The legislative soap opera on the rules for settling accounts with photovoltaic (PV) installations has come to an end. The Sejm has decided that the regulations, which are extremely beneficial for panel owners, will cease to apply from April next year. Then the prosumers will no longer be able to use the discount system.
Photovoltaics a victim of its own success?
What does it mean? “Prosumer” is a combination of the words “producer” and “consumer”. In this way, you define people who produce something for their own use while sharing with others.
This is the case of users of photovoltaic panels who, while producing their electricity, give some of it to the power grid. This is referred to as “virtual energy storage”, replacing the actual electricity storage installations, which are so far rare in Polish homes.
The energy from the panels is transferred to the grid when more of it is produced than it is consumed. Most of it is during the day, but it is used most often in the evening and at night. Owners of installations with a capacity of up to 10 kilowatts (the vast majority) then have the right to receive 80 percent. energy from “virtual storage” for free.
This is how the discounts work, which in the case of some farms reduce energy costs to symbolic amounts.
The problem, however, is that the “virtual warehouse” is not made of rubber, and the power of the panels installed on the roofs of Polish houses has grown in recent years like a yeast.
According to the latest data from the Energy Market Agency, it amounts to 5.97 gigawatts (GW). In mid-2020, it reached “only” 3 GW. This means that in 2021 we have already fulfilled the commitment from the Polish Energy Policy until 2040 (PEP 2040). In the document, the government established that by the end of the decade, the installed capacity of solar panels will be between 5 and 7 GW. For comparison – the Bełchatów power plant has a capacity of up to 5.1 GW.
This is excellent information, but the power grid is not adapted to receive energy from “zero-emission Bełchatów”. Among others, Ireneusz Zyska, Deputy Minister of Climate, spoke about it. During peak hours, he claimed, energy production is so high that prosumers are disconnected from the grid.
“It is related to the fact that our power grid has its limited capacity,” argued Zyska, arguing that it is impossible to maintain the discount system without reflection. What’s more, according to representatives of the climate ministry, some people intentionally install a bit too large installations to transmit more electricity to the grid – and then receive it free of charge.
“It’s like forbidding trucks to drive, because the roads are in a bad condition,” comments Mikołaj Troczyński, renewable energy specialist at the WWF Poland Foundation. – “Modernization of the grid, especially of the low voltage, is standing still and is urgently needed.”
Panels not always favorable to the climate
Government officials say there is no escape from changing the rules. We are forced to do so by EU law, which forbids connecting network costs (i.e. those related to receiving and transmitting energy) with the costs of electricity itself – and this is the case with discounts.
The changes adjusting us to the European directive are partially praised by the president of the Institute for Renewable Energy, Grzegorz Wiśniewski. In his opinion, discounts even … increase energy production from coal. This happens, for example, in winter, when the sun does not supply enough energy, and the prosumers receive the power that was previously given off from the grid.
Then most of it comes from “dirty” sources. After all, electricity consumption is also growing – because panel owners want to use as much “free” energy as possible. According to Wiśniewski, maintaining this system in the long run is impossible.
“On the one hand, we have a boom in photovoltaic micro-installations connected to low-voltage grids, and on the other, no investments in these grids. This is an inconsistency of actions. Because we support massive investments in PV micro-installations (…) and we are doing nothing to connect these sources to the grid more ”- said Wiśniewski quoted by the polskiemarki.pl portal.
Carousel with designs
The government, however, first opted for a different solution. Instead of adapting the grid to the growing power of photovoltaics, he decided to make changes that will most likely slow down its development.
The Ministry of Climate presented the details of the new solutions six months ago. For the current prosumers and people who set up panels until the changes come into force, nothing would change, and the guarantee of unchanging rules applies to them for 15 years from signing the contract with the network operator.
However, new solar users would not be able to use the discount system. Instead, they would enter the energy trading market – by selling it to operators at the previous quarter’s average market price or by using so-called ‘aggregators’. These are companies that would buy energy from prosumers and then trade it on the market.
The problem is that the selling prices of energy are higher than the cost of buying them – and in the new reality a prosumer would have to buy energy in order to use it during a shortage of electricity from the panels. Therefore, the enormous savings that panels are currently giving are melting in such a scenario.
High Voltage portal calculated that in the current system, an average household with five kilowatts of photovoltaics can pay for electricity as little as one hundred zlotys a year, saving as much as 3,000. zlotys. If the original government bill had gone into effect, savings would have been at most $ 2,000. zloty.
The government’s proposal met with strong criticism from industry and non-governmental organizations, which made a joint appeal to the government. The Polish Smog Alert was also on the list of signatories of the appeal in defense of the discount system.
