third party at low voltage are covered     certificates.
   separately in Decree-Law 68/00                             • Financing model: The feed-in tariff is paid to producers
• Grid access code: exists in detail, even model contracts        by the grid utility operator (EDP Distribuição), which
   between a independent power producer and the public            is a state owned company. However, these costs
   grid management entity are provided;                           incurred by the government with the feed-in tariff are
• Sector regulation: n.k.                                         then included by the Energy Services Regulatory
• National plant register: n.k.                                   Body in the price defined for electricity sold to final
                                                                  consumers, so it is the final consumers of electricity
Building sector regulations relevant for the PV market            who are actually paying the additional cost set by the
• Building standards: there are not yet any building codes        government for the power coming from renewables.
  and regulations specifically related to PV                    • Economic cost: n.a.
• Solar building obligations: There are no such regulations
  yet
• Regulations for building-integrated PV: no specific
  regulations for BIPV.

PV industry regulations relevant for the PV market
• Quality standards for PV products: no official national
  certification or homologation system in place yet
• Quality standards for PV installations: No such
  standards or regulations yet
• Quality standards for PV installers: Nothing specific
  for PV yet. Of course all safety standards of general
  application are valid.

Key PV legislation: feed-in law for renewables

General characteristics of the legislation
• Type of system: Feed-in tariff for all renewable              PV support schemes: MAPE (“support measure
  energies.                                                     for the maximisation of energy potential and
• Start / expiry date: Since 1988, although to most recent      for streamline consumption”)
  changes are dated early 005; expiry date: n.a.
• Targets of legislation: the aim for PV is to install          General characteristics of support schemes
  150 MWp of power capacity by 010; this corresponds           • Type of system: refundable grant (it can be replaced by
  to the need to comply with the Kyoto Protocol.                  payment of interests)
• Long-terms legal security: This legislation can be            • Start / expiry date: 000/006
  abolished or amended by ministerial decision, following       • Administration: the actors involved in the management
  all the necessary administrative steps for that purpose.        of the MAPE are the Institute for Support to Small and
  However, in most previous changes care has been                 Medium Enterprises and to the Investment (IAPMEI),
  taken to assure that producers are not damaged and              and the Regional Directorates for Economy (DRE). The
  that was done either by giving them the opportunity to          Directorate General for Geology and Energy (DGGE) is
  choose between the old and the new system or by giving          the entity in charge of providing a specialised technical
  them better conditions under any circumstances.                 opinion on the projects.
                                                                • Targets of programme: No specific targets for PV or any
Contents and conditions of the legislation                        other RE technology. The general target of the MAPE
• Beneficiaries of the legislation: All single or collective,     is to provide support to projects for the power and heat
  public or private entities can act as independent power         production based on renewables, as well as to RUE
  producers and, consequently, benefit from the feed-in           (rational use of energy) and natural gas conversion
  law.                                                            projects.
• Feed-in-tariff: the price paid for PV in power plants below   • Total budget: For enterprise stimulation there are
  and above 5 kW has set to 0,5 and 0,35 EUR/kWh,                several measures, one of which is Measure 3
  respectively. However, in April 15, an Amendment (nº            – Improving Business Strategies, where MAPE is
  9/005) performed a slight change in the formulation,          included, together with other programmes. The total
  which affects those projects that produce and deliver           public budget for all of Measure 3 is 63.413.010 EUR.


                                          B. Country Analysis – assessment of 1 national PV policy frameworks           45
  Further 77.36.094 EUR is expected to come from              • Data collection & processing: For the feed-in Law,
  private investment. There is no specific budget for PV.         monitoring of power production is made by the
• Funding: of the public budget, 330.497.58 EUR is               distribution grid utility (EDP Distribuição), which
  Community support (ERDF – European Regional                     reports this data to the national transport grid utility
  Development Fund) and the remaining 301.915.75                 (REN) which, on its end, informs the Energy Sector
  EUR are national funds.                                         Regulatory Body (ERSE), so they can reflect the
                                                                  additional costs of the special tariff in the global use
Contents and conditions of the support schemes                    costs of the power system and, consequently, in the
• Beneficiaries: Only companies/firms can apply for               final price of electricity charged to consumers.
  support in the case of PV power project. If the PV            • Data dissemination: for MAPE, periodic reports with
  plant is considered as part of a Rational Use of Energy         the state of the Programme are issued. The information
  project, then also municipalities, business and labour          made available to the public on MAPE through the web-
  associations, schools, health and social action bodies,         site (available on http://www.prime.min-economia.pt)
  and civil protection entities can apply.                        states the number of applications and supported
• Level of support: 40 % maximum refundable aid, maybe            projects by sector (industry, building, commerce, trans-
  less if the plant is to be sited in more developed regions      ports, tourism, services and other), as well as the
  of the country. Refunding should take place in 9 years          amounts of investment and incentive involved.
  following a 3 years leave.
• Only investment projects of more than 5.000 EUR are
  eligible and the programme defines the major limits to
  eligible investment for PV as 3.500 EUR/kW.                   8.2 Conclusions from country analysis

PV monitoring systems                                           General assessment of performance
                                                                • Market development: the Portuguese PV market
National approach to PV market monitoring                         develops slowly. Once, most of the projects currently in
• General approach: monitoring of market development              the licensing stage are actually installed and producing,
  is made by DGGE and by ERSE. The main objective                 this will cause a tremendous growth in comparison the
  for DGGE is to keep track of progress regarding the             little capacities installed so far.
  installed capacity for reaching the 010 target of            • Industry development: still very small PV industry.
  150 MW PV and the contribution of PV to the 010              • Cost reduction: n.k.
  target of 39 % of electricity from renewables and to the      • PV acceptance: Limited awareness of PV among the
  global energy balance of the country. As for ERSE, the          general public and investors.
  objective is to quantify the additional cost imposed on
  the electrical system by the payments made based on           Strengths of national PV policy framework
  the feed-in tariff and, together with all other production
  in special regime, reflect those costs in the price of        Feed-in law:
  electricity to final customers.                               • Raised a lot of interest in grid-connected applications
• Institutions in charge: ADENE has been monitoring, on           of PV systems.
  behalf of DGGE, the global installed capacity (including      • Constant update according to inflation and having a
  off-grid applications) and other market aspects.                relatively high price paid for the power.
• Data collection & processing: the original information
  on grid connected systems is collected by the                 Support scheme MAPE:
  distribution grid operator (EDP Distribuição) based on        • The maximum level of support (40 %) and the time for
  the contractual relationship it has with the independent        reimbursement (1 years) can be considered, to some
  power producers and the monthly invoices they submit            extent, positive aspects
  for payment. This information on power purchase
  is then passed on to the transport grid utility (REN),        Weaknesses national PV policy framework
  which then forwards it to the Energy Sector Regulatory
  Body (ERSE). Consultation of the main actors.                 Feed-in law:
• Data dissemination: the monitoring activities performed       • Only valid for the first 150 MW of installed capacity.
  by ADENE on behalf of DGGE for the IEA-PVPS Im-               • 15 years validity is less than the lifetime of an average
  plementing Agreement, data processing and interpre-             PV plant
  tation is performed according to defined guidelines and       • Lack of stability in the law that has already changed
  then published by the IEA for public dissemination.             twice in 005.
                                                                • Delay in licensing process.
National approach to performance measurement of PV
policy framework                                                Support scheme MAPE:
• General approach: The objective of the PV policy              • PV only plays a minor role in the programme.
   framework is to reach 150 MW by 010. The objective          • Programme is not accessible by private individuals
   regarding the grid-connected systems is to evaluate          • Minimum threshold of € 5.000 for investment.
   the impact the feed-in tariff must have on the electricity   • The limit for support set by the government as
   paid by consumers.                                             3.500 EUR/kW is still below the average price of the
                                                                  technology in the market


 46    PV Policy Group – European Best Practice Report
• No tailoring of the programme to the specific charac-
  teristics of each type of technology.

Monitoring systems:
• A specific PV policy performance measurement
  approach, with critical assessment and evaluation
  aspects, has not yet been introduced.

Lessons learned
• The fact that the feed-in tariff has been reduced twice
  in a few months time arose the feeling that market is
  not stable. Companies are afraid that this may drive
  investors away. Administrative procedure need to be
  short, in order not to deter potential users/investors

Outlook
• The future of the Portuguese market will depend heavily
  on the realisation of the 64 MWp plant in Moura. This
  would reduce the market for other PV projects by 43 %
  with reference to the goal of 150 MWp installed by 010.
  The future market development will also be determined
  by the ability to reduce the administrative effort for a
  grid connected PV system and by the reduction of the
  time needed for this.




                                        B. Country Analysis – assessment of 1 national PV policy frameworks   47
9. Slovenia                                                   • Number of authorities involved: three authorities
                                                                (distribution company, ministry of environment and
9.1 Country profile                                             space, operator of the distribution grid)
                                                              • Duration of planning phase: more than five months
PV market
                                                              PV industry
Natural conditions
• Solar radiation: 1.300 +/- 100 kWh/m p.a.                  PV industry structure and development
  Specific energy yield of PV systems: ranges from            • Silicon/wafer production: none
  950 kWh/kWp to 1.100 kWh/kWp (Primorska Region).            • Cell/module production: one Module manufacturer is
                                                                planning to start production by the end of 005
Market background and history                                 • PV component production: There five manufacturers
• Historic development: in the beginning the market             of BOS components including inverters, charge
  in Slovenia consisted only of off-grid system. An             controllers, batteries, lightning and over voltage
  investment programming is subsidising off-grid PV             protection, electronic meters
  systems up to 60 % through a public tender but with
  limited budget. In 00, the government accepted the        Key industry data
  ‘Decree of Qualified Producers’, which allows to feed       • National cell production capacity: none
  electricity into the grid from PV systems for a defined     • National module production capacity: establishment of
  feed-in tariff (0,7 €/kWh up to 36 kWp).                     a PV module (crystalline) production facility in 005;
• Current trends: in 004, the government increased the         estimated capacity of 15 MWp;
  price to 0,37 €/kWh for PV systems up to 36 kWp.            • Annual sales of the national PV industry: n.k.
• PV image/acceptance: still low levels of awareness          • Annual investments of PV industry: n.k.
                                                              • Employment in PV industry: n.k.
Market size and growth
• Annual installed capacity: + 0,007 MWp in 004
  (+ 0,005 MWp off-grid in 003) growth of 500 % in on-       PV policy strategy and PV regulatory framework
  grid sector!                                                (legislation)
• Total installed capacity: 0,113 MWp by the end of
  004 (0,106 MWp by the end of 003); most of the            National strategy and framework for PV promotion
  applications are installed in the off-grid sector
• Installation density: 0,003 kWp/1.000 capita                • National PV targets: no specific PV target only as part
• Growth perspectives: 0,3 b the end of 010 (Worst             as one of the renewable energy sources within the
  Case) and 5,5 MWp by the end of 010 (Best Case)              National Energy Programme
                                                              • National PV strategy/plan: no specific PV strategy –
Market structure                                                see above
• Market segmentation: 5 % on-grid applications, 95 %         • National PV administration: key actor of PV policy:
  off-grid applications by the end of 004; on-grid market      agency for energy efficiency and renewable energy is
  increasing if barriers for the grid-connection will be        in charge to promote and support the development of
  overcome.                                                     RES and rising awareness in this field.
• Project sizes: only few grid-connected PV system exist;
  ranges from 1.1 kWp to 16,3 kWp (installed in 005).        National PV incentive systems
• Regional distribution: only three grid-connected PV         • Feed-in tariff system: regulation and rules for definition
  systems are installed and they are located in three           of prices and for purchase of electricity from qualified
  regions                                                       producers of electricity (official gazette RS, No 5/00;
                                                                Decree on prices and premiums (official gazette
Administration processes:                                       RS, no 5/00, 8/004); Regulation of conditions
• Complexity of planning process: procedure to get all          for acquirement (official gazette RS, no 9/001/,
  formal permissions by the governmental authorities            99/001)
  and electrical distribution utilities and operators are     • Investment support schemes: subventions for small
  very complicated. The requirements are coming from            PV systems through public call launched once a year;
  the experience for bigger conventional power plants           soft loans from environmental funds through tender for
  and not adequate for relatively very small standardised       crediting ecological investments
  PV plants.                                                  • Fiscal incentive system: no fiscal incentives
• Number of permission: The implementation of a low-          • Tendering system: no tendering systems
  voltage PV system requires five permissions which           • Quota obligation system: no quota obligation system
  include: 1) project conditions for connections to the       • Green pricing system: no official and obliged green
  electrical grid, ) consent for connection to the grid,       pricing system; some electricity companies have
  3) contract for connection, 4) acquisition for status of      issued voluntary systems for consumers
  ‘qualified electricity producer’, 5) contract for selling
  electricity




 48    PV Policy Group – European Best Practice Report
Electricity sector regulations                                     Key PV legislation: “regulation of rules for
• Plant authorisation: no regulations regarding building a         definition of prices and for purchase of electricity
   power plant, but other directives and regulations force         from qualified producers of electricity”
   the investor to get several permissions which could
   prevent from building a PV plant.                               General characteristics of legislation
• Grid-access code: grid access is guaranteed only if              • Type of system: fixed feed-in tariff for a period of ten
   technical conditions of the grid allow it, model contracts        years, governmental decree on prices and premiums
   for connection to utility grid and selling of the electricity     for qualified producers of electricity and is adjusted
   are available.                                                    once a year.
• Sector regulation: none                                          • Start/expiry date: .03.00; no expiry date defined;
• National plant register: The grid connected PV plants            • Long-term legal security of legislation: no guarantees,
   are formally registered by few governmental institutions.         can be changed or abolished any time by the
   There is a register of Qualified electricity producers            government
   by the Ministry of the economy, Register of power
   producers by the regulatory Energy Agency of the                Contents and conditions of the legislation
   RS. The producers are mandatory obliged to rapport              • Beneficiaries: all potential investors in electricity
   monthly the main data of the plant and electricity                production facility from RES
   production to the National Statistical Berau.                   • Feed-in tariff:

Building sector regulations                                        Size of the           Fixed price          Premium*
• Building codes and standards: general construction               PV system
  legislations exist and define the necessary documents            Up to 36 kW            0,37 €/kWh          0,34 €/kWh
  for installations of a PV system on the roof.
                                                                   Above 36 kW            0,065 €/kWh         0,031 €/kWh
• Solar building obligations: no obligations exist
• Regulations for building-integrated PV: not existing             * Fixed price and Premium are two separate options and
                                                                   could not be combined. The producers could select to sell
PV industry regulations for the market                             to the operator of distribution grid at fixed price or sell the
• Quality standards for products: Design qualification             electricity by their own and get the premium.
  and type approval for crystalline silicon terrestrial PV
  modules (SIST EN 6116:001) and photovoltaic                    Source: Official Gazette RS, no. 8/04.
  devices – part 10: methods of linearity measurements             • Decrease mechanism: fixed and guaranteed price for
  (SIST EN 60904-10:001).                                           ten years, the government has the right to change
• Quality standards and regulations for PV installers:               the price and other conditions. Changes of prices are
  Electric wiring in buildings, of low voltage, safety               regulated with annual annexes.
  requirements, protection against heat rating and                 • Guarantee period: 10 Years
  electrocution, electrical installations                          • Cap: no cap
• Safety regulations for PV installers: Rules on industrial        • Financing model: financed from an addition for priority
  safety with regards to electric current hazards, rules             dispatch service as a part of price of electricity
  on health and safety requirements for the use of work
  equipment, occupational health and safety act




                                            B. Country Analysis – assessment of 1 national PV policy frameworks             49
PV support schemes:                                           National approach of performance measurements related
a) Scheme 1: “Public call for financial incentives of         to PV policy framework
   investment measures for the use of renewable               • General approach: no control regarding the PV policy
   energy sources in households”.                                framework
b) Scheme 2: “call for tender for crediting ecological        • Institution in charge: n.k.
   investments”.                                              • Data collection and Processing: Although there is no
                                                                 monitoring system in place for the PV policy framework,
General characteristics of support schemes                       the qualified electricity producer have to send monthly
• Type of systems: a) subsidy for small grid-connected           and yearly reports to few formal authorities (see
  and off-grid systems up to 1 kW, call launched every           above)
  year for a one year period or until the available           • Data dissemination: For now even that there are data
  resources run out, b) soft loans without specific focus        collected no publications were performed or published
  of an area.
• Start/expiry date: a) 01.04.005/at the end of the year
  or until the available resources run out, b) 18.0.005/
  expiry date is the same like a)                             9.2 Conclusions from country analysis
• Target: a) no specific target, limitation not given but
  depends on the amount of resources available for            General assessment of performance
  all RES, b) no specific target, limitation not given but    • Market development: PV market development in 005
  covers a very large area of ecological investment             was for the first time more important. The installed
• Total budget: a) 500.000 € available in 005 for solar        capacities were increased from about 100 kW by the
  thermal, heat pumps and PV systems (on- and off-grid          end of 004 to more than 150 kW, or more than 50 %.
  up to 1kW). For it is up to 40 % of investment costs, but   • Industry development: up to now there were no
  max. ,5 €/Wp or .080 € for the whole system, b) 1,5        important industries in the PV sector in Slovenia, which
  million € for ecological investment                           would be willing to promote the photovoltaics on the
• Funding sources: a) State budget of Republic of               basis of the expected economical interest. In 004
  Slovenia, b) State budget or the Republic of Slovenia         we have established a cluster for PV power plants
  and Environmental Fund                                        managed by ApE and it consists of three research
                                                                faculty institutions, ten private companies with broad
Contents and conditions of the support scheme                   experience in production of electrical equipment for
• Beneficiaries: a) mainly households, b) municipalities,       BOS and in designing and installation and four big
  private sector and households, depending on the call          energy companies interested for investing in PV. As
• Type/level of support: a) direct subsidy covering up to       first visible result the company BLUES Solar, one of the
  40 % of investment costs, but max. ,5 €/Wp or .080          partner, decided to invest in production of PV modules
  € for the whole system, b) 70 % soft loans of the             with the anual capacity of 15 MW. The investment is
  investment costs                                              ongoing and will be completed by the end of 005.
                                                              • Cost reduction: n.k.
PV monitoring systems                                         • PV acceptance: Generally the acceptance is high
                                                                but there is still relatively low level of knowledge and
National approach of PV market monitoring                       availability of information on PV technologies.
• General approach: Register of qualified electricity
  producers, Currently, only a 1,1 kWp PV system is           Strengths of national PV policy framework
  registered, objective is to monitor and collect data of
  the installed qualified producers in Slovenia,              Feed-in tariff system
• Institution in charge: Ministry of Environment and          • Feed-in tariff is in full operation and first results are
  Spatial Planning, but also the Statistical Office of the      positive
  Republic of Slovenia and Energy Agency are collecting       • Most effective instrument to stimulate RES market and
  data                                                          PV respectively
• Data collection and processing: Regarding the PV
  Market, installed capacities and produced electricity       Subsidy system
  is collected with the register of qualified producers       • Subsidies are available for off-grid PV systems and for
  managed by the Ministry of Environment and Spatial            small grid-connected PV systems
  Planning. Data of capacities and production are monthly     • Promotion of PV technology
  collected by the Statistical Office of the Republic of
  Slovenia and the forecast for electricity production has    Soft loans
  to be reported to the Energy Agency of the Republic of      • Lower interest rates than commercial loans
  Slovenia;                                                   • Possibility to receive 70 % of the PV investment costs
• Data dissemination: because of the small market no
  data have been published




 50    PV Policy Group – European Best Practice Report
Weaknesses national PV policy framework                          interest to promote PV. The role of the government is
                                                                 so very important and could be implement through
Feed-in tariff system                                            supporting instruments, institutions and enterprises
• Feed-in tariff is to low for bigger investments                in its ownership.
• Casual subsidies available for small PV systems              – The level of general knowledge is low; majority of
  are even negatively influence on development of the            people just believes that the electricity from PV
  market                                                         is clean and cheap. There is a need to introduce
• Very long-lasting procedure until actual the PV system         or support the education about sustainable
  is in operation                                                development, environmental problems, renewable
                                                                 energy sources and in this regard also PV, at all
Subsidy system                                                   levels of education.
• Subsidies are only available for small PV systems and        – PV plants are not known as opportunity for
  serious projects are not taken into account                    architects, designers of building, erecting companies
• Only available for very short periods during each year         and investors. There is a need of execution of
• Potential investors are not acting continuosly but mainly      installations, what will bring criticism and approval
  waiting for new calls and better conditions                    of good implementations.
                                                               – There is a lack of bigger institutional energy
Soft loans                                                       investors. The government could support the
• Procedure for applying is time-consuming and                   implementation of PV plants on public buildings,
  complicated                                                    especially schools, trough the investment capital of
• Forms of applying require financial insurances, which          its energy companies.
  increases the real costs of the loan

Lessons learned
• Adequate, well defined and long-term guaranteed feed-
  in tariff would enable a stable market development
• Procedures for connection to the grid and getting the
  right for the fixed price should be simplified
• Subsidies should be abolished as they negatively
  influence more serious market development

