The document discusses the potential limits to growth for solar photovoltaic (SPV) capacity in Germany. It notes that SPV capacity has grown extremely quickly due to generous feed-in tariffs, but the government has tried to slow growth by reducing tariffs. However, SPV system costs are declining faster than expected, driven by technology improvements and larger production volumes. As a result, SPV investment remains profitable and capacity growth is likely to continue, increasing the volatility of net load and potentially requiring changes to the power system.

1. Is there a limit to
Growth for SPV in Germany?
Subtitle: Something has to give
A presentation from
Hugo Birkelund
Head of Sales and Development
hbi@mkonline.com
+47 9187 7970
This video is a part of a the analysis service from MKonline 1

2. About the presentation:
1. What is MKonline.com
2. SPV for “dummies”
3. SPV capacity growth, history and forecast
4. SPV as weather driven factor
5. Interaction with other fundamentals
6. “Something has to give”
This video is a part of a the analysis service from MKonline 2

3. What is MKonline.com 1/2
• Infrastructure for Markedskraft’s analysis
products
• One-Stop-Shop for information and competence
on power and energy related topics.
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4. www.MKonline.com 2/2
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5. This video is a part of a the analysis service from MKonline 5

6. Our products in detail
Go to MKonline.com
Click on
Our Products
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7. Photovoltaic, concept

8. Solar energy
Model steps
A) Insolation, top of atmosphere C) Atmosphere and Ground
adjusted for distance to sun. Insolation captured by solar cell
Mean value is 1.366 KW / sq.m -Beam/direct radiation, Weather
-Diffuse radiation
-Reflected
B) Atmospheric attenuation
-Sun height, D) On Ground:
-Linke turbidity,* 1) Technology,
-Station elevation (m.a.s.l.) -What type, Where, and When,
-Optical air mass 2) Operating temperature, Weather
Avg. in Germany is 1 KW/sq.m 3) Converting DC – AC,
*Linke turbidity, effect of aerosols reducing the transmission of
direct solar radiation

9. More on Insolation on ground
and technology
Radiation on a horizontal surface and cloud cover
Insolation captured by solar cell
• Beam/direct radiation,
• Diffuse radiation,
• Reflected radiation, from earth
Schematic profiles Total Profile, 24hour
Angle between surface of solar module and
sun. Orientation and tilt of solar module depends
on tracking system
Fixed
1-axis
2-axis. Optimal position
taking into account shadowing

10. Rule of thumbs: 1/2
What affects SPV output?
Input ranges from:
1-Sun height/angle and Earth’s distance to sun at any given time
2-Local atmospheric conditions, density/pollution, climate, at any given
time,
3-Capacity, “Technology in time and space”; Simpler put
• how much of each technology type,
• when is it installed, (2005 – 2020), and
• where is it installed (spatial distribution)
4-Weather, calculating the time and spatial distribution of
• beam radiation and
• diffuse radiation
• Temp and wind (cooling of the panels)
5-Keep track of depreciation, by year and technology
It proved harder to put up the model than initial anticipated.
Most important the highly spatial distribution of the units, different technologies employed,
and rapid expansion of capacity moving at different development phase.

11. Rule of thumbs 2/2
Profile over a year (Stuttgart, Germany)
Curve tilted
upward, due to
new installed cap
Net result has to
be simulated
Horisontal surface,
Min Dec 22.th
Max June, 23.de.
Optimal surface
-2D adjustable
Max April/May
Min Dec
Start lower than if all capacity was optimal
Max in April/May
Decreases as Technology mix,
Sun height rises and - Roof top Fixed
Atmospheric conditions deteriorate -1 D adjusting
Increases as Sun height decreases, -2 D adjusting
Result: a two toped curve

12. SPV capacity expansion
• Extreme growth, powered by feed-in tariffs of the
German Renewable Energy Act (EEG)
This video is a part of a the analysis service from MKonline 12

