Rooftop PVs on the rise – High noon for energy providers

Rooftop solar is massive in Europe. Perhaps you know this already, but massive is not a figure of speech. Thanks to financial incentives, building regulations, and increasingly energy-aware consumers, the era of rooftop solar PV is dawning. This market shift can positively change the landscape of energy consumption and the grid itself, if only energy providers overcome the block that leaves prosumers and their production/consumption rate in the dark. 

Rooftop PV market – State of play

The latest aggregated data we have on solar PV is for 2022 and comes from the Global Market Outlook for Solar Power 2023-2027 from SolarPower Europe [1].

Global rooftop PV Uptake

In 2022, solar power had the highest electricity generation rate at 24% YoY. Residential solar PVs accounted for 49.5% of the total installations. In particular, rooftop solar capacity rose from 79 GW in 2021 to 118 GW, printing a 50% growth rate. The countries globally with over 1 GW rooftop solar capacity are now 26, compared to 17 in 2021. 

Rooftop PVs in Europe: A Cradle Of Hypergrowth

Zooming in on Europe, the latest data highlights specific high-interest markets for residential solar PV:

Spain doubled the market size of rooftop solar, with 3 GW new capacity. The rooftop PV market increased by 105%

Germany noted a 23% growth in grid-connected solar capacity, mostly driven in majority by rooftop solar PVs

Until 2020, the UK noted around 1 million homes with solar PV systems installed, marking an adoption rate of 4%. 3 years later, in 2023 the UK had a 12-year record-high in rooftop installations – the highest number since the 2011 subsidies.

In Poland, rooftop solar accounted for 78% of the total installed capacity of 4.5 GW and a 20% growth from 2021. The growth was driven by the new net-metering scheme, which propelled the country to rank 8th in the global solar market from 10th in 2021.

In Italy, the rooftop PV market increased by 127%

Austria, Denmark, and Greece had an annual growth rate of over 50% in residential PV.

In 2022, the Swiss solar market reached the 1GW mark based almost exclusively on rooftop PV systems.

With a 46% share and a 1.8 GW capacity, rooftop solar was the biggest solar market segment in the Netherlands in 2022. The number of prosumers is estimated at over 1 million of the total population of 17.7 million, ranking the residential adoption rate at roughly 16%.

Rooftop PV market projections: The future looks bright

Europe-wide numbers for 2023 are not printed yet, but the same report from SolarPower Europe estimates a 35% YoY increase in rooftop solar PVs worldwide.

The annual installed rooftop capacity for 2027 is forecasted to increase by 126% – and that is the medium scenario analysis based on 2022 data. It’s worth mentioning that the medium scenario does not account for the rapid electrification of the heating sector and the market growth in heat pumps, nor for national mandates for solar PV installations that can dramatically speed up the growth.

Rooftop PV growth catalysts: National commitments

Speaking of mandates and with 2030 in sight, many nations are accelerating the net-zero transition and incentivising the industry and its citizens to do the same. These mandates can be a catalyst for record-high adoption rates of solar PV systems. If these mandates succeed, critical mass for European rooftop PV is not far.

In the UK, the introduction of the Future Homes Standard, set to come into force in 2025, requires 75-80% reduced emissions in all new construction. Meanwhile, the mandate is also instructing a transition in heating systems, one of the UK’s largest carbon emitters, responsible for nearly a third of the nation’s annual carbon footprint. Emissions reduction in newly-constructed buildings is technology-agnostic but the narrative heavily revolves around the effective combo of electrified heating and rooftop PV systems, building on its 2023 success

The EU has a similar albeit slightly more ambitious goal for new construction. The Energy Performance of Buildings Directive (EPBD) sets a zero on-site emissions goal for newly constructed buildings by 2030. The European Solar Rooftops Initiative, part of the REPowerEU Plan for affordable and sustainable energy in Europe, has parallel effects to EPBD. The European Solar Rooftops Initiative includes targeted recommendations to Member States to phase in a legal mandate by 2027 that instructs PV systems on all public buildings and all new construction to be solar-ready.

The macro-perspective is reassuring and backed by robust data. The PV installations are well monitored: We know how the world is doing today, we can forecast where it will go tomorrow, and officials can set long-term commitments. What happens when we zoom in on the people who drive the rooftop PV transition – the prosumers themselves? 

Prosumers: The change drivers in focus

The picture zooming in on prosumers is not as clear: The total number of prosumers in the EU is not currently known due to a lack of data and prosumption monitoring. Moreover, prosumers themselves are left near-dataless post-installation. Can the individuals and entities responsible for hitting the mandatory targets track their progress with the same accuracy countries do? Be that their pocket or the environment, can prosumers monitor the target-critical parameters for their PV system?

Creating the prosumer persona is a challenge, mostly shaped by the lack of data on prosumers, as we covered in the previous course. Prosumers are driven by several but strong motives: Leveraging subsidies, cutting costs, investments, and sustainable living

However, the last European prosumer survey from 2017 shows that financial drivers like cost savings and subsidies top all motives. Considering the global economic developments since 2017, we can safely assume that money is still the top motive and probably an even stronger one. 

Cost savings & rooftop PV data: Prosumers are in the dark

Utilities and energy providers have not missed the opportunity to leverage financial motives in prosumers. Partly motivated by the EU’s directive for dynamic pricing, partly motivated by the much-needed grid stability and optimisation, but mostly to attract, retain, and add value to prosumers, energy providers are introducing dynamic tariffs to facilitate better production and consumption management in prosumers.

In theory, dynamic pricing brings wins across the board: It helps stabilise the grid; It enables prosumers to be in control of their costs; It facilitates green electricity in the grid; It systematically optimises consumption; It can reduce demand during peak hours. In reality, there is a key prerequisite.

Dynamic pricing requires the prosumer to be actively engaged in their energy management. In particular, for prosumers, this is easier said than done. With or without a smart meter, accessible energy management for prosumers ranges from heavily laborious to completely inaccessible. This is what a new prosumer told us recently:

“I installed solar panels for my pocket and I still can’t see in euros how much energy I generated this month.”

A simple search on the internet revealed the quest for an even simpler prosumer question:

“How do I know if I am using grid electricity or solar power?”

This simple question landed in Quora, the last resort for questions in desperate need of an answer. The responses from the community ranged from:

  • Checking whether the meter runs forward or backward 
  • Connecting the dots with who could be home 
  • Looking at the meter in combination with the inverter display and bills 
  • Getting additional hardware 

Production and consumption data for prosumers

To meet the elevated energy management needs of prosumers and to give substance to dynamic tariffs, energy providers must provide prosumers with high-granularity, almost real-time, highly personalised import and export data. These insights enable prosumers to optimise self-consumption and ultimately, energy usage. 

Energy management as provided by energy providers today fails their most high-stakes customers. The promise to prosumers and the driver for their investment is a solid ROI: Optimising their energy usage, maximising their savings, and reducing their carbon footprint – as well as the Scope 3 carbon footprint of energy providers and banks. 

As the Quora example above demonstrated, what is, at best, available is the net transaction with the network. The disaggregated data relevant to making the most out of a PV installation–import-export, consumption-production, and self-consumption rate–is inaccessible by traditional means. In the age of rooftop PV hyper-growth, energy providers are called to level up their offer to prosumers with PV data disaggregation, combining location-specific data from the prosumer’s PV system and meter data.