Outlook
• The Slovene government could support the
  implementation of PV plants on public buildings (for
  example schools), by implementing the investment
  capital of the governmentally owned energy companies.
  The initiative by the government would demonstrate it’s
  real believes and interest in PV technology and in the
  renewable energy sources in general.
• The specific investment costs for PV plants are
  relatively high compared with the power producers
  from other renewables or fossil fuels. Beside this fact,
  the natural conditions of solar radiation in Europe,
  gives us a rather low equivalent production time.
  In Slovenia we could count with the equivalent full
  operating hours for PV plants between 900 and 1.100
  hours/year. The first step for developing the market is
  to raise the economical interest of investors. With the
  feed-in tariff system introduced in Slovenia in 00, we
  have followed the example of Germany and the first
  signal was given.
• The penetration of the PV on the market is anyhow still
  rather low. Reasons are the following:
  – The governmental support is available but at
     the same time not transparent and unnecessary
     complicated. The comparison with Germany gives
     a clear signal that Slovenian approach should be
     revised and substantially simplified.
  – The requirements for connection to the grid represent
     a serious barrier for potential investors. Connection
     to the grid must be safe, simple and standardised.
  – At the time being there are no important industries
     and other actors in the PV sector in Slovenia with the


                                         B. Country Analysis – assessment of 1 national PV policy frameworks    51
10. Spain                                                        the leading region in recent years (+ 1,8 MWp in 003;
                                                                 + 0,55 MWp in 004), due to a strong collaboration
10.1 Country profile                                             between political and industry players; other regions like
                                                                 Andalucia (+ , MWp in 004), Cataluna (+ 1, MWp),
PV market                                                        Valencia (+ 1,1 MWp) and Castilla y León (+ 1,1 MWp)
                                                                 have shown the highest growth rate in 004.
Natural conditions
• Solar radiation: 1.500 ± 300 kWh/m p.a.;                   Administrative processes
• Specific energy yield of PV plants: ranges from 1.000       • Planning procedures for smaller-scale PV installations
  kWh/kWp in the North to 1.500 kWh/kWp in the South            are very clearly defined, but sometimes practice by
  on average, for systems without solar tracking.               regional authorities is more complex; specific regulations
                                                                and handling in practice may differ considerably from
Market background and history                                   region to region;
• Historic development: since publication of the national     • Number of permissions required: at least 5 permissions;
  “Plan de Fomento (PFER)” in 1999 the Spanish                  there are three different areas where 1– authorisations
  government follows a clear strategy to promote PV; the        are required respectively (building permission, plant
  Spanish PV industry plays a leading role in Europe,           authorisation (prior and final), registration as RES
  even before the national market really took off;              producer under special conditions of “régimen especial”
• Current trends: the publication of the royal decree           (prior and final), grid connection and feed-in contract).
  436/004 has given the decisive boost to the Spanish        • Number of authorities involved: at least 3 (local
  PV market; investment conditions suddenly are among           authorities for building permission, regional authorities
  the best across Europe and attract investors from             for plant authorisation (prior and final) and for RES
  Spain and abroad; the market is currently at a similar        registration (prior and final), local grid operator/utility
  stage as Germany about 5 years ago;                           for grid access and feed-in contract).
• PV image/acceptance: in spite of the strong market          • Duration of planning process: lead-time for investors
  development PV has not built a strong image in the            4–6 months.
  general public; however, the attractive framework
  conditions are changing this perception.                    PV industry
• New PER 005–010, approved on 6th august 005
  raise the objective up to 400 MW in 010.                   PV industry structure and development
                                                              • Spain hosts one of the leading PV industries in Europe
Market size and growth                                          and worldwide;
• Annual installed capacity: + 10 MWp in 004 (+ 6,5 MWp      • Silicon/wafer production: none so far;
  in 003) – sharp increase in comparison to 00 +           • Cell/module production: three major cell producers that
  003, mainly due to small, grid-connected installations       at the same time produce solar modules; production
  < 0 kWp; second largest market in Europe;                    output in 004 was over 108 MWp, a large share was
• Total installed capacity: 37 MWp in 004 (7 MWp in           exported to the world market;
  003) – No.  in Europe;                                    • PV component production: least 10 producers of PV
• Annual growth rate: + 54 % in 004 (+ 31 % in 003);          components based in Spain, esp. inverters, mounting,
  strong acceleration after publication of RD 436/005          tracking or monitoring systems.
  since mid-004;
• Installation density: 0,87 kWp/1 000 habitants; No. 6 in    Key industry data
  Europe                                                      • National cell production capacity: 150 MWp in 004
• Growth perspectives: forecasts range from 30 MWp              (95 MWp in 003, + 58 %);
  (Worst Case) to 300 MWp (Best Case) p.a. – the political    • National module production capacity: n.k.
  target is 60 MWp p.a. (58,5 MWp grid-connected).            • Annual sales of the national PV industry: n.k.
                                                              • Annual investments of PV industry: € 4, Mio. in 004
Market structure                                                (19,6 in 1999–004);
• Market segmentation: 6 % grid-connected, 38% off-          • Employment in PV industry: 5.58 in 004 (4.00 in
  grid; market share of the grid-connected segment              003, + 38 %);
  raising sharply; projects are realised on open ground       • PV module prices: ,75–3,5 €/Wp (004)
  rather than roof-tops as in Germany;                        • PV system prices: 5–7 €/Wp (004)
• Project sizes: Spain so far has been a “0 kWp” market
  now developing in a “100 kWp” market; the innovative        PV policy strategy and regulatory framework
  “huertas solares” concept enables MW projects by            (overview)
  grouping a large number of “100 kWp” plants together;
  in addition, there are already various megawatt plants      National strategy and framework for PV promotion
  with demonstration character;                               • National PV targets: the national promotion plan (PFER)
• Regional distribution: Spain is a highly federal country,     of the Spanish government defines very clear targets
  so market development is very diverse across the              for PV: 135 MWp total capacity until 010; requiring €
  country, depending on regional policies and support           1 Mio. total investment; this target is broken down to
  schemes; in the future, natural conditions (solar             regional as well as annual targets and neatly controlled
  radiation) will be the main driver; Navarra has been          by national authorities;


 5    PV Policy Group – European Best Practice Report
• National PV strategy/plan: Spain follows a clear political   • Tendering system: none;
  strategy to which the policy framework has been              • Quota obligation system: none;
  aligned; key elements of the regulatory framework is         • Green pricing systems: not known.
  a feed-in-tariff system combined with soft loans and
  direct subsidies granted by the national energy agency       Electricity sector regulations relevant for the PV market
  IDAE and regional counterparts;                              • Plant authorisation: procedures are clearly defined
• National PV administration: PV policy as outlined in            in Electricity and Renewables Act RD 436/004; in
  the national promotion plan is co-ordinated by the              charge of authorisation procedures for electricity
  Ministry for Industry and Energy which has assigned             producers and final commissioning permission are the
  operational management functions to IDAE; initiatives           respective authorities of the Autonomous Region; they
  on the national, regional and local levels are co-              also facilitate the centralised registration under the
  ordinated by so-called Consultative Committees.                 “special regime”;
                                                               • National grid access code: PV installations > 100 kWp
National PV incentive systems:                                    (medium/high voltage grid) are regulated by different
• Feed-in-tariff system: key instrument is the “special           grid access code than installations < 100 kWp (low
  regime” offering specific feed-in-tariffs for RES               voltage grid);
  producers including PV; the feed-in-tariff system has        • Sector regulation: ensured by national regulator CNE;
  been amended in 004 with publication of the RD              • National plant register: very transparent register for all
  436/004;                                                       installations under the “special regime” (REPE) in place
• Investment support schemes: additional support can              since 004 and is accessible for the general public on
  be obtained by means of a centralised funding scheme            DGPEM website.
  called “financing line ICO-IDAE” which combines soft
  loans with direct subsidies granted by IDAE; in addition,    Building sector regulations relevant for the PV market
  all autonomous regions and various municipalities offer      • Building standards: the new technical building code
  subsidies, although most have been cut down following          (CTE, due in 005) defines energy efficiency standards
  the amendment of the feed-in-tariff system to avoid            for new or refurbished buildings; it is expected that for
  “over-subsiding” of the market;                                the first time PV installations are acknowledged to
• Fiscal incentives: exist, but are of minor importance in       meet these standards;
  comparison to the aforementioned instruments;


                                         B. Country Analysis – assessment of 1 national PV policy frameworks         53
• Solar building obligations: Spain has been the first          PV support schemes: financing line ICO-IDAE
  country to implement solar building obligations on
  municipal levels (“Barcelona model”); PV market are           General characteristics of support schemes
  indirectly capitalising on these > 50 “ordenanzas             • Type of system: current programme is a merger of two
  solares” that have been implemented in the meantime;            different instruments: soft loans of public promotion
• Regulations for building-integrated PV: no specific             bank ICO and direct subsidies of IDAE; not exclusively
  regulations for BIPV.                                           PV, but solar energy clearly the focus;
                                                                • Administration: IDAE; applications decentralised via
PV industry regulations relevant for the PV market                house bank;
• Quality standards for PV products: international/             • Starting/expiry date: programme in place since 1999,
  European quality standards (IEC) for PV products and            current line since 003; generally no expiry date of
  installations have to be complied with;                         support scheme, but annual re-definition of budgets
• Quality standards for PV installations: specific national       and conditions; PER foresees no direct subsidy in
  regulations regarding safety standards of installations;        006;
• Quality standards for PV installers: have to comply           • Targets: no specific target defined, only implicitly by
  with the general standards of electricians; specific            annual budgets allocated and granted by IDAE;
  qualification labels for “solar installers” are voluntary     • Total budget: € 189,6 Mio in 004 (39,6 direct subsidies
  so far.                                                         by IDAE);
                                                                • Funding: federal budget managed by IDAE;
Key PV legislation: RD 436/2004
                                                                Contents and conditions of the support scheme
General characteristics of legislation                          • Beneficiaries: 1. private individuals, . corporations;
• Type of system: feed-in-tariff system, offering two             financed are grid-connected PV systems;
  general options for PV operators to choose between: 1.        • Type of support: combined loan and direct subsidy
  fixed feed-in-tariff and participation in regulated market      (grant) covering up to 80 % of investment cost;
  or . fixed premium on variable electricity price and         • Level of support: max. 7.000 €/kWp per plant; max. €
  participation in liberalised market; installations < 100        0,6 Mio. per investor and year. Only 1 PV system per
  kWp are tied to option 1; feed-in-tariffs are re-defined        investor.
  on an annual basis and oriented at an overall reference
  price (TMR); for instance PV tariff 575 % of TMR over         PV monitoring systems
  5 years, 460 % afterwards;
• Starting / expiry date: current system in place since         National approach to PV market monitoring
  004; no expiry date, but regular revision, the first at      • General approach: survey
  006, and afterwards every 4 years. Revision takes            • Institutions in charge: IDAE
  effects after  years. Another revision will be made          • Data collection & processing: IDAE, CNE
  when the market have 400 MWp installed (PER 005-             • Data dissemination: annual reports and publications by
  010);                                                          IDAE and ASIF (download on website).
• Long-term legal security of system: limited, since feed-
  in-tariffs can be modified or even suspended by simple        National approach to performance measurement of PV
  royal decree. However, a new royal decree never can           policy framework
  be retroactive.                                               • Very systematic approach to measure achievement of
                                                                   PFER under co-ordination of IDAE; there is a PFER
Contents and conditions of the legislation                         monitoring project in collaboration with regional
• Beneficiaries: all operators of RES installations                authorities centred around a computer database
  < 50 MW;                                                         (BDFER) in which all projects are entered; the BDFER
• Feed-in-tariffs: 41,44 €ct/kWh (< 100 kWp) – 1,99               database is in place since 000 and not accessible to
  €ct/kWh (> 100 kWp) in 005;                                     the general public;
• Decrease mechanism: reduction of tariff after 5              • Data collection & processing: decentralised online
  years;                                                           entering of data by project partners in BDFER
• Guarantee period: indefinite (operational lifetime of            database that works like a modern MIS (management
  plant) – maximum legal security for investors;                   information system) so customised queries can be
• Financing model: centralised compensation scheme:                defined by users;
  surplus cost for feed-in-tariffs are charged by electricity   • Data dissemination: regular reports and publications
  suppliers to final consumers;                                    by IDAE.
• Average payback period of PV investments (under
  given conditions): 8–1 years.




 54    PV Policy Group – European Best Practice Report
10.2 Conclusions from country analysis                             use from renewable sources by 010. In PV area, PER
                                                                   identifies a new target for an increase in photovoltaic
General assessment of performance                                  potential of 363 MWp, over the period 005–010
• Market development: ICO-IDAE financing line is seen              within the overall renewable energy plans, assuming
  as a great success; in 003 + 004 1 39 projects (7,5          the measures proposed in it are implemented. The new
  MWp) + 3 879 projects (30 MWp) were approved;                    goal is 400 MWp installed.
• Industry development: Strong PV industry even                  • The proposed measures are aimed at overcoming the
  before the national market boom started in 004;                 economic, technological, regulatory and social barriers
  Sector continuously growing, with new manufacturers,             that have been identified. The principals measures
  installers.                                                      are:
• Cost reduction: Due to limited competition not yet the           – Maintenance of premiums established by RD
  same reduction effects as for instance in Germany,                  436/004.
  but expected in the coming years (influx of foreign              – Approval of Technical Building Code (CTE).
  competitors is a key driver); price levels for PV systems      • Solar building obligations and building standards (CTE)
  still clearly above German levels.                               will promote a bigger development for solar sector.
• PV acceptance: PV in 005 start to be interesting for
  the general public; Invertors with motivations merely
  financial put their eyes on solar sector, due to the
  availability of public support; as a result investors
  are all commercially driven (e.g. wealthy individuals,
  entrepreneurs).

Strengths of national PV policy framework
• Excellent conditions: specific solar yields + feed-in-tariff
   + loans up to 80 % extremely attractive for investors in
   005 (ICO-IDAE); Direct subsidies up to 0 % in 005
   (Grid connected systems) 30 % (isolated systems) +
   regional subsidies.
• Very consistent PV strategy: clearly defined targets,
   ambitious promotion plan, well-conceived mix of
   instruments; full commitment of relevant authorities on
   federal and regional level
• Advanced approach to market monitoring and policy
   performance measurement.

Weaknesses national PV policy framework
• Limited budget led to suspension of the whole ICO-
  IDAE programme in summer 004 – bringing the
  exploded market to a sudden halt;
• Bureaucratic application procedures for grants (esp. on
  regional level);
• Most focus of investors on subsidies/public aid; It is
  coming funds of financial sector (banks etc.) In 005,
  there are some private funding models (commercial
  bank credits, project financing etc.);
• Cap limiting large-scale megawatt parks;

Lessons learned
• Subsidies will be abolished in 006 (for grid connected
  systems), as the feed-in tariffs are enough for the
  adequate development of the market.
• Maintenance of premiums establishes by RD 436/004.
  Next revision of premiums in 010 or when the market
  gets 400 MW of power installed.
• Administrative procedure simple is basic for achieving
  a good development of PV solar sector.

Outlook
• The Spanish Renewable Energy Plan (PER) 005–
  010 represents a revision of the Spanish Promotion
  Plan for Renewable Energy 000–010, in force up
  until now. The aim of PER 005–010 is to maintain
  the commitment to meet at least 1 % of total energy


                                           B. Country Analysis – assessment of 1 national PV policy frameworks      55
11. Sweden                                                     PV industry

11.1 Country profile                                           PV industry structure and development
                                                               • Silicon/wafer/cell production: none; presently all wafer
PV market                                                        and cells are imported from Norway and Germany
                                                               • Module production: There are 4 companies in Sweden
Natural conditions                                               that assemble modules: Gällivare Photovoltaic AB,
• Solar radiation: n.a.                                          ArcticSolar AB, ScanModule AB and PV Enterprise
• Specific energy yield of PV plants: ranges from 650 to         Sweden AB. Together these manufacturers produce
  850 kWh/kWp on average.                                        on average more than 0MW annually of mostly poly-
                                                                 si, most of which (95 %) is delivered to the German
Market background and history                                    market.
• Historic development: The use of solar photovoltaics         • PV component production: none
  in Sweden was initiated through off-grid industrial
  applications in the late 1970’s. Since then the off-         Key industry data
  grid domestic sector, predominately small stand-             • National cell production capacity: none
  alone systems for remote country houses for                  • National module production capacity: 49 MW in 004
  summer vacationers, has become the largest user              • Annual sales of the national PV industry: € 6,9 Mio. in
  of photovoltaics. Today this sector constitutes 80 %           003
  of the PV market. The grid-connect sector has been           • Annual investments of PV industry: € 1,81 Mio. in
  slow to develop. During the 1990’s to present day this         003
  sector has seen 7 sporadic demonstration projects           • Employment in PV industry: 155 in 003
  usually involving commercial, utility or public buildings.   • Average PV module prices: n.k.
  There is presently no domestic grid-connect market in        • Average PV system prices: n.k.
  Sweden.
• Current trends: Until now, there have been no general        PV policy strategy and regulatory framework
  subsidies aimed directly at promoting PV in Sweden.          (overview)
  Beginning in 005, there will be a subsidy for PV
  on public buildings. Policies, which could indirectly        National strategy and framework for PV promotion
  promote PV, are taxes and fees related to conventional       • National PV targets: no specific target for PV; Increase
  electricity production and a market based renewable            renewable electricity share by 10 TWh between
  energy certificate scheme, which was launched in               00 and 010 (from 7.4 % to 16.9 % of electricity
  003.                                                          consumption)
• PV image/acceptance: Little interest in PV among in-         • National PV strategy/plan: Renewable Energy
  vestors due to a lack of subsidies for PV projects. How-       Certificates Scheme; Investment subsidy programme
  ever, since PV is recognized as a sustainable energy           for public buildings
  technology, the attitude among the public is positive        • National PV administration: STEM is Sweden’s National
  and has been expressed in form of increased consu-             Energy Agency (the energy authority and primary
  mer demand for renewable electricity and PV power.             funding agency). During 005 it will assess the current
                                                                 status of Swedish and International PV technology
Market size and growth                                           developments, together with results from the new
• Annual installed capacity: + 0,85 MWp in 004 (+              70 % investment subsidy for public buildings. This will
  0,84 MWp in 003); Nr. 11 in Europe                           inform future policy directions. SolEl is presently the
• Total installed capacity: 3,866 MWp in 004 (3,581 MWp         national PV programme (coordinated by Elforsk AB)
  in 003); Nr. 10 in Europe                                     for the application and demonstration of PV, with some
• Annual growth rate: + 7 % in 004 (+ 9 % in 003)              research into building integrated applications. However,
• Installation density: 0,43 kWp/1.000 habitants; Nr. 9 in       it is not a direct market development instrument.
  Europe                                                         Svenska Kraftnät is the National Grid operator.
• Growth perspectives: The market growth for PV                  Along with STEM, these two agencies coordinate the
  continued to be fairly slow with about 7 % in 004.            electricity certificates scheme. Approved renewable
                                                                 energy generators must be registered with STEM, and
Market structure                                                 certificates are created and registered with Svenska
• Market segmentation: 5 % grid-connected, 95 % off-             Kraftnät.
  grid;
• Project sizes: The average project size is clearly below     National PV incentive systems:
  10 kWp, with only a few exceptions.                          • Feed-in-tariff system: Presently there are no feed-in-
• Regional distribution: n.a.                                    tariffs specific for PV installations.
                                                               • Investment support schemes: Support for investment in
Administrative processes:                                        energy efficiency and conversion to renewable energy
• Complexity of planning process: n.k.                           sources (including PV) in public buildings.
• Number of permissions required: n.k.                         • Fiscal incentives: The legislation mentioned above
• Number of authorities involved: n.k.                           provides the subsidy in the form of a credit paid into to
• Duration of planning process: n.k.                             applicants tax account.


 56    PV Policy Group – European Best Practice Report
• Tendering systems: none                                    Building sector regulations relevant for the PV market
• Quota obligations systems: The electricity certificates    • Building standards: n.k.
  scheme; 8,1 % renewable energies of total electricity      • Solar building obligations: n.k.
  consumption in 004                                        • Regulations for building-integrated PV: n.k.
• Green pricing models: Apart from the cost of electricity
  certificate quota compliance, which is passed on to        PV industry regulations relevant for the PV market
  the consumer as a price mark-up, energy retailers          • Quality standards for PV products: n.k.
  can market green power under the “Bra Miljö” label.        • Quality standards for PV installations: Standards and
  Electricity can also be sold as EPD (Environmental           codes, which apply specifically to PV installations in
  Product Declaration) certified according to the ISO          Sweden, follow the applicable European standards
  14005 standard.                                             (CENELEC or IEC). Any work on electrical installation
                                                               must comply with the Swedish electrical safety
Electricity sector regulations relevant for the PV market      regulations.
• Electricity plant authorisation: There is a significant    • Quality standards for PV installers: n.k.
   metering and reporting charge which PV installations
   may be required to pay – regardless of their size – to    Key PV legislation: Electricity Certificates Scheme
   the local network owner or other third-party when they
   export power.                                             General characteristics of legislation
• Grid access code: There are no specific standards or       • Type of system: Certificate scheme
   codes for the connection of PV systems to the national    • Start/expiry date: 003 to 010
   grid, but the general regulations for electric power      • Targets of legislation: The scheme intends to promote
   installations should be followed as far as possible.        electricity generated from renewable energy sources
   However, in order to be eligible to create electricity      like biomass, wind, small-scale hydro, and PV. In
   certificates, the installation must comply with the law     004, the consumers were required to buy certificates
   regarding electricity certificates in addition to any       corresponding to 8,1 % of their consumption.
   STEM regulations.                                         • Long-terms legal security: n.k.
• Sector regulation: n.k.
• National plant register: n.k.




