Solar PV could be similar to the shale gas disruption for the utilities industry

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In the report Solar PV could be similar to the shale gas disruption for the utility industry Roland Berger Strategy Consultants brings recommendations for the solar PV market which has developed from a niche market segment into a high growth market.

The increase in 2014 in solar PV capacity of 39 GW is close to the nuclear power capacity of Japan and total global capacity now stands at 177 GW.

The report states solar PV will be a game changer for the utility industry, highlighting the following factors:

  • The share of traditional utilities in the European installed solar PV capacity is less than 1% at the end 2014. The remaining 99% is owned by investors, project developers, households and commercial companies and they compete with utilities in electricity generation.
  • The share of solar PV electricity production in total European electricity production can reach 12% by 2030, quadrupling the share in 2013. Solar PV will start to have a large impact on the business model of utilities.
  • The electricity retail price, including taxes, grid fees and the EEG levy equals 29 cents/kWh in Germany, while the feed-in tariff for residential rooftop installations equals only 12.5 cents/kWh. Raising self-consumption with home automation tools and storage enables consumer to put the difference of 17 cents/kWh in their pockets, threatening the traditional utilities offer.

By enabling energy consumers to produce energy, solar PV will change the energy landscape in a multidirectional system, which poses a major threat for the current business model of utilities, but at the same time solar PV creates new business opportunities that fit well with the competences of the utilities. 

Utilities should prepare to fully capture these opportunities in the future and maintain their position in the energy landscape. Eric Confais, partner in the Paris office of Roland Berger, adds:

"The magnitude of the solar PV impact could compare to the shale gas revolution on the energy industry. It will drastically change the energy landscape for utilities. Utilities will have to deal with increased fluctuations of the energy system, loss of generation volumes and lower prices, and even new players may enter the scene."