13. Capacity expansion
• Putting it together
Question 1
Why historic high growth?
Question 2
Why do we
expect it to
continue?
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14. Growth because
SPV units have been “in the money”
Historic Average generation costs and feed-in
50 tariffs (rooftop plants smaller than 100kW)
generation
Costs/Feed-in in € Ct./kWh
45 costs
40
35
feed-in 0kW -
30
30kW
25
20
15 feed-in 30kW -
10 100kW
5
0 feed-in 10kW -
40kW EEG
Jan 09
Apr 09
Jul 09
Okt 09
Jan 10
Apr 10
Jul 10
Okt 10
Jan 11
Apr 11
Jul 11
Okt 11
Jan 12
Apr 12
Jul 12
amendment
Source: Photovoltaic Guide 2012

15. Germany tries to slow down massive SPV capacity
extension by establishing new feed-in tariffs
• Main aspects of EEG Amendment from June 2012 for SPV
< 10 kWp < 40 kWp < 1000 kWp < 10 MWp
Feed-in 01.04.2012 [Ct/kWh) 19.50 18.50 16.50 13.50
− Support cap of 52 GW installed > 7500
-2,80%
Annual capacity increase [in MW]
capacity 6500 - 7500-2,50%
− Adjustment of monthly feed-in 5500 - 6500 -2,20%
digression every three month 4500 - 5500 -1,80%
3500 - 4500 -1,40%
depending on the previous 12
2500 - 3500 -1% Government target corridor
month capacity increase 2000 - 2500 -0,75%
− Feed-in tariff of 90% of the 1500 - 2000 -0,50%
produced electricity for all 1000 - 1500 0%
rooftop plants (10kW - 1,000 < 1000 0,50%
kW) built after 01.04.2012 -3,00% -2,00% -1,00% 0,00% 1,00%
beginning at 01.01.2014. Monthly change of feed-in tariffs
Source: EEG 2012

16. Germany tries to slow down massive SPV capacity
extension by establishing new feed-in tariffs
• Main aspects of EEG Amendment from June 2012 for SPV
< 10 kWp < 40 kWp < 1000 kWp < 10 MWp
Feed-in 01.04.2012 [Ct/kWh) 19.50 18.50 16.50 13.50
− Support cap of 52 GW installed
capacity
− Adjustment of monthly feed-in
digression every three month
depending on the previous 12 Government target corridor
month capacity increase
− Feed-in tariff of 90% of the
produced electricity for all
rooftop plants (10kW - 1,000
kW) built after 01.04.2012
beginning at 01.01.2014.
Source: EEG 2012

17. We believe it will not slow down investment as
EPIA probably underestimated cost degression
Average PV-system price decrease Germany (rooftop
plants smaller than 100kW)
4500
4000 -60.8% overall decrease
3500 -2.1% per month (avg)
System price in €/kW
3000
Study published in 2011 EPIA 2011
2500
(forecast to 2020)
2000
1800€/kW (3kW rooftop)
1500 1500€/kW (100kW rooftop)
1610 €/kW (Sept. 2012)
1000
500
0
Jan 09
Jul 09
Jan 10
Jul 10
Jan 11
Jul 11
Jan 12
Jul 12
Jan 13
Jul 13
Jan 14
Jul 14
Jan 15
Jul 15
Jan 16
Jul 16
Jan 17
Jul 17
Jan 18
Jul 18
Jan 19
Jul 19
Jan 20
Jul 20
Source: Photovoltaic Guide 2012, EPIA 2011

18. Calculation of future generation costs based on the
“Levelized Costs of electricity“ approach
Assumptions
Values
Load hours 900h
ROE 5%
Capital commitment period 20 years
Maintenance/ Operation/
Insurance costs 1% of initial investment per year
Initial Investment Cost Developing of two scenarios based on the
(SPV-System price) learning factor approach (next slide)
Source: Own assumptions