                                        B. Country Analysis – assessment of 1 national PV policy frameworks      57
Contents and conditions of the legislation                   National approach to performance measurement of PV
• The certificate scheme is a market-based mechanism,        policy framework
  which is intended to promote electricity generated         • General approach: Presently the performance of all
  from renewable energy sources. For every MWh                  grid-connected PV systems in Sweden is monitored by
  of renewable electricity that an electricity company          the national SolEl program through the interactive web
  produces it receives one certificate. The electricity         site www.solcell.nu.
  consumers are then required to buy certificates in         • Data collection & processing: n.k.
  proportion to the amount of electricity they consume.      • Data dissemination: n.k.
  The certificates can then be traded on the open market.
  In 004, the consumers were required to buy certificates
  corresponding to 8,1 % of their consumption, which
  resulted in a market price of about 5 EUR per MWh.        11.2 Conclusions from country analysis
  The Swedish certificates can be exported to RECS,
  the European Renewable Energy Certificate System,          General assessment of performance
  but the RECS certificates cannot be imported to the        • Market development: The annual growth rate is
  Swedish certificate system.                                  expected to increase from 005 on to 007 (3 % in
• The scheme makes no distinction between technologies,        007) due to the introduction of 70 % subsidies for
  with the effect that cheaper technologies will tend to       BIPV on Public Buildings which started in May 005,
  be the major beneficiaries. Biofuel-fired generation         and runs until December 007.
  presently accounts for around 75 % of elcertificates       • Industry development: The four module manufacturers
  traded, while hydro and wind power account for 18 and        are steadily increasing their production capacity. But
  8% respectively. Obviously, PV is almost irrelevant in       the home market is too small for the development of a
  the frame of this scheme.                                    self-sustaining PV industry.
• Financing model: n.k.                                      • Cost reduction: Annual sales are too small to make a
• Economic cost: n.k.                                          reliable statement.
                                                             • PV acceptance: Positive attitude among the public.
Key PV support schemes: “Investment subsidies
for PV on public buildings”                                  Strengths of national PV policy framework
                                                             • n.k.
General characteristics of support schemes
• Type of system: Investment subsidy in form of tax          Weaknesses national PV policy framework
  deduction for grid-connected PV installations on public    • The metering and reporting cost can be prohibitive for
  buildings, for example sport halls, libraries, schools       smaller PV installations.
  etc.                                                       • The Certificate scheme is technology-neutral. This has
• Start/expiry date: May 005/December 007                    meant that thus far it has encouraged the development
• Administration: STEM; Applications will be evaluated         of the least cost, nearest market renewable energy
  by local county administrative boards and the National       technology, which unfortunately is not PV.
  Board of Housing, Building and Planning.                   • The time-horizon of the Certificate Scheme should
• Targets of programme: Promotion for PV and                   be longer considering that significant investments are
  Renewable Energies in general.                               involved.
• Total budget: SEK 100 Mio.
• Funding: up to 70 %                                        Lessons learned
                                                             • The Swedish Government has indicated an interest
Contents and conditions of the support schemes                 for the subsidy scheme to be extended to include the
• Beneficiaries: buildings for public use                      domestic grid-connect sector, although this is presently
• Type of support: see above                                   uncertain. It depends on this decision, whether the
• Level of support: For PV the subsidy will be 70 % of the     growth rate will collapse again after 007 or not.
  total installation cost – including materials and work
  – up to 5 Mio. SEK maximum per building.
• The total allocated funds of SEK 100 million
  approximately correspond to a total installed capacity
  of around  MWp.

PV monitoring systems

National approach to PV market monitoring
• General approach: n.k.
• Institutions in charge: n.k.
• Data collection & processing: n.k.
• Data dissemination: n.k.




 58    PV Policy Group – European Best Practice Report
12. UK                                                          are eligible for funding. Almost 90 % of installations are
                                                                between 0,5 and 5 kWp.
12.1 Country profile                                          • Regional distribution: PV installations in the UK are
                                                                concentrated on the following regions: East, South
PV market                                                       East, South West and London.

Natural conditions                                            Administrative processes:
• Solar radiation: n.k.                                       • Complexity of planning process: Planning procedures
• Specific energy yield of PV plants: ranges from 750 to        for smaller-scale PV installations (5 kWp) are fairly
  950 kWh/kWp on average.                                       straightforward: After choosing an accredited installer,
                                                                he will help to complete the grant application. The
Market background and history                                   installer also issues the commissioning certificate and
• Historic development: Until the mid-90s PV technology         advises the Distribution Network Operator that a new
  was used exclusively for small, isolated applications         PV system is being installed.
  (e.g. remote homes and professional installations).         • Number of permissions required: for small projects
  Expansion of the market for grid-connected PV started         at least 3 permissions are required (commissioning
  in 1993 with industry studies and early demonstration         certificate, grid connection, buy-back scheme or
  projects. Nevertheless, real growth started in 00 with      authorisation as independent energy generator);
  the introduction of two small field trial programmes of       Planning permission is normally not required.
  monitored installations and the Major Demonstration         • Number of authorities involved: Energy Saving Trust
  Programme (MDP) which offers capital grant.                   (if you apply for a grant), installer, grid operator/utility,
• Current trends: The major market is for PV on buildings       Gas and Electricity Markets Authority (if you want to
  supported by the MDP, which is due to end in early            register as independent energy generator)
  006. The follow on programme will also be grant-based      • Duration of planning process: For small systems a
  but it is proposed to cover all renewable technologies        few weeks are required to obtain the grant, other
  in one scheme and the level of funding is unknown.            permissions can be accomplished within the delivery
  The industry fears that growth will stall.                    and installation period. Large systems take two to three
• PV image/acceptance: Limited awareness of PV among            months to get grant approval.
  the general public. PV is still seen as to expensive for
  homeowners. The Department of Trade and Industry            PV industry
  (DTI) launched the “It’s only Natural” campaign during
  004, which aims to promote renewables and to               PV industry structure and development
  provide information on the subject to planners, local       • Silicon and wafer production: Crystalox produces multi-
  councillors and the general public. (IEA PVPS National        crystalline silicon ingots. Its total production in 004
  Survey Report UK 004)                                        was sufficient for 170 MW of cells. Ingots are exported
                                                                mainly to Japan and also to Germany, where they are
Market size and growth                                          wafered by PV Silicon, a sister company. Crystalox
• Annual installed capacity: + ,61 MWp in 004 (+             employs 9 staff and is the UK’s largest employer in
  1,767 MWp in 003); Nr. 7 in Europe                           the PV sector.
• Total installed capacity: 8,164 MWp in 004 (5,903 MWp      • Cell and module production: ICP UK manufactures
  in 003); Nr. 8 in Europe                                     thin-film amorphous silicon cells and modules and its
• Annual growth rate: + 8 % in 004 (+ 7 % in 003)           production decreased from ,5 MW in 003 to 1,5 MW
• Installation density: 0,14 kWp/1.000 habitants; Nr. 11 in     in 004. The company plans to move production
  Europe                                                        to India. July 004 saw the opening of Sharp's new
• Growth perspectives: Under the assumption that                0 MW capacity PV module manufacturing facility
  the Major Demonstration Programme is followed by              in Wrexham (which already expanded to 40 MW)
  a significant programme of continuing support and             and Romag, a specialist glass manufacturer started
  increased public awareness, 50 MW of installed PV             production at its new 6 MW lamination facility in
  (cumulative) can be projected. Even 100 MW might              Consett, County Durham. Its facility uses BP Solar PV
  be achieved if other barriers are removed and more            cells in the manufacture of semi transparent crystalline
  systems included in new build. Without an effective           PV laminate.
  follow up programme to encourage the market, 5 MW          • PV component production: There are several smaller
  are realistic.                                                component manufacturers producing inverters, storage
                                                                batteries, battery charge controllers etc.
Market structure
• Market segmentation: 90 % grid-connected, 10 %              Key industry data
  off-grid. After the implementation of the Major             • National cell production capacity: n.k.
  Demonstration Programme, UK became almost a pure            • National module production capacity: 49,5 MW by the
  on-grid market; the share of the off-grid segment will        end of 004 (IEA PVPS National Survey Report UK
  shrink further in the future.                                 004)
• Project sizes: Within the Major PV Demonstration            • Annual sales of the national PV industry: GBP 78 Mio.
  Programme, PV systems in the range of 0,5 to 100 kWp          in 004 (IEA PVPS National Survey Report UK 004)



                                         B. Country Analysis – assessment of 1 national PV policy frameworks           59
• Annual investments of PV industry: n.k.                         Act to connect small and medium sized distributed
• Employment in PV industry: 38 in 004; 580 when                generation providing the electricity network operator
  R&D, distributors, installers etc. are included                 has no technical objection. The regulations for internal
• Average PV module prices: 3,4 €/Wp                              wiring of buildings include some special cases that
• Average PV system prices: 7,4–6,8 €/Wp                          include PV.
                                                                • Grid access code: G 83/1 ‘Recommendations for
PV policy strategy and regulatory framework                       connection of small-scale embedded generators (up
(overview)                                                        to 16 A per phase) in parallel with public low voltage
                                                                  distribution networks’ was issued in September 003.
National strategy and framework for PV promotion                  It addresses the network requirements of all distributed
• National PV targets: No specific target for PV, but for         micro-generators, including PV, complemented by
  the overall RES share in electricity production: 10 % by        a series of annexes focusing on technology-specific
  010 and 0 % by 00.                                          issues.
• National PV strategy/plan: Quota system (Renewable            • Sector regulation: n.k.
  Obligation) combined with a subsidy programme (Major          • National plant register: n.k.
  Demonstration Programme). PV is seen as a very
  small part of the overall RES strategy, held back by          Building sector regulations relevant for the PV market
  the government perception that PV can only contribute         • Building standards: Presently most authorities accept
  effectively after 00 and then in a small way.                 PV status as a new technology but there are delays
• National PV administration: The Department of Trade             and confusion caused by lack of suitable standards and
  & Industry (DTI) is the lead Department on matters of           codes as well as lack of knowledge by the authorities
  UK energy policy. The implementation of UK energy               and building control officers. Some authorities insist
  policy is delivered by a Sustainable Energy Policy              on special tests, the main concerns are for fire, water
  Network, which includes representatives from the                penetration and wind resistance.
  DTI, the Department of Environment, Food and Rural            • Solar building obligations: An increasing number of
  Affairs, the Office of the Deputy Prime Minister and the        local development control authorities are now requiring
  Department of Transport. The PV Major Demonstration             developers of multiple homes or large buildings to
  Programme of the DTI is coordinated and administered            consider renewables as one method of reducing
  by the Non-Profit Organisation Energy Saving Trust.             carbon emissions.
                                                                • Regulations for building-integrated PV: No specific
National PV incentive systems:                                    regulations.
• Feed-in-tariff system: There is no actual feed-in-tariff
  in place but a number of electricity utilities offer to pay   PV industry regulations relevant for the PV market
  for exported electricity from a PV system in the range        • Quality standards for PV products: International/
  of 0,05–0,075 GBP/kWh. However, these schemes are               European quality standards (IEC) for PV products and
  voluntary and subject to uncertainty.                           installations have to be complied with; ER G83/1 Grid
• Investment support schemes: PV Major Demonstration              connection requirement and type test for inverters is
  Programme from 00–006 (see below); Domestic                  the key UK “special”.
  PV Field Trials from 000–003: The DFT aimed to              • Quality standards for PV installations: see above
  use the design, construction and monitoring of the            • Quality standards for PV installers: Under the MDP
  installations as a learning opportunity for utilities,          programme the installers are required to be accredited
  building developers and other key players. A total of           for technical competence, provision of customer
  660 kW was installed by the end of 003; Large Scale            service and product warranties.
  Building-Integrated PV Trial started in 001: funding
  has been made available for 18 projects totalling             Key PV legislation: The Renewables Obligations
  almost 1,15 MW on public buildings but only 1 have           Order 2002
  been constructed with 597 kW.
• Fiscal incentives: VAT for PV systems, which are              General characteristics of legislation
  installed by accredited installers, is reduced to 5 %         • Type of system: Quota system
  instead of 17,5 %.                                            • Start / expiry date: April 00 to 07
• Tendering systems: none                                       • Targets of legislation: The primary importance is to
• Quota obligations systems: The Renewables Obligation            stimulate the take up of renewable generation to reach
  (RO) began in 00 and sets out targets for electricity         10 % of electricity sold by 010 and 0 % by 00.
  suppliers to source an increasing amount of their             • Long-terms legal security: All political parties have
  electricity from renewable resources. Renewable                 agreed the principal that the obligation has to remain
  Obligation Certificates, or ROCs, are awarded to                until 07 with only essential change in order to ensure
  suppliers using renewable sources. ROCs can be                  that confidence is retained by the capital markets.
  traded between suppliers to make up any shortfall.
• Green pricing models: n.k.                                    Contents and conditions of the legislation
                                                                • The Renewables Obligations Order require all licensed
Electricity sector regulations relevant for the PV market         electricity suppliers in Great Britain to provide the
• Electricity plant authorisation: There is a high degree         Gas and Electricity Markets Authority (Ofgem)
   of freedom under the Electricity Act and the Utilities         with certificates, issued under one of the orders,


 60    PV Policy Group – European Best Practice Report
  demonstrating the supply of a specified and growing             authorities, health trusts, schools, voluntary, charitable
  proportion of renewables electricity to customers. As           organisations and community groups
  an alternative to providing these certificates, suppliers   •   Type of support: grants
  can make a “buy-out” payment to Ofgem for all or any        •   Level of support: 50 % of total eligible costs for Stream
  part of that percentage which is not covered by the             1, between 40 and 55 % of the total eligible costs for
  presentation of certificates or they can combine the            Stream . Also, maximum grant levels have been
  two options.                                                    defined for Stream 1.
• Financing model: The scheme is ultimately financed          •   Halcrow, sub-contractor to EST, is responsible for site
  by the consumer through higher electricity prices               inspections and provision of technical assessment and
  and is cost neutral to the Treasury. The Obligation             guidance.
  certificates are purchased and sold by electricity supply   •   After two years, 4,9 MW of PV has been approved.
  companies.
• Economic cost: n.k.                                         PV monitoring systems

PV support schemes: The Major Photovoltaic                    National approach to PV market monitoring
Demonstration Programme                                       • General approach: National survey of the IEA PVPS
                                                                programme.
General characteristics of support schemes                    • Institutions in charge: IT Power under contract to the
• Type of system: grant for on- and off-grid PV                 DTI
  applications                                                • Data collection & processing: Mainly carried out by
• Start/expiry date: April 00/March 006                      telephone and email survey to all known actors.
• Administration: EST – Energy Saving Trust                   • Data dissemination: Annual report is published on the
• Targets of programme: The programme aims at                   UK PVPS website (www.iea-pvpsuk.org.uk/).
  creating a competitive and sustainable market for PV
  in the UK, which shall lead to high quality installations
  and cost reduction. The awareness of the customers          National approach to performance measurement of PV
  for PV shall be raised.                                     policy framework
• Total budget: GBP 31 Mio., approximately 11 Mio. for        • General approach: Only within the Major PV
  Stream 1 (0,5–5 kWp) and 0 Mio. for Stream  (5–100           Dissemination Programme EST collects data on PV
  kWp)                                                           costs, take up of the scheme and barriers identified
• Funding: Department of Trade and Industry (DTI)                which is published in limited form in the annual project
                                                                 report.
Contents and conditions of the support schemes                • Data collection & processing: n.a.
• Beneficiaries: Target audience for Stream 1 (0,5–5          • Data dissemination: Annual project report
  kWP): individual homeowners, SMEs, Public sector
  organisations, social housing groups, voluntary,
  charitable organisations and community groups. Target
  audience for Stream  (5–100 kWp): large commercial
  organisations, SMEs, social housing groups, local


                                         B. Country Analysis – assessment of 1 national PV policy frameworks          61
12.2 Conclusions from country analysis

General assessment of performance
• Market development: The development of PV depends
  heavily on the Major Demonstration Programme and
  whether it is followed by a significant programme of
  continuing support.
• Industry development: UK PV industry is set to grow in
  005, following the opening of two new manufacturing
  facilities by Sharp and Romag during 004.
• Cost reduction: n.a.
• PV acceptance: Limited awareness of PV among the
  general public and investors.

Strengths of national PV policy framework
• The Renewables Obligation is committed to 07 to
   give confidence to industry and its investors.
• A strength of the MDP is the requirement for installers
   to be accredited for competence and offer a minimum
   warranty of two years on the complete system. This is
   backed up by the inspection process.

Weaknesses national PV policy framework
• The Renewables Obligation is complex in design,
  administration and enforcement.
• A quota system favours large plants and is less suited
  for small investors.
• The MDP is only applicable to a system size of
  100 kWp.
• The MDP is limited to March 006.

Lessons learned
• The Renewables Obligation is a technology-neutral
  support mechanism. This has meant that thus far it has
  encouraged the development of the least cost, nearest
  market renewable energy technology, but has not thus
  far incentivised the longer-term technologies that are
  presently more expensive such as PV.

Outlook
• Further installations under the Major Demonstration
  Programme will facilitate a continued healthy rate of
  grid-connected PV installation until 007. The current
  programme is due to end in March 006 and will be
  replaced by a new programme, which will support
  PV as well as other renewable energies suitable for
  building integration.
• PV is seen as a very small part of the overall strategy,
  held back by the government perception that PV can
  only contribute effectively after 00 and then in a
  small way.




 6    PV Policy Group – European Best Practice Report
C. BEnChmARk AnAlySIS –
ComPARISon of 12 nAtIonAl PV PolICy
fRAmEwoRkS


In the previous chapter, the PV policy frameworks and markets in 1 countries have been analysed independently from
each other. The benchmark analysis presented in this chapter tries to compare the respective PV policy frameworks
with regard to their overall effectiveness, but also to the efficiency of their implementation in practice. In different
assessment areas the policies of exceptionally well performing countries (“benchmarks”) are analysed in greater detail,
in order to draw conclusions for the countries lagging behind in these aspects.




                                     C. Benchmark Analysis – comparison of 1 national PV policy frameworks        63
1. Overview                                                   of a single legislation and/or support scheme. As a
                                                              result, the benchmark analysis follows a rather open and
It is obviously a difficult task to compare heterogeneous     qualitative approach (following the Delphi method), rather
national policy frameworks and to isolate the effects of      than comparing countries exclusively on the basis of
single support measures as there are a variety of factors     quantitative figures.
influencing the development of national PV markets. The       The overall idea of the benchmark analysis is to define a
national context is very different in each country, so are    number of assessment areas in which the 1 countries
the political goals that have led to the respective policy    should be compared separately. For each assessment
framework. Performance measurement of the various             area appropriate criteria have been defined to measure
framework approaches differ or lack clear definition          and compare the performance of the 1 countries.
by political decision-makers or programme managers.           The following figures illustrate the idea of the benchmark
Indicators cannot be simply be related to the performance     analysis as well as the overall assessment areas:


          Objective: to measure & compare the performance of national PV policy frameworks

               Input (= Efficiency)                                        Output (= Effectivness)

                                                                                              Market
       PV regulatory
                                                                                            Development
        framework

                                                                                              Industry
                                National                               National             Development
        PV support
                                PV Policy                             PV Sector
         schemes
                               Framework                             Development             PV Price
                                                                                            Development

       PV monitoring
                                                                                             PV Image &
         systems
                                                                                             Acceptance



Figure C1-1: Performance measurement of National PV policy frameworks

On the one hand, there is the national policy framework,      • National PV market development (esp. installed
for which this project a priori has defined three key           capacities);
assessment areas:                                             • National PV industry development (esp. revenues,
• PV regulatory measures (legislations, regulations,            investments, employment);
   standards, etc.);                                          • National PV price development (esp. price reductions);
• PV support schemes (subsidies, incentives etc.)             • National PV image & acceptance
• PV monitoring systems
                                                              After defining the assessment areas the following
These areas form the “toolbox” for politicians to implement   methodology was applied in the benchmark analysis:
their national PV promotion strategy and therefore            • Definition of relevant assessment areas (see above)
constitute key “input factors” to the system.                 • Definition of appropriate performance criteria
Obviously, the performance of countries in these                 (quantitative or qualitative) for each assessment area
assessment areas must not only be measured with               • Performance measurement for each country and
regard to their internal efficiency (e.g. economic cost,         assessment area/criterion (“scoring model”)
implementation in practice), but should naturally also        • Identification of benchmark country for each
reflect external effectiveness in terms of national PV           assessment area/criterion
sector development. For the benchmark analysis four           • Gap analysis between benchmark and the other
assessment areas were defined as most relevant “output           countries for each assessment area/criterion
factors” of the system:




 64    PV Policy Group – European Best Practice Report
    Methodology to measure and compare performance of 12 heterogeneous national policy frameworks
                                       (+ single instruments)

     1. Define              . Define              3. Measure           4. Identify            5. Analyse
    Assessment             Performance            performance          benchmarks            gaps to bench-
      Areas                  Criteria           (for each coun-       (No 1, for each        mark (for each
                                                 try & criterion        criterion)              country)



   e.g. PV support       e.g. Programme          e.g. Germany           e.g. Spain           e.g. Spain vs.
  schemes (invest-      efficiency: organi-       (HTDP Pro-           (Linea ICO–             Germany
  ment subsidies &       sation/manage-        gramme) “Stop &      IDAE): “good” pro-
      soft loans)       ment according to       Go” programme       gramme manage-
                        opinions of market      management in              ment
                               actors             001, 00



Figure C1-2: Methodology of Best Practice and Gap Analysis




                                  C. Benchmark Analysis – comparison of 1 national PV policy frameworks      65
2. Efficiency of National PV policy Framework

2.1 PV regulatory framework (legislation)

This assessment area covers the efficiency of the PV
regulatory framework. It is split up in four sub-areas:
• Ambition of political targets and consistency of PV
   strategy;
• Attractiveness of conditions for target groups;
• Economic cost of regulatory framework;
• Administrative implementation of regulatory frame--
   work.

