The European solar industry readies for the digitalization challenge

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“Solar is now cost-competitive against other sources of power generation”—World Energy Markets Observatory, 2017

Some 200 representatives from utilities, PV equipment manufacturers, financial institutions, and start-ups gathered in Munich on December 5 at a two-day conference hosted jointly by SolarPower Europe and IBESA to discuss the role of digital in the solar and energy storage industry. In what is clearly a breakthrough moment for the solar industry, participants across the board are seeing improving cost-competitiveness and growing demand for solar services. As SMA CEO Pierre-Pascal Urbon put it last April:  “the company’s energy management platform should account for 40% of total revenue in 2020.” At the conference, I shared how Capgemini helped utilities to launch new digital services in two specific case studies.

    • Solar is now cost-competitive against other sources of power generation in many regions of the world and, according to Capgemini’s World Energy Markets Observatory report (WEMO), utility-scale solar LCOE ranged from $46–61/MWh in the US alone in 2016.
    • Due to shrinking PV hardware costs, manufacturers, EPC, and developers want to offer solar energy as a service. Energy storage and energy management systems are crucial to enable this model. Solar developers have started developing their own energy management systems. SMA stated that: “half of our engineers will work on solutions, apps, and data-based technologies already next year. That will keep us in the position to participate in tomorrow’s digital platform business.”
    • The industry believes that the biggest market potential for solar is to be deployed systematically with residential, commercial, and industrial end-users. Utility-scale solar plants will become less and less attractive.
    • Customers in 2018 live in a digital world and the industry needs to make the extra effort to match their expectations (e.g., use of mobile apps for remote monitoring). The industry needs to become more agile and adapt solar offerings according to customer needs. E.ON’s Solar Cloud is a first step: the solar energy produced and sent to the grid will be net-backed in the total consumption bill. This gives consumers the impression of being almost independent.
    • Sonnen’s vision for the industry is a network of interconnected energy islands where P2P trading allows energy exchanges. In this environment, blockchain is seen as the perfect fit to connect consumers and several start-ups are testing the concept (e.g., SunContract, Toomuch.energy). However, blockchain costs need to come down significantly.
    • In operations, industry players see important opportunities in automating manufacturing (Chinese battery manufacturer BYD demonstrated fully automated battery manufacturing facilities at the conference) and the use of digital tools for O&M (e.g., benchmark of modules, inverters, remote monitoring).
    • Regulation was once again mentioned as a source of instability, in particular for energy storage (network operators are still not allowed to own energy storage assets). Also, DSOs want to see changes in the incentive mechanism: focus more on OPEX rather than CAPEX.

Capgemini helps utilities, OEMs, and energy service companies transform and embrace the potential of digital, solar, and storage. Software is rapidly expanding into energy and utilities. Capgemini, as a global digital leader with extensive industry knowledge and international team of respected experts, is ideally positioned to support your development. In the presentation below, you will learn through specific case studies how Capgemini helped energy leaders to rethink their strategy, generate new offers and build the most appropriate digital platform. You can also connect with me online, here.

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