Air pollution activists fear that the changes will rapidly hamper the growth of the heat pump market. These are heating devices that offer “clean” heat, but consume large amounts of electricity. The possibility of receiving “free” energy in winter makes their use much cheaper for prosumers.
The answer to the proposals presented by the Ministry of Climate was to be a parliamentary project endorsed by a PiS MP, former Minister of Development, Jadwiga Emilewicz. According to him, prosumers could receive one hundred percent of the energy transferred to the grid. However, this “discount” would not apply to network costs.
This would mean that about half of the electricity transferred there could be collected from the “virtual warehouse”. Such a plan separates network costs from electricity costs and could therefore be approved by Brussels. Energy companies, which today largely cover network costs for people who use panels, would also be relieved.
Ultimately, the former minister’s proposal was lost, and the draft presented by MP Marek Suski was added to the agenda of the parliamentary work. Ultimately, the bill adopted by the parliament assumes that prosumers will settle accounts under the so-called net-billing – in the simplest terms, sell energy on market terms and buy it at the same rates as other recipients, with a 15% discount. on the distribution fee.
Surplus electricity sold to the grid will be recorded on a personal account assigned to each prosumer who signs a contract for transferring energy to the grid after April 1 next year.
The amendment to the RES Act took on a twin form to the original proposal of the Ministry of Climate. Also in this situation, “old” prosumers will have a 15-year guarantee that the rules will remain unchanged.
Longer payback for panels, price uncertainty
What will be the effect of changes in billing? According to Mikołaj Troczyński from WWF, many potential prosumers may resign from investing in their own panels, not only due to the extended return time.
“Although with the new accounting rules this period may be extended to even 12-13 years” – claims Troczyński. For comparison, mini-installations in the discount system pay off even in 6-7 years. “But the problem is also the loss of trust in the government, who may change the law on photovoltaics again in a year or two.”
This is bad news for people who are planning to build their own home and are thinking of putting on roof panels, among others. At the moment, they can be more cautious about their plans and not include them in the construction cost estimate and loan application. After all, in a few years, after moving into your four walls, the investment may be completely unprofitable.
The draft passed by the Seym is also burdened with a major flaw, known from the original proposals of the Ministry of Climate. The prosumer will buy energy at retail prices and sell it at wholesale rates – that is, much cheaper.
“These costs will change dynamically, they will be unpredictable. Therefore, it is difficult to forecast long-term financial results, the ratio of retail prices to wholesale prices and how long the return period for panels will be, ”notes Troczyński.
The end of the bull market for installers?
There is also uncertainty in the solar industry and its employees. And according to the summary by SolarPower Europe, Poland can boast the largest solar energy sector in terms of employment.
According to the organization’s estimates, 91 thousand jobs were created in our country by 2020. jobs in companies dealing with “solar”. SolarPower Europe specialists have noticed that this is influenced by the characteristics of our market, which is dominated by roof-mounted micro-power plants. Their maintenance and installation is where the most work is.
“Rapid and unprepared change is already influencing the development of the prosumer market in Poland. These are serious problems for the Polish society, which needs cheap electricity, and a threat to thousands of jobs in the industry, ”assessed Grzegorz Burek, vice president of the Association of the Photovoltaic Industry, who signed the joint appeal of social organizations to the government.
“Unfortunately, there is a risk that these employees will change the industry and their experience will be lost. It would be an irreparable loss, ”comments Troczyński. – “We have a large production potential, both in terms of energy, as well as equipment and services. We could even start exporting them. We are a large producer of copper and silver, and these raw materials are very important in the production of photovoltaic panels. “
Prosumers will profit anyway, and they owe it to themselves
Despite this, the Deputy Minister of Climate, Ireneusz Zyska, a few days before the vote on the final bill, fiercely defended the new solutions in an interview with the Polish Press Agency. At the same time, the prosumers who are already operating on the market, who are to set up “scaled-up” installations for greater profit, have found their way again, thus accelerating the need to pass a new law. According to Zyska, the new owners of the panels will still pay off their investments in solar farms after April 1.
“The claim that the new billing system will be unfavorable for prosumers is not true, compared to” ordinary “electricity consumers, prosumers will save approx. 1.7 thousand annually. PLN on electricity bills, “Zyska told PAP.
Will these calculations work? It just depends on how energy prices will develop after April 1, 2022. It can be said with a little more certainty that more work is waiting for solar installers in the coming months. Changing the law should convince many people to rush their decision to install panels on their roof – so that they can make it before the changes.