Newsletter – Regulatory barriers and recommendations

Guidelines for the massive integration of solar PV distributed generation are necessary. In iDistributedPV project, based on the simulations and the case studies we analysed in Spain, Germany, Poland, Lithuania and Greece we developed some regulatory recommendations focused on the energy flows and ancillary services, the operation and control procedures and the grid codes, the integration approach of the distributed generation with the system operation, the role of the different players in the operational model and the economic flows and the revenue models.

According to the analysis the partners made for iDistributedPV project, a series of regulatory issues were identified that may slowdown in general the development of the PV sector. Policy uncertainty barriers, frequent changes in law, as well as interpretative uncertainties related to newly introduced regulations as well as the absence or the insufficiency of precise information, clarity of regulatory and technical texts concerning connection of photovoltaic installations are very important issues that should be resolved. Moreover, insufficient transparency of policies and legislation, lack of dedicated institution, transparency procedure, administrative hurdles such as planning delays and restrictions, long lead-times in obtaining authorizations, obtaining permission costs, grid integration costs, levies and taxation systems and lack of coordination between different authorities are also important barriers that were detected during this analysis that was carried out in 14 countries of the European Union: Czech Republic, Germany, Greece, Spain, France, Italy, Cyprus, Lithuania, Latvia, Estonia, Poland, Portugal, Sweden and United Kingdom.

Currently, regulatory trends for solar PV systems are aimed at strengthening role of prosumers and popularizing regional and local cooperation. Transparent, unambiguous and stable regulatory system favours investments in PV. Policy-makers must promote, facilitate and reduce soft costs in order to decrease prices and, consequently, PV Levelized Cost of the Electricity (LCOE). Promoting low installation prices, facilitating customer acquisition and decreasing administrative barriers and permitting cost are some of the favourable policies which might be implemented. Compensation schemes, net-billing and net-metering, clearly are the most suitable strategies oriented at a global energy distribution model, through the expansion of the self-consumption concept. National, regional and local policy authorities also should take into account possible differences between the economic viability of the same PV system placed in different location under a common regulatory framework.

Legal and Administrative permitting procedures should also be streamlined and harmonized by a series of measures like reducing the number of public departments/staff involved in PV permitting and defining deadlines for authorities to deal with permitting requests. Member States must provide a facilitating framework to promote the development of renewable energy communities. This framework must ensure, among others, that unjustified regulatory and administrative barriers to renewable energy communities are removed, the participation in renewable energy communities is accessible to all consumers, including those in low-income or vulnerable households and the renewable energy communities are subject to fair, proportionate and transparent procedures.

In conclusion, despite significant progress in the field of RES regulations (specifically the implementation of the RES Directive), the development of photovoltaics in some countries is still being slowed by regulatory barriers. Regulatory and legal stability is of key importance for all investments. There is a need of protecting the small-scale self-consumer and exporter, since new technologies represent opportunities to decentralize and make flexible the supply of energy. As grids and markets become smarter, this emerging model of self-consumption is set to play a growing role in reducing consumers’ energy bills, particularly of commercial consumers such as SME, and promoting market integration of variable renewable electricity.