19. SPV System price decrease – Scenario overview
Cum. Market
Learning Factor
Scenario Low
Learning factor growth per year
percentage rate costs decrease
Modules 20% 30% every time the cumulative sold
Cost
volume has doubled
Inverter < 40kW 20% 30%
Inverter > 40kW 20% 30%
Example
Installation/BoP 10% 30% − 30% growth, 20% leraning
factor
cumulative volume doubles
Cum. Market every 31.7 month
20% cost decrease every
Scenario High
Learning factor growth per year
31.7 month
Modules 15% 23% 0.7% cost decrease per
Cost
Inverter < 40kW 20% 23% month
Inverter > 40kW 10% 23%
Installation/BoP 10% 23%
Source: EPIA 2011, NorSun 2012, NREL 2012, Kersten et al. 2011, IRENA 2012

20. Scenario Low Cost – Expected SPV system price
for different plant sizes
4500
4000 <10kW roof
3500
<40kW roof
System price in €/kW
3000
2500 <1000kW roof
1610 €/kW (Sep 2012)
1610 €/kW (Sep 2012)
2000 1240 €/kW (Sep 2012)
1027 €/kW (Sep 2012) <10MW free space
1500
1000 943 €/kW Historic
928 €/kW
732 €/kW
Development
500 590 €/kW
0
Mai 10
Mai 12
Mai 14
Mai 16
Mai 18
Mai 20
Jan 09
Sep 09
Jan 11
Sep 11
Jan 13
Sep 13
Jan 15
Sep 15
Jan 17
Sep 17
Jan 19
Sep 19

21. Scenario Low Cost – Expected SPV generation costs
for different plant sizes
18
16 <10kW
<40kW
14 <1000kW
LCOE in € Ct./kWh
12 <10MW
10 9.46 € Ct./kWh
9.30 € Ct./kWh
8
7.35 € Ct./kWh
6 5.92 € Ct./kWh
4
2
0
Okt 16
Jul 18
Nov 13
Jun 14
Jan 15
Mai 17
Dez 17
Nov 20
Sep 12
Apr 13
Aug 15
Feb 19
Mrz 16
Sep 19
Apr 20

22. Cost development,
Some Scenarios
0,180
0,160
0,140
0,120
High Cost, 900h
0,100
Low Cost, 900h
0,080 .. 1050h 0%, 10%, 25% Auto
Cons, 900h + Increased
..1200h price
0,060
0,040
900h and 25% Auto cons
0,020
1200h and 25% Auto
0,000 cons
Sep‐12 Jul‐13 May‐14 Mar‐15 Jan‐16 Nov‐16 Sep‐17 Jul‐18 May‐19 Mar‐20
This video is a part of a the analysis service from MKonline 22

23. Investing in SPV remains profitable until 2014 when
assuming basis feed-in degression of 1% per month.
Example: 10kW – 40kW rooftop plant
0,200
0,180
0,160
0,140
0,120
0,100
0,080
0,060
0,040
0,020
0,000
Mrz 13
Mrz 14
Mrz 15
Mrz 16
Mrz 17
Mrz 18
Mrz 19
Mrz 20
Sep 12
Sep 13
Sep 14
Sep 15
Sep 16
Sep 17
Sep 18
Sep 19
Sep 20

24. Capacity Forecast Revisited
• Putting it together
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25. Adding 300/Month from 1.Jan 2016
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26. SPV and output
• What does this means in terms of production?
Max value over a day. Normal and Clear sky
60000
50000 DE Clear Sky
MWh/h, Max hour
40000
DE Normal
30000
20000
10000
0
This video is a part of a the analysis service from MKonline 26

27. Consumption and SPV Profile
• SPV does not shave of the peak.
This video is a part of a the analysis service from MKonline 27

28. Comparing 2012 and 2016
• Large increase in volatility
• Close to Zero residual (Con – SPV – Wind)
• Without Wind included…
• Consumption for illustrative purposes almost same as 2012….
2020…..
2012 2016 comp to 2012
Clear sky in 2020
neg residual load
without wind
This video is a part of a the analysis service from MKonline 28

29. MKonline tracks capacity:
Combined effect of SPV and wind
• SPV Growth • Wind power Growth
This video is a part of a the analysis service from MKonline 29