The last three areas mainly refer to feed-in laws.

2.1.1 Ambition of political targets
and consistency of PV strategy
Political targets are a good indicator for the political
commitment, which is important to convey reliability to the
PV industry and investors.
Three performance criteria and indicators were defined
for this assessment area:
• Official PV target 010 (yes/no)
• Consistency of PV strategy / plan (measured by
   qualitative estimation)
• Consistency of PV policy (measured by qualitative
   estimation)

The consistency of the PV strategy and the policy
framework has been evaluated in a qualitative way, largely
based on overall expert opinions.

Performance measurement
Performance Official PV target 2010                              Consistency                Consistency
criterion                                                        of PV strategy/plan        of PV policy framework
Performance Yes / no                                             Qualitative estimation     Qualitative estimation
indicator
Austria     no                                                              ++                         ++
France           yes, indicative target of 1–50 MWp until 010               +                          +
Germany          no                                                         ++                        +++
Greece           no                                                          +                          +
Italy            yes, 100 MWp until 01                                     +                         ++
Japan            Yes, 4.80 MW in 010                                      +++                       +++
Netherlands      no                                                          +                         ++
Portugal         Yes, 150 MW in 010                                        ++                          +
Slovenia         no                                                          +                          +
Spain            Yes, 135 (new 400) MWp until 2010                          +++                       +++
Sweden           no                                                          +                          +
UK               no                                                          +                          +

         Nr. 1 (= Benchmark)

Benchmark definition                                          RD 436/004 lifted this threshold to 150 MWp. Given the
Spain can be considered a European benchmark for a            dynamic market development a further increase to 400
consistent PV strategy, oriented along clear political        MWp was announced in 005.
targets. An official target of the Spanish government was     The entire Spanish policy framework is aligned to the
already stated in the national Promotion Plan (PFER –         achievement of these targets and has been amended on
Plan de Fomento de las Energías Renovables) from 1999.        separate occasions since the actual market development
This plan envisaged an installed PV capacity of 144 MWp       was lagging behind. The framework combines the following
until 010 (135 MWp grid-connected). The new feed-in law      key instruments:


 66     PV Policy Group – European Best Practice Report
• Feed-in-law (“regimen especial”) – amended in 004              2.1.2 Attractiveness of conditions for target groups:
  with publication of the RD 436/004                             feed-in-tariff
• National subsidy scheme (“ICO-IDAE – línea de                   This chapter summarises the attractiveness of conditions
  financiación”) – amended various times, especially by           for target groups. As it is the most predominant regulatory
  merging ICO soft loan programme with IDAE grants to             instrument currently employed in Europe,, the following
  a uniform “financing line” for PV investors                     section will concentrate on the feed-in law. Attractiveness
• Specific administrative regulations for PV installations        refers to the characteristics of the feed-in laws: tariffs,
  (procedures for authorisation, grid access, registration        guaranteed periods and return on investments (ROI).
  of plants) – amended for installations > 0 kWp in              The target group encompasses all potential investors
  004                                                            in PV. Other regulations, such as tax reduction are not
                                                                  considered in this chapter.
Overall, the policy framework can be considered very              Three performance criteria were defined for this
transparent and aligned to the specific needs of the              assessment area:
sector.                                                           • Level of feed-in-tariff (measured by €/kWh and %
                                                                     decrease)
Differences between benchmark and other countries                 • Safety (guarantee period in years)
In most European countries a consistent strategy for the          • Specific energy yield and payback times of investments
promotion of PV is missing:                                          (kWh/kWp and years)
• PV is not considered a top priority for achieving
   energy and/or environmental political goals. In many           Further information on conditions for attractiveness of
   countries PV is still seen as a technology in research         feed-in tariffs will be further discussed and elaborated in
   & development phase and therefore neglected in                 the working group of the PV policy group project.
   economic politics. In most countries focus is placed on
   more competitive and “larger-scale” technologies such
   as hydropower, wind energy or biomass;
• PV has not reached the status to be considered a
   top priority for achieving industrial political goals
   by developing an important future industry – even
   attractive feed in tariffs often fail to achieve an impact
   when political caps block the development of an
   industry that requires critical mass of investments;
• In light of a uniform feed-in tariff for all RES, PV
   installations are not competitive and payback periods
   for investments are considered unattractive – only
   countries with a specific regime for PV have managed
   to trigger reasonable market development;
• PV promotion is undertaken by a patchwork of political
   initiatives rather than a coherent, long-term strategy
   –subsidy programmes are often tied to public budgets
   and thus lead to a negative perception in the general
   public (tax payers) or “stop & go” effects that block rather
   than foster the development of an embryonic market
   – in many cases programmes merely cease to exist
   and fail to provide sustainable impact in terms of PV
   acceptance, market or industry development – during
   government change-overs policies frequently tend
   to be amended without consideration for detrimental
   industry effects (e.g. Netherlands).

In Greece the utility (PPC-Public Power Corporation) is
obliged to provide grid access to power stations based
on renewable energy sources. This is provisioned by Act
No 44 of 1994 which also obliges the utility to buy all
energy produced by the renewable energy systems under
a 10 year contract, while retaining the exclusive right to
supply third parties with electricity.




                                        C. Benchmark Analysis – comparison of 1 national PV policy frameworks          67
Performance measurement
Performance Name / type of system                Attractiveness                Safety           Specific energy yield
criterion                                        (feed-in-tariff + decrease)   (guarantee       + payback time of
                                                                               period)          investments
Performance      Mix of instruments              €/kWh (%)                     years            kWh/kWp + years
indicator        (max. cap in MWp)
Austria          Feed-in-tariff + investment     60 €ct/kWh (< 0 kWp);        13               700–900
                 subsidies + fiscal incentives   47 €ct/kWh (> 0 kWp);                         13 years
                 (cap currently 15 MWp)          no decrease
France           Feed-in-tariff + investment     14,17 €ct/kWh (mainland       0               900–1.00 (mainland
                 subsidies + fiscal incentives   France); 8,34 € ct/kWh                        France) + 15–30 (to-
                 (cap currently 50 MWp)          (overseas); no decrease                        gether with different
                                                                                                regional grants)
Germany          Feed-in-tariff                  54,53 €ct/kWh (< 30 kWp);     20               750–950
(2005)           (no cap anymore);               51,87 €ct/kWh (30–                              + 8–12 years
                                                 100 kWp); 51,30 €ct/kWh
                                                 (> 100 kWp); bonus of
                                                 + 5 €ct/kWh for BIPV;
                                                 43,42 €ct for ground-
                                                 based PV;
                                                 decrease 5 % p.a.
Greece           Feed-in-tariff (amendment       8,17 €ct/kWh (for IPP); no    10               1.300–1.500
                 due in 005!) + investment      decrease                                       + approx. 5–30 years
                 subsidies; (no cap)                                                            for grid-connected
                                                                                                systems
Italy            Feed-in-tariff incl. net me-    approx. 61 €ct/kWh            0               1.100–1.500
                 tering & tendering system       (< 0 kWp); 50 €ct/kWh
                 (launch in 005!) + invest-     (0–50 kWp); competitive
                 ment subsidies + fiscal         procedure (> 50 kWp); de-
                 incentives (cap currently       crease  % p.a.
                 100 MWp)
Japan            Subsidies + fiscal incentives   –                             –                –
                 + Quota obligation
Netherlands      Feed-in-tariff + net metering   30–40 €ct/kWh (volatile)      10               700–800
                 system + fiscal incentives
                 (no cap)
Portugal         Feed-in-tariff + investment     5 €ct/kWh (< 5 kWp); valid for the first      n.k.
                 subsidies + fiscal incentives   35 €ct/kWh (> 5 kWp); 1 GWh pro-
                                                 no decrease           duced by each
                                                                       MW of installed
                                                                       capacity or for
                                                                       15 years
Slovenia         Feed-in-tariff + subsidy +  37 €ct/kWh (< 36 kWp),    FIT too low, to          1.000–1.100
                 soft loans                  6,5 €ct/kWh (> 36 kWp)    complicated              1–15 years
Spain            Feed-in-tariff + investment 41,44 €ct/kWh (< 100 kWp) infinite (maxi-          1.000–1.500 +
                 subsidies (cap currently    21,99 €ct/kWh (> 100 kWp) mum security
                 400 MWp)                    decrease after 25 years   for all investors)
Sweden           Quota obligation            –                         –                        –
UK               Subsidies + fiscal incentives –                               –                –
                 + Quota obligation


         Nr. 1 (= Benchmark)

Benchmark definition                                           PV installations on buildings for 005:
Benchmarks for a successful feed-in-tariff system that         1. 54,53 €ct/kWh (< 30 kWp)
combines attractive conditions and long-term security for      . 51,87 €ct/kWh (30 kWp to 100 kWp)
investors are Germany and Spain:                               3. 51,30 €ct/kWh (> 100 kWp)
In Germany, the feed-in-tariff for solar electricity is
differentiated according to the size and the location of the   Calculation example (for a 50 kWp plant):
installation:                                                  30 x 54,53 €ct + 0 x 51,87 €ct /50 = 53,47 €ct/kWh
                                                               Building-integrated installations: Bonus of + 5 €ct/kWh
                                                               Other PV installations, especially freestanding on the
                                                               ground: 43,4 €ct/kWh


 68     PV Policy Group – European Best Practice Report
Decrease: the feed-in-tariff is reduced by 5 % for plants on     high feed-in tariffs though the current maximum cap of
building installed in 006, by a further 5 % in 007 etc.; for   15 MW unnecessarily stifles market growth whilst the cap
installations on the ground the decrease is 6,5 % p.a.           on installed PV capacity has been removed in Germany.
The feed-in-tariff granted in the first year of operation        Removal of market caps contributes to the perception of
is guaranteed for 0 years. The period starts on the 1           long-term planning security for the PV industry. Most other
January of each year. Installations that are commissioned        countries have defined caps: 50 MWp in France, 400 MWp
e.g. in June, receive the remuneration over 0,5 years and       in Spain and currently 100 MWp in Italy (with an option to
so on.                                                           increase to 300 MWp).
The development of the German EEG and its key success            Whilst tariffs decrease by 5 % year-on-year in Germany,
factors have already been described in chapter 3.1               other countries(Austria, France, Spain) have not foreseen
National PV market development.                                  annual decrease or a lower rates such as in Italy ( %).
The combination of the two instruments HTDP and EEG              The German “sun-set” has two important effects: on the
has proved particularly effective in motivating ecologically     one hand, it fuels considerable growth in an early stage of
and socially motivated consumers. The advantage of               market development and will lead to considerable industry
the “two-pillar” support model is due to the fact that the       growth; on the other, the PV industry is forced to transfer
initial investment costs are by far the most dominant            reduced production costs to investors – prices for PV thus
factor in financing PV installations. As a result, a soft loan   have to be reduced if investments are to remain profitable
programme enabling the funding of up to 100 % of initial         at lower feed-in tariffs,.
investment costs, is a decisive leverage for any investor.       Finally, in Germany there is no upper limit for PV system
Unfortunately, the high number of subsidy requests lead          size to the feed-in-tariff system. This also enables large
to a “stop & go”, but the overall trend still indicated strong   solar parks to be installed. For example in Italy the limit of
PV market growth.                                                installation capacity is at 1 MWp.
On the other hand, even in the year 001 the soft loan           Austria had a very attractive system (besides the cap) in
under the HTDP programme led to specific electricity             terms of present net value and security for investors. The
production cost of 51–6 €ct/kWh(depending on the size           Austrian Green Electricity Act provided a rather powerful
of the installation). Given an average electricity price in      and effective instrument, especially in light of the growth
the liberalised energy market of ,4 €ct/kWh (in 00),          figures from 1997 to 004 (see C-1), during which feed-
there was still a financial gap of nearly 50 €ct/kWh to          in tariffs schemes were effective merely from 000 to
make PV electricity production profitable. The Renewable         004 (first on a county/municipal level, later on federal
Energy Law (EEG) introduced a higher feed-in-tariff for          level) which implies that that the support was even more
all investors in April 000. The EEG feed-in-tariffs were        effective during the years in which the system was in
50,6 €ct/kWh for PV plants installed during 000 to 001,        operation,.
and 48,1 or 45,7 Cent for plants installed from 00 to          Slovenia introduced the feed-in tariff system for all
003. The fact that the feed-in-tariff was guaranteed for        renewable energy sources and cogeneration plants
at least 0 years reassured investors of secure, long-           as early as 199. The experiences with this instrument
term cash flows that ensured a full payback of the initial       are positive, especially following the price increase for
investment in combination with the HTDP loans. However,          PV plants to 37 €ct/kWh in the beginning of 004. PV
the EEG and HTDP were not only complementary; there              applications have started to appear – in 005 new
were further synergies that contributed to overall market        capacities of 70 kW were connected to the electrical grid.
leverage. The guaranteed feed-in-tariff reduced the credit       With reference to installed capacities of 100 kW by the
risk of PV investments, which enticed commercial banks           end of 004, the cumulative increase in 005 was 70 %.
to offer 100 % financial coverage by means of the HTDP
loans (that are never given directly by the public KfW           2.1.3 Attractiveness of conditions for target groups:
bank, but via private banks). On the other hand, the public      tax incentives
soft loan programme led to the introduction of commercial        In this section different tax incentive schemes for target
credit offerings for PV projects by the banks themselves.        groups are compared. The target group contains all
This is an important issue as previously the technology          potential investors in PV.
had been virtually unknown, which in itself denied access        Three performance indicators were defined for this
to economically feasible financing (due to prohibitively         assessment:
high interest rate, security requirements, etc).                 • Attractiveness of tax measures (measured by €/kWh
Overall, the German PV Policy model turned out to be                and % decrease)
very successful – with exception of intermediary “stop &         • Consistency (expected duration and stability of the
go” effect caused by the HTDP programme (details later).            measure)
                                                                 • Accessibility of the measure (complexity of the process
Differences between benchmark and other countries                   of application)
Although feed-in tariffs have been introduced in a number
of other countries , their implementation has been far less      The rating of the different schemes was based on the
successful than in the German case. Several explanations         information provided by the national contact persons and
can be offered in this respect. Germany has the most             comparison by the authors.
generous feed-in tariffs on a national level compared
to other European PV markets such as Spain, Italy or
France. This is of major relevance to investors due to
expected payback time. Solely Austria has comparatively


                                       C. Benchmark Analysis – comparison of 1 national PV policy frameworks             69
Performance measurement
Performance Name / type of system                                  Attractiveness         Consistency         Accessibility
criterion
Performance (Mix of) instruments                                   €/kWh (%)              years               qualitative
indicator
Austria     tax credit of 10 % of any investment                   10 %                   n.n.                +
            above annual average
France      tax credit for private persons of 40 %                 40 %                   till 2009           +
            of PV investment
            14,1 % VAT reduction                                                                              ++
                  30 %–40 % tax deduction in overseas              10 %–0 % depending                        0
                  departments                                      on tax level
Germany           freedom in choice of year for tax                –                   under discussion       +
                  deduction of PV investment cost
Greece            –                                                n.a.                   n.a.                n.a.
Italy             10 % VAT reduction                               10 %                   n.n.                ++
                  36 % tax deduction for house owners and 1 %–18 %,                      n.n.                −
                  tenants                                 depending on tax
                                                          level
Japan             n.n.                                    n.n.                            n.n.                n.n.
Netherlands       no tax on investment profit                      7 %                   n.n.                0
                  44 % tax deduction for companies                 14 %                   n.n.                +
Portugal          30 % tax deduction for investments till          10 %–15 % depending    n.n.                +
                  € 78 for private persons                        on tax level
                  intermediate VAT rate (1 %)                     7%                     n.n.                ++
Slovenia          –                                                n.a.                   n.a.                n.a.
Spain             tax credit of 10 % of PV investment for          10 %                   n.n.                +
                  companies
                  50 % reduction of property taxes        property tax                    n.n.
                                                          dependent
Sweden            tax credit of 70 % of investment for PV 70 %                            until End of 2007 +
                  on public buildings
UK                1,5 % VAT reduction                    1,5%                           n.n.                ++

         Nr. 1 (= Benchmark)
                                                                    effective in driving the installation of some 650 kW in
Benchmark definition                                                new capacities to date since its recent introduction in
A successful tax measure should have the following                  May 005. Compared to the French system, however, the
characteristics:easily accessible, considerable contribution,       scheme has the disadvantage of being limited to a rather
simple and generally accepted requirements / obligations            short time frame of  ½ years and neglecting the already
(e.g.: IEC standards + Grid Code requirements).                     noticeable increase in demand from private households
Though less profitable than the investment subsidy                  and villa-owners. Dangers for stifling “stop & go” effects
scheme, which it has replaced, the French tax credit                in the absence of timely announcements of a continued
scheme is one of the most effective and attractive                  market development programme that includes private
tax schemes in Europe. The total refund level is high               households and commercial buildings are a cause for
(40 %) and accessibility is acceptable. Furthermore the             concern in the developing Nordic BIPV sector.
French scheme is the only scheme with a guarantee of
continuation past 006.                                             Differences between benchmark and other countries
The Swedish system consists of the most generous tax                Most other countries also run tax schemes albeit with a
refund level in the European Union and is exemplary for             disadvantage compared to the benchmark.
its combination of simple accessibility with guaranteed             • Tax deduction: the scheme is often quite complicated
duration (until the end of 007). The investment subsidy               to use, the benefit is not general, but depends on the
is specifically designed as a demonstration system to (A)              tax level, the actual contribution is rather low (10 %–
increase the technology’s visibility in the eye of the general         18 %)
public, which is why eligibility is confined to public buildings    • VAT reduction: though extremely easy to implement
such as schools, sports arenas, churches, congregation                 and use, the contribution of this scheme is rather low
centres, city halls etc and (B) to jump-start the PV market            (≤ max VAT tariff)
and transfer of know-how particularly to SMEs such as               • Caps for system sizes and limits for deduction.
installers, project developers, electricians, architects,
building materials manufacturers and other BIPV actors.
As such, the Swedish system has been extraordinarily


 70     PV Policy Group – European Best Practice Report
2.1.4 Budget of regulatory framework (feed-in tariff)
The discussion of the economic cost of a regulatory
framework, in contrast to its effectiveness in terms of
market and industry development is certainly a relevant
assessment criterion.
However, it is a highly complex task to capture, quantify
and compare these costs from country to country. When
calculating the economic cost of a regulatory framework
(e.g. feed-in tariff) benefits from PV such as contribution in
peak demand hours when energy costs are high and PV
ancillary services (e.g. reactive power for voltage control)
must be taken into account. Therefore the assessment of
the real (macro-economic) value of PV cannot be easily
done against the production cost of the utility at the power
plant. The cost arguments will be further discussed and
elaborated in the working group within the PV Policy
project. As a first result, instead of conducting a benchmark
analysis we summarise the results from previous studies
and expert opinions on the issues.

