SolarPower Europe, the EU-level solar trade body, has today published a new report on the latest innovation in solar PV business models and financing schemes that they hope will see the industry into the next phase of the technology’s development.
The report, which looks at all application segments from rented single family homes to social housing, from multi-occupancy commercial buildings to ground mount solar farms, has identified the four core business models for solar as being self-consumption, power purchase agreements, cooperatives and virtual power plants.
Solar is a technology with high up-front capital costs and low operating costs – and revenues spread out over 20 years or more. Capital costs make up about 30% of solar Levelised Cost of Electricity (LCOE), and therefore reducing the cost of finance is going to be key to costeffective deployment in years to come. New and innovative financing mechanisms and business models can help mitigate risks and overcome up-front costs.
Sonia Dunlop, Policy Adviser at SolarPower Europe, commented: “With this report we have identified what we are think are the best examples of solar business models and financing from around Europe and hope to spread the word to spur deployment across the continent.”
“Ultimately it is about increasing the value of the solar electricity and mitigating risks, whether that be on the roof of a business or a ground-mount utility scale plant.”
The research project has also produced business model guidelines for seven key European markets including Turkey as well as template legal contracts, drafted by leading lawyers in each country, which are free to download on www.solarpowereurope.org
This report is intended as a guide for both professional and non-professional investors and developers to the main application segments, financing schemes and business models for solar PV in Europe. It was developed by SolarPower Europe as part of the PV Financing project. It looks mainly at the self-consumption, Power Purchase Agreement, cooperative and Virtual Power Plant business models, in each case setting out detailed step-by-step processes for how they can be implemented – and indeed combined.
The report also looks at the main sources of financing for solar PV in Europe (self-funding, debt, equity, mezzanine financing, leasing and crowdfunding) and the specifics of the different application segments (single-family houses, multi-family houses, industrial buildings etc). Note the issue of trade defence measures on imports of solar PV and the EU-China Minimum Import Price (MIP) is not covered in this guide, for more information on that see here.