30. 30 Weather Years..2012 capacities
• Residual Load (Con – Wind SPV) Mid month Wednesdays*, 2012
This video is a part of a the analysis service from MKonline 30

31. Combined volatility:
A simple measurement
Simple measurement,
Change from one day
to next day
• High probability for
large changes,
• Intra day too…
• Not symmetrical, e.g.
look at the tail on right
side….
• Increased capacity,
yields Same
distribution much but
longer tails…
This video is a part of a the analysis service from MKonline 31

32. Conclusions
• SPV will grow much faster than recently anticipated
• Along with wind power
• Increased weather driven fundamentals in adjoining markets too…
• Increased volatility in the European Power Market
• Something has to give.
Policy is build on leaving time for adaptation
• More flexible capacity
• Improved exchange and new interconnectors
• Upgrade of transmission grid
• New storage capacities & technologies
• Promoting flexibility of other renewable plants
• Smart metering & smart consumption profiles...
No time for sufficient improvement within current scenario
This video is a part of a the analysis service from MKonline 32

33. You have watched a video
from Mkonline
We hope you found it useful
To see more videos please visit MKonliene.com/videos
Feedback is appreciated and may be mailed
to the presenter or support@MKonline.com
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34. Worldwide PV installations are expected to grow
strongly during the next years
400
343
350
Cumulative installed PV capacity in GW
EPIA Moderate Scenario
(pessimistic market
300 behaviour, no major
266 reinforcement or strong
250 limitation of support
schemes)
203 208
200
169
151
150 137
110 110 EPIA Policy-Driven
90 Scenario (continuation or
100 introduction of adequate
70
support schemes, strong
50 political will to support
PV)
0
2011 2012 2013 2014 2015 2016
Source: EPIA 2011

35. Household electricity price
Structure of German household final consumer electricity
price 2011
2,70% 0,20%
6,50% Electricity and distribution
Taxes (Electricity Tax and
VAD)
33%
13,70% Network charges
EEG apportionment
19,90% Concessions
Measurement and accounting
24%
CHP apportionment
Source: BNetzA 2011

36. TO BE EDITD Capacity, Some numbers
Capacity, recent development Mounted on:
Germany France Spain
Start of year Germany France Italy
Buildings 92% 93% 5%
2010 9757 200 913 Ground 8% 7% 95%
2011 16401 808 2456
Growth 2011 8000 1200 So far 1600*
*Italy: Announced tariff reductions. 4000 MWp granted the 2010
Probably see most small units
tariff if they are grid connected before end of June 2011
Germany:
National Renewable Energy Action Plan
Germany France Italy No farming areas to be used
By 2020 51753 4860 8000
France:
Encourage smaller units
Installed in Germany. Jan – Aug 2010* E.g. compensate for rooftop
MWp # Inst. MWp # Inst. mounting, in line with current roof
< 10 kWp 464 71 695 10% 41%
10-100 kWp 2 601 96 452 53% 56%
100– 1K kWp 1 104 4 735 23% 3% Low political will to sponsor
> 1 MWp
Sum
710 297
4 879 173 179
15%
100%
0%
100%
private investors.
* Avg. 28 KWp

37. This video is a part of a the analysis service from MKonline 37

38. SPV and effect on Phelix 1
Run 30 Weather years through our Price model
Used Normal Wind, Con, etc.
Aim: Single out Cet par SPV effect

39. SPV and effect on Phelix 2
Run 30 Weather years through our Price model
Calc Price – Avg Price
Calc Median – Avg Price

40. SPV and effect on Phelix 3
Run 30 Weather years through our Price model
Calc Summer: Sun. 7.Aug
Calc Winter: Sun. 9.Jan
Summer 2011 Winter 2011

41. SPV and effect on Phelix 3
Run 30 Weather years through our Phelix Price model
Effect on expected Phelix, Peak Hours

42. SPV and effect on Phelix 4
Run 30 Weather years through our Phelix Price model
Indirect effects
Peak price down
,
Less base
offered.
Increased profile
Changed Off
in thermal
Peak.
production Con –
How Much?
Wnd – SPV..
Increased
ramping costs
Spikes on each
shoulder?