Performance Budget for feed-            Cumulative
criterion   in tariffs in 2004          Installed PV
                                        Power
                                        Grid-connected
Performance      M€                     MWp
indicator
Austria          7,51)                  15,01)
France           –                      –
Germany          5,5   )
                                        768)
Greece           approx. 0 for all     approx. 1,4
                 RES annually
Italy            –                      –
Japan            –                      –
Netherlands      –                      -
Portugal         –                      –
Slovenia         0,0004                 0,001
Spain            –                      –
Sweden           –                      0.3
UK               –                      –
1) (Source: E-Control, figures refer to end of 004)
) IEA-PVPS Report, September 005

To achieve an ambitious target, high investment for PV
systems is needed. Germany has achieved the target with
the feed-in tariff. The general public in Europe only invest
if they receive a reasonable return on investment. The
feed-in tariff system provides the following advantages:
• The return on investment depends on the system
    performance over the guaranteed period of 0 years –
    this ensures a maximised generation of solar electricity
    in this period
• long-term perspectives,
• high quality of products (to ensure maintenance free
    operation for 0 years),
• hardly any administration,
• reducing system prices,
• independent from the budget of the government
• high driver for the industry to reduce costs




                                       C. Benchmark Analysis – comparison of 1 national PV policy frameworks   71
2.1.5 Administrative implementation of regulatory
framework in practice
This sub-area assesses the administrative processes in
practice, which are required to qualify for public support
/ feed-in tariffs and actually install a PV system. These
procedures can be a decisive factor for the success of a
policy instrument. The aim must be to commission a PV
system as fast as possible and not to frighten off potential
investors by administrative barriers.
Three performance criteria and indicators were defined
for this assessment area:
• Overall complexity of administrative processes
    (measured by qualitative estimations);
• Permissions required and authorities involved
    (numbers)
• Duration of planning processes / average lead time for
    investors (months)

Performance measurement
Performance      Overall complexity of          Permissions required /            Duration of planning processes /
criterion        administrative processes       authorities involved              average lead time
Performance      Qualitative estimation         Number                            Months
indicator
Austria          ++                             5+ permissions / 3+authorities    4–10 (only small-scale projects)
France           ++                             4+ permissions / 4+authorities   4–1 (small-scale projects) –
                                                                                 1–4 (large-scale projects)
Germany          +++                            4+ permissions / 2+              < 2 (small-scale projects) –
                                                authorities                      8–12 (large-scale projects)
Greece           +                              17+ permissions / 3+ authorities 6–1 (small-scale projects) –
                                                                                 indefinite (large-scale projects)
Italy            +                              4+ permissions / 3+ authorities > 18 months (small-scale projects) –
                                                                                 4–36 (large-scale projects)
Japan            +++                            n.k.                             n.k.
Netherlands      +++                            n.k.                              n.k.
Portugal         +                              n.k.                              n.k.
Slovenia         +                              5+ permissions / 3+ authorities   >6
Spain            ++                             5+ permissions / 3+ authorities   8–14
Sweden           +++                            1 permission/1 authority          –3
UK               ++                             n.k.                              n.k.


         Nr. 1 (= Benchmark)

Benchmark definition
Certainly administrative procedures of PV projects in
Germany can be considered a benchmark since they have
been developed by ongoing practice over the years. Not
to be ignored, however, is the swift and unbureaucratic
manner by which Swedish authorities (county councils)
are handling permit and funding applications.




 7     PV Policy Group – European Best Practice Report
The following table gives an overview of the 5-step
process:

Step      Activity              Conditions / Requirements                                             Responsibility
1         GENERAL           – The investor disposes of an adequate place with southward               Owner/Investor
          INVESTMENT          orientation; roof or facade or ground space;                            in collaboration
          DECISION +          Feasibility study to define size, financing and profitability.          with PV system
          request for 2–3     Check of different financing concepts (own resources versus             supplier/architect
          offers from PV      loans);
          suppliers           Simulation of energy output for the selected PV system;
                              payback time calculation with fixed feed-in tariff, guaranteed
                              over 0 years.
2         Definition of the – Decision for one of the offers from PV suppliers;                       Owner/Investor in
          financing scheme – Decision for the most viable financing concept;                          collaboration with
          and SELECTION     – Application for a loan from the bank (either via private bank or        system supplier
          OF THE PV           “German Bank for Reconstruction”) including submission of               (Installer)
          INSTALLER           the offers – if required;
                            – Contract with the selected PV company/ installer.
3         INSTALLATION OF Basic design (or project design for Construction Permit);            Owner/Investor in
          THE PV PLANT      – Architectural design for PV installation                         collaboration with
                                                                                               system supplier
                                                                                               (Installer)
4         CONTRACT        CONNECTION                                                           Owner/Investor
          FOR GRID        Technical regulations and standards exist, e.g. regulation for low and local utility
          CONNECTING      power connection to the grid, ENS for the inverter;
          AND SELLING OF A certified electrician acknowledged by the local utility conducts
          THE ELECTRICITY measurements on AC power output, connects the system to the
                          grid, installs counters and seals it;
                          The electrician can also be provided by the PV system supplier;
                          The price of electricity is fixed for specific power size for PV and
                          defined in the EEG (Renewable Energy Law);
                          CONTRACT:
                          Utilities have to close a contract with owner/investor, standard /
                          model contracts are available, but they slightly differ from utility
                          to utility
5         ACQUISITION     The investor submits the application to the financial authority in Owner/Investor
          OF THE STATUS   order to obtain the status of a power producer;                      and Fiscal
          “POWER          VAT is refunded by the fiscal authority.                             Authorities
          PRODUCER”

Source: WIP (2005)

Differences between benchmark and other countries               Nederlandse Technische Afspraak (Dutch Technical
In most countries, administrative procedures for                Agreement)).
authorisation, grid access and approval of subsidies for      • Local authorities in charge are still unfamiliar with PV
PV installations represent a major market barrier.              installations and often overchallenged or overcharged
• Even small-scale PV installations are treated as any          with applications – this leads to uncertainties, time-
   electricity production facility, so the requirements are     consuming administrative delays and inappropriately
   often inappropriate for this type of technology (e.g.        long lead times or “pre-project” phases for promoters;
   building permissions, environmental impact analysis) –
   only in some countries have sector regulators introduced   Electricity sector regulations relevant for the PV market
   specific technical or administrative guidelines for PV     In the Netherlands grid connected systems with an Imax ≤
   developers;                                                ,5 A can be connected to the grid as any other
• The application of general regulations in practice is       domestic appliance. Grid connected systems with an Imax ≥
   rather diverse from region to region (or county, even      ,5 A have to be reported to the utility, the utility forwards
   municipality), so the PV system developer depends          the notification to the grid manager. The grid manager
   very much on the co-operation of local authorities and     is responsible for verification of system connection in
   utilities – in most countries common rules for practical   accordance with the Grid-Code.
   issues such as approval periods, costs or contracts        No building requirements are defined for building
   remain undefined. NB: a national standard for the          integration and since 003 building integration is exempt
   installation of small PV systems does exist in the         from permits from the building inspection authorities.
   Netherlands and was composed in close collaboration        To guide installers NEC 8, the Dutch division of the IEC
   with installers and the PV industry: NTA 8493 (NTA =       TC8, published a national technical agreement (NTA),
                                                              an official guideline.


                                     C. Benchmark Analysis – comparison of 1 national PV policy frameworks             73
2.2 Efficiency of PV support schemes

This assessment area deals with the efficiency of PV
support schemes. The efficiency of PV policy instruments
can be measured by the policy monitoring. It is split up in
four sub-areas:
• Attractiveness of conditions for target groups;
• Economic cost of support schemes;
• Administrative implementation of support schemes.

Given the predominance of these programmes, the
analysis mainly refers to soft loans or investment grants.

2.2.1 Attractiveness of conditions for target groups
The attractiveness of a support scheme is reflected
in the overall amount of the subsidies, the total budget
allocated to the programme and the lead-time required for
application processes.
Three performance criteria and indicators were defined
for this assessment area:
• Subsidy terms (measured by max % of investment
   cost)
• Total budget/public spend (Mio € or max. number of
   projects/MWp subsidised)
• Handling in practice/time required for applications
   (qualitative estimations)

Performance measurement
Performance Name / type of                 Subsidy terms            Total budget (public      Handling in practice
criterion   scheme                                                  spend)                    (time required for ap-
                                                                                              plications)
Performance     Mix of instruments         Max. % of investment     Mio. €                    Qualitative estimation
indicator                                  cost                     (number of projects /     (months)
                                                                    MWp subsidised)
Austria         “Austrian Environment      diverse from province to “Austrian Environment     Application via pro-
                Support” - national        province;                Support”: 001–003:      gramme agency and
                grant scheme + diverse     < 40 % of investment;    0,17Mio. €                provincial authorities
                provincial schemes         < 3.700 €/kWp (Upper     (number of projects/
                – still running            Austria) to 7.000 €/in-  MWp subsidised)
                                           vestor (Styria)
France          National grant scheme      Until 004 < 80 % of     € 11,7 Mio. (ADEME)       Applications via
                by ADEME + regional        investment; < 4.600 €/ + € 10,7 Mio. (regions)     ADEME’s regional of-
                schemes (+ tax credits)    kWp (+ 10 % tax credit); in 004;                  fices
                – still running            Since 005 < 1.000 €/ (number of projects/         (6–1 months)
                                           kWp (+ 40 % tax credit) MWp subsidised)
                                           for private persons; < 
                                           800 €/kWp for compa-
                                           nies / public bodies
Germany         “100 000 roofs pro-        Soft loan (approx.       € 1 700 Mio. over 5       Application via house
                gramme” – national soft    1,91 % interest rate);   years (65.70 projects,   banks
                loan scheme by KfW         < 6.30 €/kWp (< 5       MWp subsidised n.a.)      (–3 months)
                – expired in 003!         kWp); < 3.115 €/kWp (>
                                           5 kWp)
Greece          “OPC programme” – na-      Between 40 % and 50 % € 58,7 Mio. (001/0)        Application via pro-
                tional grant programme     of investments depend- + € 67,5 Mio (003/04)      gramme agencies
                for RES and others         ing on the region        for RES projects
                                                                    (number of PV projects
                                                                    / MWp subsidised n.a.)




 74    PV Policy Group – European Best Practice Report
Performance Name / type of                    Subsidy terms               Total budget (public       Handling in practice
criterion   scheme                                                        spend)                     (time required for ap-
                                                                                                     plications)
Performance       Mix of instruments          Max. % of investment   Mio. €                          Qualitative estimation
indicator                                     cost                   (number of projects /           (months)
                                                                     MWp subsidised)
Italy             “10 000 solar roofs pro- < 75 % of investment; < € 10,3 Mio (federal               Applications via region-
                  gramme”                     from < 7.30 €/kWp (0 budget) for part 1; € 50        al authorities
                  national grant pro-         kWp) to < 7.750 €/kWp Mio. (Federal + regional         (> 1 months)
                  gramme (via regional        (1–5 kWp)              budgets) for part ; €
                  call-for-proposals) – still                        1,6 Mio. (federal budg-
                  running                                            et) for part 3
Japan             “Residential PV system ca. € 450 per 1 kWp in ca. € 5,5 Mio for 004              n.k.
                  dissemination pro-          004
                  gramme” -
Netherlands       “EPR programme”             < 3.500 €/kWp (extend- Estimated at € 40–70            Application via utilities
                  National grant scheme ed by 5 % in case of        Mio. over 3 years (8,5
                  - suspended 003!           special certification) Mio. for grid-connected
                                                                     PV)
Portugal          “Mape” – refundable         40 % maximum refund- No special budget for             n.k.
                  grants                      able aid               PV
Slovenia          Subsidy for small PV        40 % of the investment € 500 000 available in          Ministry for Environ-
                  plants up to 1kW            costs, max € .080 per 005 for solar termal,          ment (public tender
                                              system                 heat pumps and PV               open up to the dis-
                                                                                                     bursement)
Sweden            Investment subsidy in       70 % of the total instal-   ca. € 10 Mio.              –3 months
                  form of tax deduction       lation cost
                  for grid-connected PV
                  on public buildings
Spain             “Financing line ICO-        < 80 % of investments € 189,6 Mio. (39,6 Mio.          Application via local
                  IDAE” – combined            < 7.000 €/kWp;            for direct subsidies)        house banks
                  national soft loan +        (< € 0,6 Mio per in-                                   (8–12 months)
                  grant programme             vestor and year) for
                                              plants < 20 kWp
UK                “PV Major Demonstra-        40–55 % of total eligible ca. € 46 Mio                 Application via agency
                  tion Programme” –           costs                                                  EST
                  national grant scheme                                                              1 to 3 months

         Nr. 1 (= Benchmark)

Benchmark definition                                              funds are designated for the part amortisation of loans
For this criterion it is rather difficult to identify one clear   and interest rates discounts.
benchmark, but there are two systems that stand out: the          The programme is in place since 1999. Generally it has no
German as well as the Spanish support schemes have                expiry date, but is annually re-defined as regards budget
both been fairly successful. Because the Spanish system           and conditions. The resources available for 004 amount
is a bit more complex and has an interesting history of           to 189.600.000 euros. From this amount IDAE provides
origins, it deserves closer examination.                          funds worth 39.600.000 euros to discount interest rates
                                                                  for all types of projects, as well as direct support for solar
Spain: financing line ICO-IDAE                                    heating and photovoltaic solar energy projects. 431 PV
The current Spanish support programme is a merger of two          installations were approved in 004.
different instruments: soft loans of public promotion bank        Each investor can apply for loans up to € 6.310.500
ICO and direct subsidies of IDAE. This support scheme             per annum and a 7.000 €/kWp maximum, respectively.
is not exclusively applicable for PV, though solar energy         The maximum investment to be financed is 90 % for PV
is clearly the focus. It is based on the firm institutional       systems. Solar projects have a unique amortization period
boost for thermal and photovoltaic solar energy under             since there is a payment holiday period of seven years.
100 kWp. The support programmes that IDAE has been                Private individuals as well as corporations can benefit
running for these two technologies have been integrated           from the support scheme.
into one single financial tool. This integration responds to
sector demands and the need to support users, both in             Differences between benchmark and other countries
procedural aspects such as deadlines, access to public            Spain is the only country with a combined soft loan and
grants and in solar energy. The finance line maintains            grant programme. This mix of instruments is beneficial for
public economic support for solar energy technologies,            the target groups and heavily contributes to the promotion
reinforcing it by providing preference funding. These             of PV. Pure soft loan programmes are not enough for a



                                        C. Benchmark Analysis – comparison of 1 national PV policy frameworks               75
PV market to really take off. In the case of Germany, the        2.2.2 Budget for support scheme
100 000 rooftops programme (HTDP) could not achieve              The discussion of the economic cost of a support scheme,
this effect before the EEG started in 000. Only the             in contrast to its effectiveness in terms of installations, is
combination of EEG and HTDP secured commercially                 certainly a very relevant assessment criterion.
oriented PV investors a full payback of their investment         However, it is difficult to quantify and compare these costs
and the breakthrough of the market. Since the Spanish            from programme to programme and country to country.
feed-in tariffs are not as high as the German ones, it makes     Official data from programme monitoring are often not
sense to not only offer soft loans but – to some extent          available or not up to date.
– grants. In Spain, the whole package of PV promotion            The cost arguments will be further discussed and
measures is very promising.                                      developed in the working group within the PV Policy
In Spain, a PV investor can apply for a maximum                  project.
of 7.000 €/kWp – which is the biggest amount to
be obtained in Europe. Together with the feed-in                 Performance       Budget         Installed  Budget
tariffs, PV has become a profitable investment. Also             criterion         for subsidy    PV Power per Wp
the budget of € 189,6 Mio. allocated for the whole                                 schemes        Grid-
programme is notable. Only the budget of the German                                in 2004        connected
100 000 roof programme was bigger. Another advantage                                              & off grid
of the Spanish scheme is its countrywide uniformity. It is                                        in 2004
not further complicated by different regional programmes         Performance       M€ 1)          MWp 1)     €/Wp
or budgets, which makes it easier for the target groups to       indicator
apply.                                                           Austria           –              –             –
In Greece a high subsidy is provided on the capital cost         France   )
                                                                                   4,           5,           8,11
through the Operational Programme for Competitiveness
                                                                 Germany           -              -             -
(OPC) which is the major tool for obtaining a subsidy for
an energy investment including PV. According to the last         Greece            n.a.           1,03          n.a.
call, subsidies vary between 40 % and 50 %, depending            Italy             3,           4,7           4,9
on the geographical location of the application. OPC is          Japan             122,7          272,4         0,45
financially supported by both national and EU funds under
                                                                 Netherlands       1,15           3,16          0,36
the Community Support Framework III. OPC became
effective in 001, with virtually similar strategic scope and    Portugal          –              –             –
actions to the preceding Operational Energy Program              Slovenia          –              –             –
(OEP) that ran between 1997 and 000.                            Spain             –              –             –
Investment Subsidy (ROT) for Energy Efficiency and               Sweden            0,11           0,85         0,39
Renewable Energy in Public Buildings in Sweden:
                                                                 UK                8,3            ,           3,77
• Commenced in May 005, it will last until December
   007; total funds allocated: 10 MEUR which are                1) (Source: IEA-PVPS) ) mainly off-grid
   expected to be fully subscribed by Q3 006 mainly
   due to high interest shown by population dense city                    Nr. 1 (= Benchmark)
   authorities (Stockholm, Gothenburg, Malmö);
• Functions as a tax deduction of 70 % of the investment         In Europe, the Netherlands were quite successful with
   costs following a completed system installation with          the Dutch programme and resulted in a reasonable PV
   a maximum limit per project of 500.000 EUR, covers            installation capacity until the government stopped the
   both material and external labour; thus effective in          programme. In Japan the support schemes results in high
   the development of professional know-how (installers,         numbers of PV installations. PV is highly accepted by the
   architects, project developers etc.);                         public and seen as an innovative ‘high tech’ product. In
• Specifically designed as a public demonstration                most cases it is already implemented into the houses
   programme for buildings that are tax registered as            when the owner buys the house. It is a ‘prestige’ product.
   “special buildings”, i.e. public congregation places such     In Europe it is mainly a question of return on investment.
   as sports centres, conference halls, churches, schools,
   airports, railway stations etc.;                              2.2.3 Implementation and administration of support
• Low administrative burden, simple application form with        schemes in practice
   a minimum level of system parameters/requirements             This area evaluates the management of the support
   (the few parameters that do exist are intended mainly         schemes in practice. Three performance criteria and
   for statistical follow-up) and maximum level of flexibility   indicators were defined for this assessment area:
   in system configuration/design (though always grid-           • Assessment by programme managers (measured by
   connected and building integrated/applied) coordinated           qualitative estimations);
   by county councils (local proximity, relatively low level     • Assessment by PV industry (qualitative estimations);
   of red-tape);                                                 • General impact on PV market (qualitative estima-
• First market support mechanism ever in Sweden, will               tions).
   effectively double the total PV capacity and increase
   grid-connected systems x 10; has jump-started the
   domestic market for PV in Sweden (from previous
   100 % focus on export).


