The European photovoltaics market has not yet lived up to the expectations many observers had for it after the strong increase in installation figures in November and December 2016. Although there has been an overall revival by comparison to the first quarter of last year, the market has still failed to really take off.
The weather cannot really be the root of the problem — the winter has been and continues to be very mild. But it cannot be down to module prices either, as these continue to fall, albeit more slowly, but continuously and on a broad front. Except for the prices of Chinese crystalline modules, prices in every other category have fallen at least 1.0 euro cent per watt-peak from January to February - although, they have rebounded somewhat in March.
Why is it, then, that the rate of PV expansion is seeing such slow growth? Should we concede to the view of Milan Nitzschke, of EU Prosun, who continues to maintain that market development has nothing to do with the price of panels and claims that the high minimum import price imposed by the EU commission is not harmful to the industry? The strong gains at the end of last year, so the story goes, were the result of a last-minute panic prior to the amendment of the German Renewable Energy Act (EEG). I maintain, however, that that is precisely why the installation figures have not exploded yet.
The players in the industry need time to get used to the new regulations and adapt their business models. Revised versions of the EEG never provide acceptable preparation time or planning security due to the numerous corrections usually made to draft legislation right up to the last moment. Existing concepts and pre-developed projects have to be adapted to the new conditions, for instance, before a company can think about building them. In the current case, it is the inclusion of all roof installations above 750 kilowatts in the tender process, and freeing up of open areas on this scale that is creating plenty of work for designers.
However, given attractive module prices, numerous solar companies are building a respectable project pipeline, which can be worked off over the coming months. Companies are continuously seeking and comparing offers for material for those projects, even though the actual delivery dates are not even scheduled yet. In view of the still volatile prices, hardly anyone wants to make a long term commitment, which is not making forecasting and planning any easier for suppliers. Nevertheless, the order books are filling up, which is cause for optimism in the German and European photovoltaic markets in general.
In many companies and larger O&M service providers, the annual maintenance season has also begun. After the winter many installations have to be inspected, cleaned and defective modules replaced. Since many of the module types used are no longer produced, procuring a suitable replacement is not always easy. Certain providers can supply identical or similar products, but often only in limited quantities and at prices many times higher than the current market price. Particularly at the now low price levels, more and more operators are opting for a complete overhaul; that is, getting rid of all of the old modules and installing the latest generation of crystalline modules.
This is also true of PV systems installed just a few years ago with thin film panels that now have yields 15 to 20% below the anticipated value. Unfortunately, the module manufacturers are only liable in a scant few cases, since many of them filed for bankruptcy years ago. Often, the only option left for operators is a complete rebuild at their own cost. What until recently was not feasible economically is at today's module prices worthy of consideration. In favorable circumstances, so-called "re-powering" of a PV plant can pay off in just a few years for plants with a relatively high feed-in tariff that still valid for a long enough time.
Overview by technology of different price points in February 2017, including the changes over the previous month (The prices shown reflect average asking prices for duty-paid goods on the European spot market):