43. SPV and effect on Phelix 4
Run 30 Weather years through our Phelix Price model
Indirect effects
Peak price down
,
Less base
offered.
Increased profile
Changed Off
in thermal
Peak.
production Con –
How Much?
Wnd – SPV..
Increased
ramping costs
Spikes on each
shoulder?

44. Start, Find position of sun
Must find exact position of
-sun height and azimuth,
minute by minute, for each station
Sun height, inclination, at any hour:
a + Sum ( b(i)* Sin(i*x) - c(i) * Cos(i*x) ) where
x =2 * pi * (day of year)/365 is the declination of the sun,
angle between sun and
equator, range -23 deg to 23 deg, function of day of year
Model: Time granulation, 30 minutes

45. Cell Temperatures
Photovoltaic cells varies in general inversely with cell temperature.
Reduce output of a cell with as much as 15% compared to
output under standard test conditions (25 Cels)
Cell temp influenced by
Sun intensity, air temperature and wind speed.
Calculates working temp at each location,
Preal = Pstd * (1 – α) ^ ( Tc(h) – 25º Celsius)
Where, alpha varies between 0,1% to 1%
Tc(h) = Tc(h-1) + a* I(h) – b* ( Tc(h) - Ta(h) )
Pstd is power output under standard cell temperature
Preal is power output with real cell temperature
Temperature coefficient α between 0.1% and 1% per deg. Celsius
Tc(h) is average cell temperature in hour h
Ta(h) is average air temperature in hour h
I(h) is insolation during hour h
a and b are parameters

46. Scenario High Cost – Expected PV-system price
decrease (€/kW) until 2020 for different plant sizes
4500
4000 <10kW roof
3500
<40kW roof
System price in €/kW
3000
2500 1610 €/kW (Sep 2012) <1000kW roof
1610 €/kW (Sep 2012)
1240 €/kW (Sep 2012)
2000 1027 €/kW (Sep 2012)
<10MW free space
1500
1103 €/kW
1000 1095 €/kW Historic
895 €/kW Development
733 €/kW
500
0
Mai 10
Mai 12
Mai 14
Mai 16
Mai 18
Mai 20
Jan 09
Sep 09
Jan 11
Sep 11
Jan 13
Sep 13
Jan 15
Sep 15
Jan 17
Sep 17
Jan 19
Sep 19

47. Scenario Low Cost – Expected PV generation costs for
different plant sizes
18
16 <10kW
<40kW
14 <1000kW
LCOE in € Ct./kWh
12 <10MW
10 9.46 € Ct./kWh
9.30 € Ct./kWh
8
7.35 € Ct./kWh
6 5.92 € Ct./kWh
4
2
0
Okt 16
Jul 18
Nov 13
Jun 14
Jan 15
Mai 17
Dez 17
Nov 20
Sep 12
Apr 13
Aug 15
Feb 19
Mrz 16
Sep 19
Apr 20

48. Scenario High Cost – Expected PV generation costs for
different plant sizes
18
<10kW
16
<40kW
14 <1000kW
System price in € Ct./kW
<10MW
12 11.06 € Ct./kWh
10.98 € Ct./kWh
10
8.92 € Ct./kWh
8
7.35 € Ct,/kWh
6
4
2
0
Sep 12
Feb 13
Jul 13
Aug 15
Jan 16
Jun 16
Apr 17
Sep 17
Feb 18
Jul 18
Dez 13
Mai 14
Okt 14
Nov 16
Dez 18
Mai 19
Okt 19
Aug 20
Mrz 15
Mrz 20

49. Prices for SPV modules
www.sologico.com
This video is a part of a the analysis service from MKonline 49

50. Annual Yield of SPV systems in Germany
www.pv-ertraege.de
This video is a part of a the analysis service from MKonline 50