 76    PV Policy Group – European Best Practice Report
Performance measurement                                        Differences between benchmark and other countries
Performance       Assess-       Assess-       General          Typical shortcomings in the management of subsidy
criterion         ment          ment by       impact on        programmes in many countries can be summarised as
                  by pro-       PV indus-     PV market        follows:
                  gramme        try                            • The authorities in charge of handling applications are
                  managers                                         technically unprepared for the requirements of an
Performance       Qualitative   Qualitative   Qualitative          efficient programme administration; which may lead to
indicator         estimation    estimation    estimation           implementation problems;
                  based on      based on      based on         • Different authorities put common regulations into
                  interviews    interviews    interviews           practice in a very different way, this leads to inefficiencies
Austria           +++           +++           +++                  and confusion among market actors;
France            ++            ++            +                • The approval procedures are limited to a short period
                                                                   of the year or are characterised by long, bureaucratic
Germany           +++           ++            ++
                                                                   procedures;
Greece            +             +             +                • Due to limited budgets the programme does not satisfy
Italy             ++            +             +                    the existing demand; only a small percentage of
Japan             +++           +++           +++                  applications is accepted overall;
Netherlands       ++            ++            +++              • The programmes do not require effective monitoring
                                                                   systems for performance measurement of the plants,
Portugal          +             +             ++
                                                                   so it can not be avoided that a part of PV plants fall
Slovenia          +             +             +                    short of performance targets;
Spain             ++            +             ++               • Most programmes only promote small installations (<
Sweden            +             +             +                    0 kWp) and have a weak leverage effect amongst the
                                                                   public;
UK                ++            +             ++
                                                               • Operators were not able to make profits with their
                                                                   installations, which could have been re-invested;
          Nr. 1 (= Benchmark)                                  • Due to the capacity threshold of < 0 kWp per
                                                                   installation commercial investors are hardly attracted
Benchmark definition                                               by the programmes;
The administrative handling German of the “100.000             • Larger-scale installations with a leverage effect for the
Rooftop (HTDP)” programme is widely regarded as                    PV sector were not promoted at all;
efficient by the PV industry:                                  • Awareness or acceptance of PV in the public is often
Administration, roles and responsibilities:                        not raised effectively, so no critical mass in demand
• Private banks: application process by KfW standard               (“pull effect”) is triggered. In Germany smaller
    forms via house bank; the bank determines the nature           programmes were initiated at the beginning, e.g. 1.000
    of required securities (on application the KfW can grant       Roof Programme, regional and school programmes,
    a 50 % liability exemption);                                   awareness campaigns for clean and environmental
• KfW: general evaluation of applications, approval and            friendly power production.
    allocation of budgets;
• Regional promotion banks: some have their own soft           National strategy and framework for PV promotion
    loan programmes that grant additional reduction in         In the Netherlands the development and sequence of the
    KfW interest rates (application also via house bank).      different support schemes for PV and the strategy behind
                                                               was well balanced and well chosen up to 003:
During the five years of the HTDP 76.000 credit                1978:              start of the general solar research
applications with an overall volume of over ,3 Billion Euro                      programme NOZ
were placed.                                                   1986:              splitting off of the PV specific research
                                                                                  programme NOZ-PV
Budgets and sources of funding:                                1986 – 000:       even growth of the NOZ-PV budget
• Federal budget: overall 1,7 Billion Euro, distributed                           from 0 MEUR to 18 MEUR
  over 66.000 approved soft loans;                             1986 – 000:       gradual shift of the NOZ-PV
• Regional budgets: only in case of additional regional                           programme from R&D only to a
  credit lines.                                                                   balanced mix of R&D, product
                                                                                  development, demonstration and
The KfW invoices the total budget on an annual basis to the                       implementation
Ministries of Economic Affairs (BMWA) and Environment          001:              merging of the RE option specific RTD
(BMU) that transfer the amount (< 100 Mio. Euro p.a.) to                          programmes to one general RE RTD
the KfW from their ministerial budgets. The programme                             programme
triggered a PV investment volume of approx. ,4 Billion        001:              introduction of the investment
Euro and the installation of 346 MWp.                                             subsidy (EPR)

                                                               This scheme led to a strong international position for the
                                                               Dutch PV RTD centres as well as market growth of more
                                                               than 45 % from 1995 till 003, which is more than 5 % above


                                      C. Benchmark Analysis – comparison of 1 national PV policy frameworks                77
average world-wide market growth during those years.              Benchmark definition
This carefully build up sequence however was suddenly             In terms of effective market monitoring Spain as well as
terminated with the ending of the EPR subsidy at the end          The Netherlands show innovative initiatives:
of 003. Due to unforeseen accumulation of subsidies,
from which some were extended subsidies which should              BDFER database in Spain
have closed earlier, the actual cost of a PV system could         The ambitious objectives set by the Renewable Energy
in some special cases fall below 0,00 EUR. This caused            Plan (PFER) make it necessary to ensure adequate
an explosion of the market with market growth of around           coordination between all the strategies that may be set
50 % in 003. The consequential excessive demand on              up in Spain to promote renewable energy, whether these
the public budget forced the ministry to stop the scheme.         initiatives arise at the level of central, regional or local
                                                                  government. This fact, in conjunction with the need to
                                                                  record and evaluate all actions in the field adequately,
                                                                  led the IDAE and the various bodies at the Autonomous
2.3 Efficiency of PV monitoring systems                           Region level responsible for renewable energy, to consider
                                                                  it appropriate to develop a shared, uniform computer tool
This chapter covers the assessment area of PV                     that could be used by all those involved as a means of
monitoring systems. Monitoring is a very important but            examining, recording and evaluating actions undertaken
often neglected topic in the context of effective PV market       as part of the PFER.
promotion. There are two sub-areas assessed:                      Thus, the IDAE, together with the bodies and agencies
• National approach to market monitoring;                         in the Autonomous Regions, developed a computer
• National approach to PV policy performance                      database to provide real-time information on renewable
   measurement.                                                   energy investment projects during the period in which the
                                                                  Plan is in force.
2.3.1 National approach to market monitoring                      By means of this system the information on RE
Market data are very important for all actors in the PV           installations in Spain can be updated rapidly and retrieved
sector. Nevertheless, it is very difficult to find reliable and   or processed by any BDFER user by means of his access
accurate market figures, because the market players are           code, depending on his user profile. The purpose of the
not willing to disclose their internal data.                      access codes is to limit access to BDFER to users only.
Three performance criteria and indicators were defined            These users comprise the various project participants,
for this assessment area:                                         namely authorities and institutions on national, regional
• Quality of project monitoring (measured by qualitative          and community level. The aim of the system is to protect
   estimations);                                                  the information in such a way as to ensure that it is not
• Quality of market surveys (qualitative estimations);            modified except by the user responsible, i.e. the user who
• Quality of national plant register (qualitative estima-         is registered on BDFER as the originator of the data.
   tions).                                                        The basic unit of information in BDFER is referred to as
                                                                  a “Project”. This is defined as any activity, whether an
Performance measurement                                           installation, a dissemination workshop or a management
Performance Quality    Quality                  Quality           activity, that is carried out in the renewable energy sector.
criterion   of project of market                of national       The various project contents are organized around this
            monitoring surveys                  plant             elementary unit in accordance with uniform information
                                                register          modules, of which a total of five have been developed:
Performance       Qualitative    Qualitative    Qualitative       General Data, Project Description, Financial Data, Energy
indicator         estimation     estimation     estimation        Data, and Technology Data. To help in project monitoring
Austria           ++             ++             +++               users have an additional folder for their own exclusive use
France            ++             ++             +                 for any observations they wish to make.
                                                                  Both the content and working methodology were arrived
Germany           ++             ++             +                 at by consensus between all the partners with a view to
Greece            ++             +              +                 creating a uniform concurrent working environment in
Italy             +              +              +                 BDFER. This harmonization of quantitative and qualitative
Japan             n.k.           n.k.           n.k.              evaluation criteria ensures that inventories at regional,
                                                                  national and community level are fully comparable. This
Netherlands       ++             +++            +
                                                                  enables different users to evaluate the progress made in
Portugal          +              ++             +                 the renewable energy field satisfactorily.
Slovenia          +              +              ++
Spain             +++            ++             +++               PV market monitoring in The Netherlands
                                                                  The Netherlands developed a very reliable market
Sweden            +              +              +
                                                                  monitoring approach via industry surveys. Until 004
UK                ++             +              ++                several monitoring schemes were in place in The
                                                                  Netherlands, measuring indicators concerning the Dutch
         Nr. 1 (= Benchmark)                                      PV market. None of these schemes resulted in a reliable
                                                                  and overall insight in the performance of the PV market.
                                                                  Therefore, Holland Solar, IEA PVPS (SenterNovem)
                                                                  and CBS (Statistical Agency by the Dutch State) agreed


 78     PV Policy Group – European Best Practice Report
on a joint approach. They committed themselves to the          tariffs the situation is more difficult because the utilities
following monitoring requirements: reliable, independent,      do not release fully reliable data. Another system can be
confidential, applicable by all stakeholders, covering all     observed in Austria, Spain and soon also in Germany
required data and availability soon after the year ending.     and other countries: a national plant register in which
Together with representatives of the industry a two-page       every PV system that is connected to the grid, has to be
questionnaire was developed which investigates figures         covered (see next chapter). But still the Spanish system,
such as installed power, production capacities, turnover,      as it was described above, has one major advantage. All
import/export, domestic trade, employment, and RTD             institutions offering support for PV on national, regional or
budget. The questionnaire was sent to more than 95 %           community level insert their data independently into the
of the supply chain in Holland and about 80 % of them          shared database. Therefore it is much easier to evaluate
(covering > 90 % of the Dutch market) filled in the            and monitor the impact of the single programmes and still
information. The monitoring activities are conducted           have overall country figures.
by CBS, which is a truly independent governmental              Until the end of 004, every grid-connected system which
organisation. Only they know which company provided            was realized by France was financed partially by ADEME.
which data. The participating companies merely see             ADEME’s ERP enabled efficient monitoring both for public
accumulated figures.                                           subsidies granted to the PV market and kWp installed. A
                                                               national plant registration database is also kept updated
Differences between benchmark and other countries              by EDF and a questionnaire is sent annually to the PV
Although no European country has a completely                  industry. It allows for high precision in market figures.
convincing market monitoring system, in certain aspects
the Spanish and Dutch systems are outstanding. The             2.3.2 National approach to PV policy performance
Netherlands has a good system for covering the industry        measurement
side: The Dutch Agency for Statistics collects performance     In order to review whether political targets of policy
data from the PV industry and processes the numbers.           instruments are actually achieved, professional
On the other hand, Spain has a good approach to                monitoring is essential. Therefore, on the following pages
measure the installation side of the PV market. There is       the approach to policy performance measurement will be
the PFER monitoring project in collaboration with regional     assessed and compared.
authorities centred upon a computer database in which          Three performance criteria and indicators were defined
all projects are entered. However, only the combination        for this assessment area:
of the two systems would give a complete and real-time         • Consistency of the performance measurement
picture of the PV market.                                         approach (measured by qualitative estimations);
In Germany the national PV industry association BSi has        • Data quality (qualitative estimations);
installed an online system collecting production statistics.   • Transparency of approach (qualitative estimations).
The participating companies enter their production
figures themselves while protecting their anonymity. The       Performance measurement
production statistics numbers are updated on a monthly         Performance Consist-           Data quality Transpar-
basis and every three months the results are published.        criterion   ency of                         ency
This monitoring system is similar to the Dutch system, but                 approach
has one important difference: the German companies stay        Performance Qualitative        Qualitative     Qualitative
completely anonymous, so nobody can check the figures          indicator   estimation         estimation      estimation
that they enter into the online database and therefore the                 based on           based on        based on
results are not completely reliable. Obviously a supervisory               interviews         interviews      interviews
body is inevitable. But since the company statistics are       Austria     +++                +++             +++
very sensible, the supervision has to be done by a widely      France           +             +               ++
respected and trusted institution. In The Netherlands
                                                               Germany          ++            ++              ++
this is the Dutch Agency for Statistics, a governmental
institution. They check the questionnaires and publish         Greece           +             +               +
the accumulated numbers; the individual numbers stay           Italy            +             ++              +
anonymous to the public and the participants of the survey.    Japan            +++           ++              +
This is essential, as no company wishes to disclose its
                                                               Netherlands      ++            ++              ++
statistics to competitors.
In many European countries true monitoring of the PV           Portugal         +             ++              +
industry is missing. Although the respective national          Slovenia         +             +               +
industry associations are collecting figures from their        Spain            +++           ++              +
members on an annual basis, the Dutch system offers
                                                               Sweden           +             +               +
more comprehensive and sound information.
As far as the demand side of the PV market is concerned,       UK               ++            ++              ++
countries with subsidy schemes all collect data in the
framework of these programmes (France, Italy, UK                        Nr. 1 (= Benchmark)
and also Germany until the end of the 100.000 roof
programme). Assuming that all investors that wish to install   Benchmark definition
a PV system use subsidies, market figures are reflected        It seems as if Austria currently has the most elaborate
quite well by these programmes. In countries with feed-in      approach to policy performance measurement. Austria


                                      C. Benchmark Analysis – comparison of 1 national PV policy frameworks           79
successfully monitors its feed-in law; while Germany             Germany now plans to introduce a similar system. To
had a good monitoring of its former soft loan programme          improve the monitoring of the EEG in the future, plant
HTDP (ended in 003).                                            and grid operators are obliged to deliver further data. This
                                                                 additional information shall lead to more transparency
Austria: Monitoring of the Green Electricity Act                 with regard to the calculation of appropriate feed-in-tariffs
The regulatory body, E-Control, is in charge of monitoring       that ensure a profitable operation of RES plants, but also
the effects of the Green Electricity Act and has to deliver      to enhanced knowledge of the environmental effects of
an annual report to the Federal Ministry of the Economy.         the law. A key instrument for data collection is the new
E-Control has three channels of data collection: 1.) PV          plant register in which all operators will be obliged to enter
systems have to be accredited as “green power plant” by          data online from 006 onwards. Information such as the
provincial governments. This data, containing capacity of        number of kWh fed into the grid or the amount of tariffs
the plant and the energy source, are processed into the          paid can only be collected in collaboration with the utilities
database of E-Control. This allows calculating the total         and the plant operators, as it is the case in Austria. In
capacity per energy source. .) GPBGR (Green power               contrast, this information is not available for example in
balance group representative) is obliged to buy RES-E and        the Spanish database as described earlier. The Spanish
to pay the tariffs. GPBGR operates a database containing         system is more relevant for the monitoring of subsidy
detailed information concerning installed capacity, fed-in       schemes than for feed-in laws.
electricity and paid tariffs. All this information is reported   In general, support programmes such as the HTDP in
to E-Control. 3.) Own investigations by E-Control.               Germany, are easier to monitor than feed-in tariff systems.
The monitoring report of E-Control – published annually          As people have to apply for the subsidies, the PV capacity
in June – contains:                                              installed under the programme and the cost of the
• Statistics: Supported volumes, expenses, capacities of         programme can easily be collected. This is also the case
   accredited plants                                             for France, Italy and the UK. Also the Spanish system with
• Anticipated trends                                             its online database offers this data. Additionally, since all
• Compliance with targets (15 MW)                                Spanish institutions offering support for PV on national,
• Recommendations                                                regional or community level insert their data into the
                                                                 shared database, it is possible to evaluate and monitor
The Austrian monitoring system delivers interesting and          the impact of the single programmes.
reliable figures. But one has to bear in mind that gaps
can emerge if accredited plants are not on-line or if grid-
connected plants do not receive feed-in tariffs (because
the 15 MW cap has already been reached).

Germany: HTDP performance measurement
The KfW performed the quantitative monitoring of the
soft loan programme on its own. An advisory group
(including the solar industry associations) was installed,
in which practical problems in implementation and lessons
learned in the market were discussed. Assessment
reports by KfW can be downloaded at: www.bsi-solar.
de/foerderprogramme/100.000daecherprogramm_daten.
asp.
In the assessment processes actual market development
was measured against the key performance indicators
defined by politics. These mainly industry political rather
than energy political indicators for PV can be summarised
as follows:
• Market development: installed capacities (in MWp) –
    „100.000 Rooftops“
• Industry development: investments (in Billion €),
    employment, revenues and export figures including
    European/international market share;
• Cost reduction: nominal system cost per performance
    unit (€/kWp)

Differences between benchmark and other countries
For the monitoring of feed-in laws, Austria definitely has
the best system amongst the countries analysed. All
plants that receive feed-in tariffs have to be registered
and the installed capacity, the feed-in electricity and the
tariffs paid are incorporated into a central database at E-
Control. These figures are essential to monitoring impact
and costs of the feed-in law.


 80    PV Policy Group – European Best Practice Report
3. Effectiveness of national PV sector development

In this chapter the external effectiveness of national policy
frameworks are evaluated. Four sub-areas were defined
for this overall assessment area:
• National PV market development;
• National PV industry development;
• National PV price development;
• National PV acceptance.

Again it must be stressed, that political measures are
not the only factors influencing the development of the
national PV sector, but certainly the most important
drivers or barriers.




3.1 National PV market development

One of the indicators for the success of a national PV
policy framework is the development of the national PV
market. Four performance criteria and indicators were
defined for the benchmark analysis in this area:
• Market size (measured by newly installed MWp/year in
   003 and 004)
• Market growth (%/year in 003/004)
• Market penetration (kWp/1.000 inhabitants in 003/
   004)
• Market perspectives (newly installed MWp/year in 010,
   worst case / best case forecast)

Performance measurement
Performance      Market size                Market growth          Market penetration      Market perspectives
criterion
Performance      Newly installed            %/year                 kW /1.000 inhabitants   Newly installed
indicator        MWp/year                                                                  MWp/year
Reference        003         004          003         004      003        004        010          010
year                                                                                       Worst Case Best Case
Austria          6,5           ,3          63 %         14 %      ,1         ,4         1,           14,8
France           3,7           5,9          63 %         60 %      0,         0,3         8,7         58,8
Germany          153,0         450,0        87 %         194 %     5,3         11,5        n.k.        1.002
Greece           0,4           1,0          -10 %        186 %     0,         0,3         0,4         114,8
Italy            4,0           6,0          0 %         50 %      0,5         0,6         ,0         30,0
Japan            3,0         7,0        1 %          %      6,74        8,87        n.k.        n.k.
Netherlands      19,6          3,          75 %         7 %%      ,8         3,1         1,1         7,7
Portugal         0,401         0,574        4 %         8 %      0,0        0,5        36          10
Slovenia         0,005         0,007        0            50 %      0,0005      0,003       0,3         5,5
Spain            6,5           10,0         31 %         54 %      0,63        0,86        30,0        300,0
Sweden           0,84         0,85        9%           7%        0,40        0,4        n.k.        n.k.
UK               1,767         ,61        7 %         8 %      0,1         0,14        5          50

         Nr. 1 (= Benchmark)

The following table shows the electricity produced by
PV installations from 1998 to 004 in comparison to the
realisable potential until 00. Luxemburg and Germany
have capitalised most on their potential. The relevant
policy schemes during this period are shown in different
colour codes.



                                       C. Benchmark Analysis – comparison of 1 national PV policy frameworks    81
Average effectiveness indicator – Photovoltaics
3%




2%




1%




0%
      AT BE DK FI FR DE GR IE              IT LU NL PT ES SE UK EU15

       Feed-in tariff     Quota/TGC        Tender       Tax incentives/Investment grants

Figure C2-1: Economic effectiveness in the period from 1998 to 2004.
Source: Communication from the European Commission, The support of electricity from RES, 2005

Benchmark definition                                           With an installed capacity of more than 750 MWp by
The benchmark for the assessment area “national PV             the end of 004 the German market has kept and even
market development” is the selected project partner            strengthened this leading position. After only a small
country Germany.                                               growth in 00 (+ 3 %, due to an overall economic
In spite of an average solar radiation approx. 30 % below      downward trend and changes in the national subsidy
the level of southern European countries Germany has           programme) and a clear upswing in 003 (+ 87 %)
evolved into Europe’s leading market for PV installations.     Germany experienced a boom year (+ 140 %) beyond all
This market development could only be accomplished             expectations in 004. With a newly installed capacity of
due to an effective legal framework, built around the          450 MWp in 004 the overall market volume increased
Renewable Energy Law (EEG), which guarantees                   more then 10 times in comparison to 1999. Apart from
sufficiently attractive and secure feed-in-tariffs for solar   Luxemburg, Germany also shows the highest installation
electricity (see detailed presentation later on!).             density (4, Wp/inhabitant in 004) in Europe.


Annual and accumulated PV capacities

annually installed in MWp                                             total installed in MWp
325                                                                                    910
300    New installations in 2004: approx. 450 MWp                                      840
275                                                                                    770
250                                                                                    700
225                                                                                    630
200                                                                                    560
175                                                                                    490
150                                                                                    420
125                                                                                    350
100                                                                                    280
 75                                                                                    210
 50                                                                                    140
 25                                                                                    70
  0                                                                                    0
      1990 ’91 ’92 ’93 ’94 ’95         ’96 ’97 ’98     ’99 2000 ’01 ’02    ’03 ’04

        annually inst.grid of German   annually inst.off grid
Figure C2-2: Development connected PV market                            total inst.




