Solar power is coming whether you want it or not

Solar power is not yet viable for energy producers in Finland as the market price of electricity is below the cost of solar power production. This is the main reason why our country's energy generators have not invested in solar power.

However, solar power is already viable for electricity consumers in Finland because the consumer compares generation costs with the total price of electricity which is composed of the generation and transmission cost as well as taxes.

Thus, the only things that can prevent the spread of solar power are a fall in the total price of electricity or political decisions. It would seem absurd to make decisions that prevent the increase of renewable electrity generation which is not even supported at the moment for consumers.

Finland has not yet got up to speed with solar power, but at some stage there will be a change. The change will be rapid and we need to prepare for it.

Pioneering in Germany

Solar power has really made an impact over the past 10 years. The arrival of solar power has accelerated decision making in Germany to support solar power through feed-in tariffs. This has rapidly increased Germany's solar power generating capacity: it is currently almost 40 gigawatts. In annual energy generation that corresponds to about four 1 gigawatt nuclear power stations.

In Germany the change has taken place over the last seven years and mainly due to private domestic households. These small individual generators have become a major force which is now starting to be significant.

At its peak, Germany was installing 7 gigawatts of solar energy a year, in other words every two years the increase in annual generation capacity was equivalent to the Olkiluoto 3 nuclear power plant. The capital for this investment came from the bank accounts of private households.

Solar panel prices have collapsed

The price of solar energy modules has always fallen 20 per cent as installed generation capacity has doubled. As development during the past seven years has been really fast it is also reflected in the collapse in the price of solar panels.

Although the rate of acceleration has slowed down over the past few years, the growth in generation capacity of solar energy during 2012 and 2013 has still been 40 per cent a year.

At this rate, the generation capacity for solar power will double and the price of modules will fall 20 per cent every year.

Radical change in the playing field

People are usually opposed to change and it is difficult to abandon habitual ways of doing things. Solar power generates responses for and against. In summer cottages, solar energy has been used for decades, but only because cottages are usually located in places not covered by the transmission network and the installation cost has not been significant.

Solar energy will change a lot of things in people's behaviour and in the electricity markets. There will be radical change in the playing field.

You can oppose the coming change or be at the forefront of making it happen. Solar power will become a serious factor in the energy generation sector whether we want it or not.

Further information:

Antti Kosonen, Associate Professor, LUT, antti.kosonen@lut.fi