The European Technology and Innovation Platform for Photovoltaics (ETIP PV) recently published its annual factsheet on the levelised cost of large-scale solar electricity (PV LCOE). According to the report, the prices of PV modules dropped again by 30% last year.
Since the beginning of this decade, the market price of solar photovoltaic modules has decreased by about 90% and turnkey prices of PV systems by about 80%. This means that LCOE is now below electricity market prices in most European countries. Moreover, for all sizes of rooftop systems, solar is now competitive with retail electricity prices all over Europe.
How about the price development of solar power in different system sizes? Let's take a look at Finland specifically. Solar is becoming more and more profitable also here, although the Nordics might not be the first place that comes to mind when thinking about solar power. Note that southern Finland has a similar annual yield and PV LCOE as London!
Utility-scale PV cheaper than electricity market price
PV LCOE for large-scale ground-mounted installations is now about 4 c/kWh in southern Finland with a 7% nominal interest rate. Last year, the average spot market electricity price in Finland was 4.7 c/kWh.
In India, where Fortum is constructing and operating large solar power plants, the costs are even lower. Fortum currently operates about 180 megawatts AC* (MWac) of solar power in India and is constructing a 250 MWac plant in Pavagada Solar Park, Karnataka. Fortum recently won another 250 MWac project in Rajasthan. In addition, Fortum has about 35 MWp solar capacity in operation and 110 MWp under development in Russia.
Industrial and commercial rooftop solar makes sense
On a smaller scale, the smartest way of generating electricity is to install a rooftop solar system and use it for your own consumption. That way, you can save energy, taxes and partly distribution costs in your electricity bill.
In most industrial and commercial installations, all the generated solar electricity can be consumed on site and thus the full benefit is in the bill. Again in southern Finland, according to the ETIP PV report, the LCOE for large-scale rooftop solar is now 5-7 c/kWh. S Group, for example, has recently taken big steps towards a cleaner world when Fortum installed a total of 10 MWp on the rooftops of 40 supermarkets all over Finland. It was the largest commercial solar rooftop project in the Nordic countries.
System sizing is essential in small rooftop systems
In smaller residential solar installations, it is essential to size the system so that most of the generated electricity can be consumed on site. Self-generated and consumed solar electricity typically saves 10-15 c/kWh in a residential electricity bill in Finland, whereas surplus electricity sold to the grid is often valued only for the spot market price, i.e. about 5 c/kWh.
According to the ETIP PV, residential PV LCOE in southern Finland is now 7-10 c/kWh, depending on the investment cost and interest rate. Fortum sells turnkey solar rooftop systems in all installation sizes to residential customers in Finland. In addition to the savings in your bill, you get CO2-free electricity, you make a real climate action and you increase the value of your house. What could be a better combination?
Link to ETIP PV LCOE factsheet: https://etip-pv.eu/publications/fact-sheets/