 8    PV Policy Group – European Best Practice Report
The fast growth rate was leveraged by the start of the          • the feed-in-tariff has been fixed high enough to enable
„100 000 Rooftop Programme” (HTDP) in 1999, whose                 a profitable operation of PV plants;
impact has to be evaluated in combination with the new          • for PV installations on buildings usually no building
Renewable Energies Act (EEG) in 000.                             permission is required;
The HTDP programme further developed the previous               • for large parks on open land clear legal framework
federal „1.000 Rooftop Programme“ that had been started           conditions were defined.
already in 1991. After this former programme had run out
in 1995, the German PV market at first stagnated at a           Differences between benchmark and other countries
very low level. Meanwhile 5 cities introduced the so-          Although other countries use the same or similar policy
called ‘cost-incentive based’ feed-in tariff with the support   instruments – a combination of feed-in-tariffs and
of municipal utilities. Some municipal utilities paid up to     subsidy programmes – none of them has experienced a
1,00 €/kWh for 0 years. The new HDTP in 1999 then              comparable market growth to Germany. The following pre-
defined the goal of installing 100.000 PV installations with    requisites were key success factors for the take-off of the
an average capacity of 3 kWp (300 MWp overall) and thus         German PV market:
triggered a mass market. “Soft loans” (with low interest        • The policy instruments must enable a reasonable pay-
rates) were granted to private and commercial investors in          back time for an investment in a PV system;
PV installations of > 1 kWp. Further strategic goals of the     • The policy framework must ensure stability and long-
programme were 1) the increase of production capacities             term commitment for PV support (to gain the confidence
in Germany and ) the reduction of production cost for PV           of investors).
modules. In the first place, the HDTP alone did not have        • The administrative effort to install and operate a PV
an enormous impact on the PV market since at the time it            system has to be very small in order not to deter
was still far from ensuring profitability of PV investments         potential customers
in combination with the old feed-in-tariff of merely 8,5 €ct/   These points were fulfilled in Germany. With relatively
kWh (under the old “Feed-in-Law).                               high feed-in tariffs guaranteed for 0 years, PV is an
Full payback of investment costs was actually not               economically sound investment. Furthermore, the
achieved until the new EEG, launched in 000, introduced        legislation has no expiry date. Under these conditions, the
much higher tariffs. In addition, by means of an annual         PV industry and investors can enjoy long-term stability,
reduction rate of feed-in-tariffs from 00 onwards it          which is essential for market growth.
offered PV suppliers effective incentives for cost reduction    In Austria for example, a feed-in-law was established
of modules, components and systems. The original limit          together with provincial and national support schemes.
of the EEG – a maximum capacity of 350 MWp – was                But given a cap of 15 MW of installed PV under the feed-
increased to 1.000 MWp when the law was amended by              in-law, market growth came to a sudden halt after only a
the German parliament on 7 June 00. No cap is in place        short time (“stop & go effect”). In Germany, such a cap
any longer.                                                     does not exist.
The year 003 was characterised by the end of the               In other countries such as the Netherlands, the feed-
HTDP programme and a discussion on a new feed-in-               in tariffs are too low. Especially for small investors the
tariff legislation that was supposed to be implemented by       investment in a PV system is economically unattractive.
means of an amendment of the EEG. In 00 the HTDP              Therefores Dutch market growth rate has remained fairly
had provided soft loans for 80 MWp of PV installations, in      low (7 %).
003 budgets for further 149 MWp were granted.                  In Japan we can see that other policy instruments can also
In fact, since the 1st of January 004 there a new feed-in      successfully accelerate market growth. Unlike Germany,
tariff for PV electricity replaced the investment subsidies     there is no feed-in-tariff but only average electricity prices
under the HTDP programme. The new EEG left the                  for grid-connected PV. Nevertheless, subsidy programmes
base tariff for PV electricity from plants installed in 004    and fiscal incentives have triggered a PV market, which
at 45,7 €cent/kWh. PV installations on buildings up to          was the largest one worldwide for several years. In Japan
30 kWp now received a higher tariff of 57,4 €cent/kWh,          the above mentioned pre-requisites for a sustainable
installations between 30 kWp and 100 kWp 54,6 €cent/            market take-off were met in a different way: a reasonable
kWh and installations > 100 kWp 54,0 €cent/kWh. An              payback time and long-term commitment of the Japanese
additional bonus of 5 €cent/kWh was granted to building-        government.
integrated PV installations. The original maximum               Yet another policy system for PV has been established
capacity limit for “free-standing” plants was abolished,        in the UK in which a quota obligations system is
and therefore effective incentives for investments in large     combined with investment subsidies. PV in the UK grows
solar parks were introduced. The tariff is guaranteed over      with acceptable rates but the market is still very small
0 years. Plants installed in 005 receive a tariff that is     compared to Germany. The main problem in the UK is the
reduced by 5 % annually, guaranteed over 0 years.              lack of a long-term commitment to PV which is reflected
Due to this regulation stable growth of the German PV           in its policy. The quota system clearly favours other
market can be expected also for the future. Overall the key     renewable technologies such as wind energy. The UK
success factors of the national PV policy framework can         system is “technology-neutral” and tends to encourage
be summarised as follows:                                       the development of lower-cost technologies that are
• grid operators are legally obliged to connect PV plants       closer to competitiveness in their development stage –
    to the grid and to feed-in and remunerate the electricity   which up to now is not the case for PV. As a result, PV
    produced according to the EEG regulations;                  market development in the UK relies mainly on investment



                                       C. Benchmark Analysis – comparison of 1 national PV policy frameworks            83
subsidy programmes that by definition are limited to a
fairly short period of time.
Public Private Partnership – National RTD programme for
PV applications and development projects in Sweden:
• Phase I: 000–00; Phase II: 003–005; Phase III:
    005–007
• Financed with approximately € 500.000 per phase
    through public funds that are administered by the
    Swedish Energy Agency and investments from various
    industrial partners (module manufacturers, construction
    industry, utilities etc.);
• Professional management and competent coordination
    of the programme through the jointly owned “Research
    and Development Organisation of Swedish Utilities”
    (Elforsk AB)
• Major contribution to PV market development to date:
    – Initiation and funding of BIPV demonstration
        projects
    – Investigation of system integration and grid
        connection issues
    – Market analysis (IEA-PVPS, conferences etc.)
    – Information and education of market actors
        (seminars & reports)
    – Support of industry formation (Scandinavian PV
        Industry Association)
    – Research of PV technology from social scientific
        perspective




3.2 National PV industry development

By promoting PV, one of the objectives of the national
governments is to establish a prosperous national industry
with long-term perspectives. The potential to grow, yield
profits and create jobs often justifies the large amount of
subsidies. Four performance criteria and indicators were
defined for this assessment area:
• National module (or cell) production capacities
   (measured in MWp in 003 and 004)
• Annual industry sales (Mio. €/year in 003/004)
• Annual industry investments (Mio. €/year in 003/
   004)

Employment (numbers of employees in 003/004) – there
is a differentiation between “employment PV industry”
and “Employment total”. The latter includes all jobs that
are linked to PV but are not directly associated to the PV
industry, such as jobs in distribution, installation and in the
supply industry (e.g. glass industry, cables etc.)




 84    PV Policy Group – European Best Practice Report
Performance measurement
Performance        Module (cell)      Annual industry       Annual industry       Employment             Employment
criterion          production         sales                 investments           PV Industry            Total
                   capacities
Performance        MWp                Mio €/year            Mio. €/year           Number                 Number
indicator                                                                         of employees           of employees
Reference year     003     004      003      004        003        004      003     004          004
Austria            3,6      > 9,0     105,0     145,0       n.k.        n.k.      00       340          695
France             14,6     30,6      51,0      96,6        15,0        15,0      500       570          750
Germany            83,0     200,0     650,0     1.150       150,0       200,0     3.500     4.400        10.000–12.000
Greece             0,0      0,0       3,0       3,3         0,5         1,5       60        70           n.k.
Italy              4,3      8,4       n.k.      n.k.        n.k.        n.k.      750       750          n.k.
Japan              511      n.k.      1.268     n.k.        n.k.        n.k.      n.k.      n.k.         11.300
Netherlands        0,0      15,0      350,0     59,0        n.k.        n.k.      430       57          430
Portugal           n.k.     n.k.      n.k.      n.k.        n.k.        n.k.      n.k.      175          n.k.
Slovenia           –        –         –         –           –           –         –         –            10
Spain              95,0     150,0     n.k.      n.k.        n.k.        24,2      4.020     5.528        n.k.
Sweden             n.k.     49        6,9       n.k.        1,81        n.k.      155       n.k.         n.k.
UK                 n.k.     49,5      n.k.      115         n.k.        n.k.      n.k.      38          580

          Nr. 1 (= Benchmark)

Benchmark definition
Benchmarks for a successful “national PV industry
development” are Germany and Japan. Germany is used
as benchmark because comprehensive background
information is available and Germany is a country partner
within the project.
Germany has managed to develop a very strong and
leading European PV industry:

Indicators                                                                       2003            2004           2005
                                                                                                                estimated
National module production (in MWp) + growth rate (in %)                         83              00            5
National cell production (in MWp) + growth rate (in %)                           100             187,4          300
National wafer production (in MWp) + growth rate (in %)                          10             150            180
National inverter production capacity (in MWp) + growth rate (in %)                              705
Annual sales of national PV industry (German module, cell, wafer, and            650             1.150          1.500
inverter manufacturers) (in Mio €) + growth rate (in %)
Annual investments of national PV industry (in Mio. €) + growth rate (in %)      150             00            00
Number of employees in national PV industry + growth rate (in %)                 3.500           4.400          5.000
Quelle: BSi (2005); UVS (2004)

Production structures:                                          With an average share of approx 70 % the cost of the
Due to the strong dominance of grid-connected systems           solar module dominates in the cost distribution structure
the Germany PV industry consists of the following groups        for grid-connected PV systems. This fact also explains
of manufacturers:                                               the economic dominance of wafer, cell and module
• Solar silicon producers                                       manufacturing along the overall value chain of the sector.
• Wafer producers                                               The second important product group are solar inverters.
• Cell producers                                                In the global context, the solar cell industry is widely
• Module producers                                              dominated by large, multinational groups. However, in
• Solar inverter producers                                      Germany solar cells are also produced with great success
• Solar charge controller producers                             by various medium-sized, independent players. In 003
• Other solar component producers (mounting systems,            there were about 30 German companies dedicated to
   cables etc.)                                                 the production of solar silicon, wafers, cells and modules.
                                                                There are many cases of outsourcing or cross-selling
                                                                relationships in the sector, so that a clear separation of
                                                                manufacturers and wholesellers is often difficult.


                                    C. Benchmark Analysis – comparison of 1 national PV policy frameworks               85
In the last years German PV industry has experienced            in comparison to all other countries because of the early
an industrialisation phase towards more professionalism         and massive support for the PV market as well as PV
and mass production during which the innovation rate            research & development. The German PV industry was
has been considerable. Due to high increases in market          given the chance to make important steps towards mass
volumes more than 1 Billion Euro was invested in setting        production and more professionalism. These efforts now
up or increasing solar silicon, wafer, cell and module          result in a reduction of production costs and make the
production capacities. In the inverter and charge controller    German PV industry highly competitive.
sector German manufacturers are market leaders also on          Japan also had favourable preconditions that led to the
a global scale. Also, most mounting systems and balance-        development of a very strong PV industry, especially in the
of-system components across the world are “Made in              area of cell and module production. It is worth mentioning
Germany”, e.g. inverters.                                       that several Japanese manufacturers are opening
Due to this development a considerable cost reduction           assembly lines in Europe – however, not in Germany
(over 0 % since 1999) and quality increase of PV systems       although they mainly produce for the German market.
could be achieved. In addition, German companies are            In 004, the PV cluster was established in Slovenia,
following an aggressive international expansion path.           joining together three faculties, four energy companies
A high degree of innovation, fostered by a boom in market       and twelve companies from industry and engineering.
demand (= higher prices and profit margins) and very            The main objective of the cluster is the support of a rapid
good financial situation of companies (high cash flow from      development of the PV market and the collaboration
ongoing operations, good access to financing sources on         between industry and research institutions. The main
the capital market etc.) on the one hand, a bottleneck          achievement of this collaboration is spread of information,
in silicon procurement (= overcapacities, increasing            start-up of deployment of the PV market and the ongoing
purchase prices) on the other hand are the key driving          investment of the company Blues, for a production line of
forces for the industry. Annual cost reductions of 5 %          PV modules with the annual capacity of 15 MW.
p.a. as required by the EEG are thus enabled, but also          Following the establishment of the European Technology
high investments in upstream integration (solar silicon         Platform for Photovoltaics in 005 the Ministry for
production!) and more efficient technologies (e.g. thin         Education and Research decided to support a similar
film, new production processes).                                structure also in Slovenia. In late 005 the PV cluster
                                                                was transformed in the PV platform with the aim to
Distribution structures:                                        spread important information through the web-site and
There are three typical distribution channels of PV system      other means and support domestic and international
integrators in Germany:                                         collaboration of researchers, developers and industry.
1. Direct supply of a wholeseller network that sells to
   installers and end-users;
. Direct supply of retailers, installers, craftsmen and end-
   users;                                                       3.3 National PV price development
3. Direct acquisition from end-users/investors (e.g. via
   sales personnel).                                            PV price development is a crucial topic. Instead of
                                                                illustrating the National PV price trend, a European PV
The first two channels are mainly used by large suppliers.      price trend is presented in this chapter.
Their distribution network covers the whole country, while
a strong regional presence is ensured by geographic re-         Performance measurement
presentatives and close ties to local installers and crafts-    Capturing an overall national price level for PV modules
men. Smaller firms that cannot afford setting up and man-       or systems for each country is a complex undertaking.
aging such nationwide distribution networks, focus on the       Prices differ considerably from project to project, as well
direct acquisition of projects in their regional proximity.     as from supplier to supplier. In addition, the procurement
                                                                market for PV modules and components is international,
Differences between benchmark and other countries               so that price differences for single countries are soon
The basis for a sustainable national industry development       levelled out. Even if industry associations or the IEA-PVPS
is “critical mass” in terms of market growth and                publish such average price data, it would be misleading to
perspectives:                                                   compare these data 1:1 in a benchmark analysis between
• Strong and viable PV market                                   countries.
• Long-term perspectives are needed to justify high             Nevertheless, it is important to consider the effects of
   investments in production facilities (< 4 years support      national policy frameworks on price levels, though in a
   programmes are clearly not sufficient);                      broader manner than with previous assessment criteria.
• Qualified staff must be available for the installation of     In Europe, the prices for PV systems (up to 10 kW grid-
   high-tech production facilities.                             connected) have been halved since 1991 and the same is
                                                                valid for crystalline PV modules. The European PV sector
With regard to national PV industry development, no             is facing a global mechanism following international rules.
other European country shows the same effectiveness             We choose the most competitive market with a large
as Germany. Of course, a strong industry capitalises            number of market players for presenting cost trends. The
on a strong home market. In this respect, Germany has           price development is driven by a high demand and on the
the perfect conditions, also since it is a large country. In    other hand since 004 by a shortage of silicon which has
addition, the German PV industry has had a head start           driven a price increase of more than 0 %.


 86    PV Policy Group – European Best Practice Report
The figure below illustrates the value chain of a PV
application/system. Silicon material has a high share for
producing the Ingots > Wafers > Cells > PV modules.




     Solar Silicon          Ingots              Wafer             Cells              Modules          PV Systems




Figure C2-3: Value chain in PV system

The most relevant component of a PV module is the
feedstock material silicon, which has a high cost share in
a PV module. Likewise, PV modules have a cost share of
approx. 70 % of a PV system (see Figure below).


                                                Components for PV Systems
            15%

                                                 Semiconductor materials and cell,
      7%                                         laminate and module production

                                                 BOS – DC/AC
     8%
                                                 BOS – others
                              70%
                                                 Installation




Figure C2-4: Cost share in a PV System (source: Dr. Winfried Hoffmann, RWE Schott Solar, 07/05)


Since 00, the average price for silicon has doubled.
There are different silicon materials on the market and
the price has developed differently. To provide a European
price trend the following weighted average price is
illustrated in the Figure below.

US$/kg
45

40

35

30

25

20

15

10

 5
      20     20      20     20       20    20     22    24,2 26,62    30     40
 0
     1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005                            year

Figure C2-5: Weighted Average European Silicon Prices (Source: Dr. Hubert Aulich, PV Silicon, EPIA)


                                      C. Benchmark Analysis – comparison of 1 national PV policy frameworks   87
The positive effects of a successful PV policy framework on
national price levels for PV systems can be demonstrated
by the example of Germany. Though the price of silicon
has increased over the last five years, the PV industry
could compensate the price trend for PV modules and PV
systems until 004 (see Figures below).
This was possible through the production learning curve
(economies of scale) and the price decrease of other
components (e.g. inverters). In addition, installation costs
have been reduced by standardized rapid installation
procedures. On the other hand, manufacturers are
improving the production efficiency by reducing the use of
materials and optimising the production processes. All the
reductions are performed by maintaining a certain quality
standard. Industry analysts have stated that within the
next two years the prices of systems will increase slightly
through the high demand and shortage of silicon followed
by a market recovery and further price reductions.
Most of the European PV manufacturers produce for the
largest market in Europe, which is Germany. Therefore,
the use of the German price trends for a European price
development is adequate. The whole European PV sector
(from equipment suppliers to installers) is committed to a
5 % reduction per year.

Euro per Wp
7

6

5

4

3

2

1
         6     5,9   5,4   4,9   4,5   4,1   3,7   3,6   3,6   3,5   3   2,8   3
0
     1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004              year

Figure C2-6: Weighted European Price Development for PV Modules (Source: EPIA, IEA)




    88       PV Policy Group – European Best Practice Report
Euro per kW
12000


10000


 8000


 6000


 4000


 2000
         10750 10250 9900 9250 8400 7700 7050 6550 6200 6600 6400 5600 5100 5300

     0
         1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004                year


Figure C2-7: Weighted European Price Development for Grid-connected PV systems (Source: EPIA, IEA)

Figure C-8 shows the comparison of PV module prices
in Japan, USA and Europe.


Euro per W                              Japan          Europa         USA
8
7
6
5
4
3
2
1
0
    1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004                    year

Figure C2-8: Price development of PV modules in Japan, USA and Europe (Source: IEA)

The feed-in-tariff guaranteed by the EEG is reduced by        • If there are not enough competitive retailers/installers
5 % p.a. for roof-top-installations (6,5 % for ground-based     on the market, no price reduction can be achieved as
installations) to reflect cost reductions.                      no competition exist
In 00 small-scale installations with a capacity <  kWp     • Large number of market players required to cover all
were by a third more expensive than large-scale                 regional areas; leads to increased competition.
installations > 0 kWp. This effect is due to fixed cost      • High subsidies per kWp counteract cost reduction as the
elements and is predominant mainly in the installation cost     market works towards the limit of subsidies available
block, but also relevant for specific hardware cost such      • The entire value chain of the PV sector must be
as generator costs as those decrease considerably with          involved, important: also suppliers, to achieve a
the increase in size of a system. This decrease effect has      price reduction, e.g. 5 % in Germany, but it has to be
to be considered when analysing the cost development            an adequate reduction, if it is too low it leads to less
over time. Only costs for systems of similar sizes should       demand and if it is too high the market will not be able
be compared. This leads to a nominal cost reduction of          to handle the demand. The reduction rate is crucial!!
approx. 4 % in the lifetime of the programme. This number
corresponds to an annual decrease of 6,6 %

Conclusions
Overall, the following key conclusions can be drawn with
regard to the requirements for achieving effective price
reductions in a national context – as noticed in Germany:
• To achieve cost reduction via the learning curve
   ambitious targets of market deployment have to be
   set


                                     C. Benchmark Analysis – comparison of 1 national PV policy frameworks        89
3.4 National PV image and acceptance                           affected by increasing polemics from political opponents
                                                               against wind energy. The broad acceptance and wish for
In the following chapter, the overall national PV policy       renewable energy supply is reflected in several public-
frameworks are assessed, which covers the image and            opinion polls. The Institut für Demoskopie in Allensbach
acceptance of PV with various stakeholders (general            asked in autumn 004: With which resources shall energy
public, politicians and the acceptance of relevant policy      supply primarily be assured in 0 to 30 years 71 % of
issues amongst the PV industry).                               participants mentioned solar energy, followed by wind
Three performance criteria and indicators were defined         energy (57 %) and hydro power (44 %). 35 % believe in
for this assessment area:                                      natural gas, 1 % want nuclear power, 14 % petroleum and
• PV acceptance by the general public (measured by             only 6 % coal. Forsa – an institute for social research and
   qualitative estimation)                                     statistical analyses – interviewed 1.000 individuals in April
• PV acceptance by politicians (measured by qualitative        005. They found that 5 % of the interviewees would like
   estimation)                                                 to maintain the level of support for Renewable Energy and
• Policy acceptance by PV industry (measured by                6 % demanded stronger support for Renewables. Only
   qualitative estimation)                                     4 % would reduce or abolish support schemes. For the
                                                               vast majority subsidies for Renewable Energies are not a
Performance measurement                                        controversial issue.
Performance PV accep-          PV accep-      Policy ac-
criterion   tance by           tance by       ceptance         Differences between benchmark and other countries
            general            politics       of PV in-        The good image/acceptance of PV and the strong political-
            public                            dustry           legal support for PV are positively influence each another
Performance Qualitative        Qualitative    Qualitative      in Germany. Photovoltaics were introduced by the 1.000
indicator   estimation         estimation     estimation       Roofs PV programme a long time ago. This demonstration
            based on           based on       based on         programme raised the awareness of the general public
            interviews         interviews     interviews       concerning PV. Through the introduction of the feed-in
Austria     +++                ++             ++               law PV systems became economically profitable, which
France           ++            +              +                definitely enhanced the image and acceptance amongst
                                                               the population. The broad acceptance also encouraged
Germany          +++           +++            +++
                                                               the government to further support PV. In general, the
Greece           +++           ++             +                centre-left (“red-green”) government provided a very
Italy            +             ++             ++               good climate for PV and other renewables in the last
Japan            +++           +++            +++              years with the planned phasing out of nuclear energy and
                                                               the support for alternative energies. The nuclear industry
Netherlands      +++           +              +
                                                               attempted to solve its acceptance problem by mentioning
Portugal         +             ++             ++               nuclear energy in the same breath with solar, wind and
Slovenia         +             +              +                hydropower. However, this attempt did not result in
Spain            ++            +++            +++              larger acceptance of nuclear power, but rather led to the
Sweden           ++            +              +                mainstream acceptance of renewables as viable energy
                                                               sources. Important to mention is also that the motivation
UK               ++            ++             +
                                                               of the German public for PV is not merely financial but
                                                               also has an ecological background.
         Nr. 1 (= Benchmark)                                   In many other European countries PV also has a positive
                                                               image. Despite this fact, that tendency is not reflected in
Note: For the above Performance Measurement on                 actual PV market growth. The main reasons are either
‘qualitative estimations’ and several of the following         missing/insufficient support mechanisms or the fact that
assessments followed the categories between + and              people are unaware of such incentives. In addition, many
+++, because absolute values were not possible. This           people have the prejudice that PV is too expensive. A
evaluation is a relative estimation and allows for a rough     positive image does not necessarily mean that people are
comparison of the situation in the countries considered.       willing to invest in PV. Awareness campaigns may be a
The assessment was conducted by the core group of              good instrument for promoting PV support schemes and
experts based on available information about the situation     feed-in tariffs, in order to enhance the investment climate
in all countries. The comment n.k. means that too little       for PV.
information or no information at all was available.

