Various challenges impact the profitability of solar projects while capacity continues to be built in the DACH region
- Higher interest rates raising the cost of capital
- Grid connection constraints and permitting delays
- Decreasing PV captured prices of price forward curves in DACH region markets
- High costs due to worker availability, despite falling module prices
- What market information would you need to invest in PV projects in the DACH region?
- As a part of your generation portfolio, what value will solar have as an asset in the future system?
- What are the revenue opportunities beyond the wholesale market?
Solar developers and operators must rigorously optimise key cost drivers of PV projects (exemplary selection)
(A) CAPEX is driven by financing conditions and key cost components (i.e. construction, grid connection and permitting). Harmonizing procurement strategies can optimize costs.
(B) OPEX (e.g., maintenance, insurance and inspections) can vary substantially across locations and project type. Transparency over variations is key to identify impactful cost-saving measures.
(C) Capture end of life value from modules, cables, substructures etc. to contribute towards dismantling costs and improve project economics.
We can help clients look at different ways to maximise the value of solar as an asset class either on a standalone basis or as part of a wider portfolio of assets
Understand the value of Solar PV in the future electricity system
- Develop and model electricity market and system scenarios to test the plausibility of price forward curves
- Project the likely development of PV captured prices in DACH electricity wholesale markets
- Assess potential locations of solar assets to maximise yields
- Review whether there is optionality value for solar PV that could arise in the case of extreme market prices, as observed during the commodity price crisis, by using stochastic price simulation modelling
Evaluate the potential of increasing captured prices by co-locating solar with storage and other demand side units
- Assess the commercial potential of combining solar with co-located energy storage, such as batteries, to increase captured prices of a project (through manipulation of the daily generation shape to sell at peak pricing and achieve higher capture rates)
- Determine optimal sizing of assets, including oversizing solar capacity to ensure maximal captured revenues on the wholesale market
- Optimise trading across wholesale, ancillary service and balancing markets with co-located assets to maximise captured value
Explore options to sell solar-generated electricity directly to customers
- Identify relevant customer demands for purchasing solar generated electricity directly (e.g., demand during the day such as for EV charging; or demand during summer such as for cooling)
- Define suitable products and contractual models, which could include PPAs or offtaker models in which land or a large rooftop is leased to build and operate solar panels
- Validate the business case of the products or contracts
- Run initial pilots to test integrated solar models ahead of a product launch at scale
How we have supported clients in this area
- We modelled electricity price scenarios for a large European generation company to help them refine their solar investment thesis in a large European market.
- We evaluated solar and energy storage technologies for a large waste energy company on both a standalone and co-located basis to determine possible attractiveness of investment.
- We developed and prioritised integrated solar business models for a European customer-facing utility.