“Companies Will Always Be Interested in a Cost-Efficient Electricity Supply”

Expert Interview – January 23, 2023

The commercial sector naturally has a lot of surface area that is suitable for PV installations. There is great potential for producing large amounts of electricity, some of which could be used for a company’s own supply with climate-neutral energy. Installing PV systems is a great way of making the most of developed land. Despite all of these advantages, the low remuneration and too much red tape meant that the expansion of PV in commercial operations has been sluggish. In a more recent development, the spot price for electricity has surged, and given a boost to commercial PV installations.
We talked about this with Florian Schmidt, Team Lead Business Development & Operations Energy Solutions in the commercial and industrial segment at Hanwha Q CELLS GmbH.

Interview with Florian Schmidt

What are the planning and implementation steps that companies need to take in order to install large photovoltaics installations on commercial rooftops?

The first step is to establish which surface areas are available and whether they are suitable for PV. Another question is whether the company wants to make the investment, or whether a bank loan or a loan from a PV supplier is an option. Also, should the system be leased, or would energy contracting be a good option? Which applications are to be powered with the electricity produced by the PV system? The answer to that could be the company’s electricity supply only, or additional e-charging points, electricity-based heating supply, cooling/ventilation etc.

To determine how to match the PV production with the on-site consumption, it can be helpful to look at a load curve showing the electricity consumption across time (days, years).

With this information in hand, negotiations with a versed PV supplier can start. If a company has several sites, it might make sense to work with a company that operates nationwide and has both experience with PV and offers operator models, such as Qcells. A feasibility analysis will then reveal the ideal type and size of the installation, what the options in terms of operator models are, what permits are required, what else needs to be clarified (such as feed-in points), and how any surplus electricity can be sold.

If the analysis provides an attractive picture, the company will commission the PV partner, who will then implement the system in accordance with the company’s requirements. Ideally, the PV partner will also deal with any subsequent issues, such as the remuneration of any surplus electricity that is fed into the grid.

How does the planning process for commercial operations differ from that for private households?

The main differences may lie in financing requirements, tax appraisal, balancing of the system, permits required (e.g. construction permits for outdoor installations) and the determination of the feed-in point. For commercial applications, a transformer station may have to be built, systems above 135 kW may require certification and the surplus electricity needs to be sold.

What are the current technical trends for photovoltaics on commercial rooftops?

Everyone is talking about sector coupling. In the coming years, it will drive the electricity demand of companies. This will be the result of a switch to electricity in areas such as mobility or heating in order to save costs and reduce CO2 emissions. The rising demand should be taken into consideration right from the start of planning. Installations will tend to be rather big. To establish the ideal size, we need holistic concepts for electricity, heating and mobility, for the residual electricity supply, storage and selling of surplus electricity using hardware that monitors, optimizes and controls the system.

Which PV business models are currently the most popular for commercial applications, and which are the most profitable?

In view of the high costs for electricity and heating that we are currently seeing, the answer is buying a system to generate plannable amounts of solar electricity for self-supply at plannable costs. The electricity supply aside, companies are having to deal with rising interest rates and soaring costs. That is why many are interested in financing and energy services such as energy contracting. Energy contracting enables commercial and industrial customers to procure cost-efficient PV electricity generated on their own rooftop without having to make the investment themselves and without having to maintain the system. Customers who are looking to bring down their electricity bills by using PV generally have no interest in being involved in the actual operation of the installation. They like to delegate this to large, experienced service providers who combine high-quality components for an optimized result, and who do not just sell installations, but also lease or contract them out. This allows companies to concentrate on their core business.

Some German federal states have recently introduced a law that requires new commercial buildings and new roofs on existing buildings to be equipped with PV systems. Will this policy boost the expansion of commercial solar roofs in Germany?

There has been a growing interest in solar installations even without this law. Most companies will opt for this cost-efficient way of obtaining electricity when constructing a new building. Nevertheless, the law is an important message to companies: Solar energy does not just make financial sense, it is also a must to protect the climate. So of course the new law will further push the demand for solar installations on commercial properties. That being said, we need to make sure that the obligation to install PV systems does not lead some companies to compromise on quality. Choosing an experienced PV supplier is crucial.

Subsidy caps, investment barriers and mandatory auctions were reasons for the marked drop in demand for commercial solar installations in 2021. Have these bottlenecks been eliminated? What hurdles to implementing mandatory solar installations do commercial operations still face?

I think that the EEG amendment has reduced some hurdles – some of which had been introduced quite recently. In the area of commercial operations, one example is the complicated 50% rule for installations between 300 and 750 kilowatts peak (kWp). According to this rule, only 50% of the electricity that was fed into the grid was remunerated at the market premium – unless the project was part of a public tender, which in turn made self consumption impossible. This rule was introduced with the 2021 amendment of the EEG, and has now been reversed.

A more pressing problem for the foreseeable future is not the demand however. It is the installation capacity. Many customers have to wait for several months, and this is something that should be factored into projects. We can expect that many buildings will be completed and used before the solar installation can actually be taken into operation. This is why we need generous transitional periods for meeting the solar power mandate.

Lets talk about sector coupling. What trends are you at Hanwha Q Cells observing when it comes to combinations of PV with batteries and e-mobility infrastructure in the commercial sector?

Companies have a high demand for cost-efficient electricity from renewables and for combined solutions that are customized to meet their specific requirements. We are always working on solutions that will expand our range of services for commercial and industrial customers. We are already collaborating with partners to offer companies one-stop-shop solutions that include storage, electromobility and heating infrastructure.

Florian Schmidt spoke to Sarah Hommel de Mendonça.

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