Benchmark definition
In the following analysis we mainly consider the general
public where to some extent also quantitative date
is available. That is not the case for the acceptance of
politics and the PV industry (only qualitative estimations).
Again the European benchmark for a broad acceptance
of PV by relevant target groups is Germany: In Germany
image and acceptance of PV – and of renewable energy in
general – has been excellent for several years. It is hardly


 90     PV Policy Group – European Best Practice Report
d. EuRoPEAn BESt PRACtICE AnAlySIS –
tRAnSnAtIonAl ConCluSIonS


This chapter draws the key conclusions from the analysis and comparison of 1 national policy frameworks in the
previous chapters. These conclusions are relevant independently from the national context and are summarised under
the headings:
• Overall best practices for national PV policy frameworks
• Key success factors (drivers) for national PV policy frameworks
• Key risk factors (barriers) for national PV policy frameworks




                                             D. European Best Practice Analysis – transnational conclusions   91
1. Overview – National PV policy frameworks

An overview of the different policy instruments in the
countries observed is given in the table below. One
can observe that it is usually a combination of several
instruments that makes a successful PV promotion
package. Nevertheless, in most countries one or two
instruments dominate over others.
As a performance indicator the installed PV capacity in
004 is listed for every country.
The table also shows that the effectiveness of policies
depend on how well they are designed and embedded.
The use of a particular policy type does not automatically
guarantee a growing market.
The following figure shows the European potential for PV
market growth until 010. The estimations are based on a
business as usual model and also consider the shortage
of silicon within the upcoming years. High market
growth is needed to achieve a significant cost reduction
through economies of scale and also reduce material by
increasing efficiency of solar cells, decreased thickness
of silicon wafers and further technology developments in
production processes.

                      Enhanced                Direct    Soft         Tax Re-   Green   Quota     Newly in-
                      Feed-in tariffs         capital   Loans        liefs     Elec-   Systems   stalled in
                                              invest-                          tricity           2004
                                              ment                             Schemes           (MWp/year)
                                              subsidies
Austria               47/60 €ct/kWh1)            X             X²)       X        X                   ,30
France                14,17/8,34 €ct/kWh3)      X                       X        X                   5,90
Germany               43,42–54,53 €ct/kWh                      X6)
                                                                         X        X                 450,00
Greece                                           X                                                    1,00
Italy   6)
                                                 X                       X                            6,00
Japan                                            X             X4)
                                                                                  X       X         7,00
Netherlands           30–40 €ct/kWh                                      X        X                   3,0
Portugal              35/5 €ct/kWh                            X         X                            0,57
Slovenia              37/6,5 €ct/kWh             X             X                                      0,01
Spain                 41,44/21,99 €ct/kWh8)      X             X         X                           10,00
Sweden                                           X   5)
                                                                         X        X       X           0,9
UK                                               X                       X                X           ,6
1)
   Cap of 15 MW has been reached and the PV market practically stalled by mid 005
²) In some provinces
3)
   France Mainland and Overseas
4)
   interest reduced mortgages for homes with PV
5)
   Only for public buildings
6)
   4,5 % interest rate via DBU
7)
   Feed-in tariff in place since August 005 Installations not before 006
8)
   Feed-in tariff in place since April 004




 9          PV Policy Group – European Best Practice Report
Cumulative installed PV power in Europe [MWP]

9000
                                                          Europe              Europe (BPR)
8000




                                                                                                                   8066
7000




                                                                                                            7147
                                                                                                     6331
6000




                                                                                              5651
5000




                                                                                       4882
                                                                            4416
4000




                                                                     3661
                                                              3388
3000


                                                       2626
                                                2525
2000
                                         1733
              658
        618




                                  1656




1000
                           1163
                    1105




    0
         2003       2004           2005          2006          2007          2008              2009          2010

Figure D1-1. Estimation of the cumulative installed PV power in Europe until 2010. (Source: EPIA, IEA)

To achieve the goals the key success and risk factors are
compiled in the following chapter.




2. Key success factors
for national PV policy frameworks

Overall PV strategy and framework                                                        investors; these projects should be aesthetical and
• Ambitious, long-term targets for PV market development                                 visible to the public;
  (e.g. until 010, 00) provide orientation for the PV                           •     A strong PV RTD programme supports further
  industry and investors;                                                                development and cost reduction of PV systems and
• A consistent PV strategy based on ambitious targets,                                   thus indirectly also the PV market;
  a clearly defined implementation programme and a                                 •     Option to participate in the liberalised energy market
  well-conceived mix of instruments as a foundation for                                  can foster the integration with the conventional energy
  success; at the same time, politicians have to ensure                                  market;
  the commitment of relevant authorities on federal,                               •     An attractive PV promotion scheme can have a very
  regional and local levels that are key actors in putting                               positive “PR effect” to wake up the demand side in an
  the strategy and programmes into practice;                                             early stage of market development (e.g. in Japan);
• A feed-in-tariff system – or other effective instruments                         •     A reasonable combination of different promotions
  – combining attractiveness of conditions with long-                                    schemes is highly effective especially in the early
  term investor security leads to the creation of strong                                 stages of PV market growth; for example, limited
  demand and sustainable market growth;                                                  subsidies by regional / provincial / local authorities
• A feed-in tariff intrinsically takes care of quality control                           are appropriate instruments to complement a national
  of PV systems;                                                                         feed-in-tariff system over a limited period of time (e.g.
• Tax incentives with long-term perspectives have the                                    5 years).
  “charme” of being far less bureaucratic and time-
  consuming than direct subsidy programmes – an                                    PV legislation (feed-in laws)
  advantage especially acknowledged by professional                                • The tariff system must be attractive enough to enable
  investors and promoters;                                                           profitability with a reasonable payback time;
• A net metering system is easy to implement and may                               • Essential success factor for an effective fixed feed-in
  be effective in the segment for small-scale systems (<                             tariff is the exact, country-specific calculation of the
  0 kWp) installed on the rooftops;                                                 threshold for the profitable operation of a plant (break-
• Solar building obligations are a powerful regulatory                               even point) + 5–6 % risk surplus. Market demand
  instrument as long as rooftop or façade-integrated                                 does not respond proportionally to the amount of the
  PV systems are acknowledged to meet the respective                                 feed-in-tariff (as politicians tend to think), but very
  energy standards;                                                                  sensitively to the slightest investment barriers. The
• Demonstration by public authorities (e.g. municipalities)                          market mechanism may be visualised by the following
  can be very effective “shining examples” for private                               chart referring to the German context:



                                                              D. European Best Practice Analysis – transnational conclusions                 93
• The tariffs should be differentiated according to type          industry in the process of dynamic market development;
  of installations and natural conditions (specific solar         it also acts as an insurance that these gains are actually
  yields);                                                        passed on to the investors; an annual adaptation of the
• Long-term security for investors is absolutely key to           feed-in-tariffs to the inflation rate is also well-conceived
  win the confidence of the industry; the tariffs must            by investors;
  be legally guaranteed over a long-term period, e.g. a         • Stringent, yet efficient administrative procedures
  period between 15–5 years;                                     (authorisation, grid connection, etc.), avoiding un-
• There should not be too many limitations with regard            certainties and long lead times for promoters/investors
  to the type/number of installations admitted to the tariff      are compulsory to complement a feed-in-tariff system
  system; for instance, there should be no total installation     in practice;
  cap (or alternatively a sufficiently ambitious one); no       • The feed-in-tariff system should be made transparent
  maximum capacity of installations; no exclusion of              by monitoring the solar electricity fed into the grid.
  free-standing or building integrated installations etc.;        “Extra costs” for renewable energies should appear on
• A decrease mechanism (e.g.  % p.a.) is an appropriate          the electricity bill of consumers.
  measure to reflect efficiency gains achieved by the PV


        PV Installation Capacity [MWp]



300




100




 10


                   40   ct         45    ct         50   ct         55   ct    Feed-in-tariff EEG

Figure D2-1: PV market mechanism in Germany

PV support schemes
• To be an effective incentive for investors, a minimum of      • The requirements to obtain subsidies should be linked
  investment cost must be covered by grants (depends              to quality standards for installations and installers
  on the other incentives within the PV (or RE) support           (accreditation, minimum warranty on the system), as
  package;                                                        well as effective monitoring / control mechanisms.
• Soft loan schemes need the support of a sufficient
  number of commercial banks supporting the financing           PV monitoring systems
  and application process; interest rates must be below         • An advanced approach to market monitoring and policy
  commercial levels;                                              performance measurement, applying a consistent
• Similarly, the combination of different instruments             methodology and professional tools to collect, evaluate
  (e.g. grant, soft loan and/or liability exemption by the        and disseminate data, is a pre-requisite for effective
  state) is usually highly motivating for investors that are      policy control and acceptance by target actors as well
  generally considered risk-averse;                               as to secure long term political support;
• Subsidy schemes remain the most effective instrument          • A national plant register delivers the most accurate
  for the promotion of the off-grid market; this segment          basis for monitoring the grid-connected PV market;
  should not be neglected following the introduction of a         the rest of the market (e.g. off-grid segment) may
  feed-in-law that is specifically designed to promote the        be covered by evaluation of support schemes and
  grid-connected market;                                          surveys.
• Secured public budgets underlying the support scheme
  over its entire lifetime are crucial to avoid “stop & go”
  effects; this is also an important argument in favour of
  soft loan schemes;




 94    PV Policy Group – European Best Practice Report
3. Key barriers / risk factors                                      & go” effects, changes should be announced well in
for national PV policy frameworks                                   advance;
                                                                •   Very often feed-in-tariffs are simply too low / unattractive
Overall PV strategy and framework                                   to ensure a reasonable payback time for investors;
• In most EU countries PV is not top on the agenda;             •   Non-differentiation of tariffs between different RES
  there is a lack of long-term political vision and strategy;       technologies often leads to unfavourable conditions for
  political initiatives (e.g. a support scheme) are often not       PV;
  backed by strong political commitment, resulting in lack      •   large-scale projects (“megawatt class”) are frequently
  of stability over the medium and long term; following             excluded by feed-in-tariff systems, which limits market
  government changes, policies are questioned and                   growth;
  even aborted, which may destroy a growing market              •   The lack of any differentiation of feed-in-tariffs for
  from one day to the next;                                         areas with different solar yields will lead to an unequal
• Permanent exposure to complex political decision-                 distribution of PV. Tariffs in regions with high irradiation
  making and/or consultation processes (e.g. annual                 levels do not need to be as high as in less favorable
  review of systems) reduces investment security;                   regions. That way efficiency can be increased and
  instead a long-term strategy should be implemented                windfall profits reduced. Usually there is no specific
  under involvement of a large number of political parties          feed-in-tariff for building-integrated PV installations
  and key actors;                                                   (BIPV).
• Very often the policy framework and its instruments           •   Enhanced tariffs should be guaranteed for a period of
  are inconsistent. This results in confusing bureaucratic          at least 10 years;
  regulations, time-consuming licensing processes,              •   High administrative (or financial) requirements to
  and difficult access to the grid, which finally leads to          capitalise on a feed-in-tariff system (e.g. complicated
  deterring potential investors;                                    registration, advance payment of a deposit) may
• Often authorities in charge of permits are unprepared             render participation economically unfeasible or too
  to handle procedures efficiently, so the lead time for            risky especially for small investors; these are market
  promoters is very high; promoters often have to deal              barriers favouring large actors (e.g. utilities);
  with more than 3 authorities independently which              •   Investors (or promoters) should not have to deal with
  multiplies the administrative hassle;                             too many authorities and different regulatory contexts;
• Political decision-makers are frequently overwhelmed              especially local grid operators should be forced to
  by sudden market growth, then forced to “retreat” if              submit to national regulatory standards for connecting
  limits (e.g. in terms of budgets) are reached;                    PV plants to the grid;
• Decentralised processes managed by regional or local
  bodies are generally more efficient, but less predictable     PV support schemes
  and homogeneous than centralised processes                    • A badly managed subsidy programme can actually
  managed or controlled by a national authority (e.g.             paralyse an entire market, if all investors are completely
  electricity sector regulator, transmission grid operator        driven by obtaining subsidies, but this demand cannot
  or energy agency); often single regions put common              be met due to limited budgets or administrative
  regulations into practice in a very different way; this         barriers;
  leads to inefficiencies and confusion among market            • Without an effective awareness campaign, subsidy
  actors;                                                         schemes run the risk of being ignored by the target
• Tax credit schemes generally offer no long-term                 group;
  security for investors;                                       • Subsidy schemes – usually depending on governmental
• For small investors the delays in actually realising            budgets – are often of short-term nature, failing to
  the financial incentives after the annual income tax            create a sustainable market development and win
  declaration are disadvantageous;                                investor confidence. Since public budgets are always
• Competitive mechanisms (e.g. call-for-tenders)                  tight and exposed to regular tensions, unnecessary
  for larger-scale installations (> 50 kWp) usually               delays and “stop & go” effects can arise;
  favour utilities that are able to offer lower tariffs than    • Due to the generally limited budgets the subsidy
  commercially driven private investors; they often lead          programmes cannot satisfy the existing demand;
  to high concentration of market shares;                         so only a small percentage of applications may be
• Non-technology specific quota systems have not                  accepted overall; refused projects are discarded by
  proved effective for promoting PV – they rather favour          investors more often than not;
  more developed RES technologies (e.g. wind), larger-          • Complex administrative procedures both for general
  scale plants and are less suited for small investors.           authorisation and subsidy applications block the
                                                                  effectiveness of subsidy programmes; a main reason
PV legislation (feed-in laws)                                     for this common effect are technically unprepared
• A cap of maximum capacity (in MWp) is always an                 authorities (or banks, agencies) on the regional or local
  artificial market barrier that may block a promising            level;
  early growth stage of market development; even if a           • Mostly programmes do not require effective monitoring
  cap may be lifted by political decision this process            systems for performance measurement of the plants;
  creates unnecessary “stop & go” effects and puts off            it carries the risk that part of the PV plants fall short of
  investments. The same can happen when a review                  intended or claimed performance standards;
  of the promotion system comes closer. To avoid “stop


                                                  D. European Best Practice Analysis – transnational conclusions           95
• Few application deadlines (e.g. only twice a year) often
  lead to a high amount of applications virtually blocking
  the entire programme for further applicants (“first come,
  first serve”);
• In some cases the exclusion of certain groups of
  applicants (e.g. private individuals), minimum thresholds
  for investments (e.g. € 5.000) or insufficient levels
  of subsidies exclude small investors and avoid the
  development of a mass market (e.g. roof-top systems
  on private houses).

PV monitoring systems
• Insufficient PV market and policy monitoring makes
  effective policy control impossible;
• Data bases used by different institutions are neither
  complete nor consistent (e.g. peak power vs. rated
  output of converter); the same applies to monitoring
  targets/performance indicators;
• Politicians are often afraid of losing control of
  developments if no budget limits or review dates are
  fixed; if there are no effective control mechanisms
  in place, it is hard to convince them of a long-term
  commitment;
• Sound market monitoring often stops as soon as
  national support schemes have expired or are
  reduced;
• Especially the off-grid market is generally not monitored
  in a professional way;
• Monitoring approaches usually do not consider import/
  export movements across national frontiers, so that
  statistical data are inaccurate.




 96    PV Policy Group – European Best Practice Report
E. outlook


This European Best Practice Report on national support
schemes, PV regulatory frameworks and monitoring
systems delivers a comprehensive and coherent basis
for further steps within the PV Policy Group project: The
Core Group’s assessment, exchange and action planning
processes. The European Core Group itself is split into
two types of sub-groups:
• On the national level the respective energy agencies
   as “National Contact Points” moderate intense
   consultation processes with key actors in the PV sector
   whose outcomes feed back to the European Core
   Group level
• On the thematic level, transnational Working Groups
   collaborate to draw conclusions from the Best Practice
   study and prepare conclusions, recommendations and
   policy proposals of the European Core Group with
   regard to effective political action in the aforementioned
   fields

During the first meeting of the thematic working groups
on 7 October 005 in Catania, rapporteurs for the three
groups were appointed. They are responsible for preparing
the documents of the working groups and report to the
leader of work package 5 (CRES).
• Thematic working group on regulatory frameworks:
   Franco Nemac (ApE), assisted by Pedro Paes (EDP/
   GAB), Jochen Fischer (Gaßner, Groth, Siederer &
   Coll) and Marc Jedliczka (Hespul)
• Thematic working group on support schemes: Job
   Swens (SenterNovem), assisted by Fabrice Juquois
   (ADEME) and Carlos Montoya (IDAE)
• Thematic working group on monitoring systems:
   Fabrice Juquois (ADEME) assisted by Andreas Veigl
   (AEA), Ingrid Weiss (WIP) and Christoph Urbschat
   (eclareon)

The thematic working groups of regulatory frameworks
and support schemes will work in close cooperation to
include cross cutting issues of their outcomes. Further
assessments of economic costs will be included in the
discussions and output. The following topics will be further
elaborated:
• Economic costs of support schemes and feed-in tariffs,
   including peak power demand and costs, macro-
   economic issues
• How to support other applications, such as off-grid
   applications, BIPV and other interest groups (e.g
   schools) if only the feed-in tariff system is in place
• Transparent monitoring on National and European
   level for policy and market

The outcomes from discussions on the European,
National and thematic level are finally merged to a joint
Action Plan and Position Paper directed to decision-
makers on both EU and national levels. Project results will
be disseminated across Europe.



                                                                E. Outlook   97
GloSSARy


Charge controller: Charge controllers are typically used           Photovoltaic (PV) System: A complete set of components
   in off-grid photovoltaic power systems. The primary                for converting sunlight into electricity by the photovoltaic
   function of a charge controller (or regulator) is to               process, including the array and balance of system
   maintain the battery at the highest possible State Of              components.
   Charge (SOC) and provide the user with the required             Silicon (Si): A chemical element, atomic number 14, semi-
   quantity of electricity, while protecting the battery from         metallic in nature, dark grey, an excellent semiconductor
   deep discharge (by the loads) or extended overcharge               material. A common constituent of sand and quartz (as
   (by the PV array). Additional features such as battery             the oxide). Crystallizes in face-centred cubic lattice like
   temperature or wire compensation, meters and alarms                a diamond. The most common semiconductor material
   can enhance the ability of the charge controller to meet           used in making photovoltaic devices.
   the load demand and extend battery lifetime.                    Solar Cell: A basic photovoltaic device, which generates
Electric Energy: The amount of work accomplished by                   electricity when exposed to a light source such as solar
   electrical power, usually measured in kilowatt-hours               radiation. All photovoltaic cells produce direct current
   (kWh). One kWh is 1.000 Watts and is equal to 3.413                (d.c.).
   Btu.                                                            Solar Wafer: A thin sheet of semiconductor material
Feed-in Law: A legal obligation on utilities to purchase              made by mechanically sawing it from a single-crystal
   electricity from renewable sources.                                or multi-crystal ingot or casting.
Feed-in Tariff: The price per unit of electricity that a utility
   or supplier has to pay for renewable electricity from
   private generators. The government regulates the tariff
   rate.
Grid-Connected PV system: A PV system in which the
   PV array acts as a central generating plant, supplying
   power to the grid.
Ingot: A mass of metal or semi-conducting material,
   heated past the melting point, and then recast, typically
   into the form of a bar or block.
Inverter: Device that converts direct current (d.c.) into
   alternating current (a.c.) either for stand-alone systems
   or to supply power to an electricity grid.
Off-grid PV System: System installed in households
   and villages that are not connected to the utility grid.
   Usually, a means to store electricity is used (most
   commonly lead-acid battery). Also known as “stand-
   alone photovoltaic power system”.
On-grid PV System: Systems connected to the utility
   grid.
Payback Time: The length of time it takes for the savings
   received to cover the cost of implementing the
   technology.
Photovoltaic (PV) Module or Panel: A solar photovoltaic
   product that generally consists of groups of PV cells
   electrically connected together to produce a specified
   power output under standard test conditions, mounted
   on a substrate, sealed with an encapsulate, and
   covered by protective glazing. Available as mounted
   on an aluminium frame. A junction box, on the back or
   underside of the module is used to allow for connecting
   the module circuit conductors to external conductors.
Photovoltaic (PV) Peak Power (Wp): PV modules are
   rated by their total power output. The peak power is
   the amount of power output a PV module produces at
   standard test conditions (STC) of a module operating
   temperature of 5 degrees Celsius in full sunshine
   (irradiance) of 1.000 watts per square meter. This is
   a clear summer day with sun approximately overhead
   and the cells faced directly towards the sun.


                                                                                                                Glossary     99
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