As austerity measures dry up entire professional sectors, Greeks are asking what type of long-term plans are being developed to promote the increased productivity and economic growth that is needed to carry Greece toward solvency.
One of the resources that Greece abounds in is sunshine, which has the potential to be a part of the road to Greece?s economic salvation as well as environmental sustainability .
In an interview with Kathimerini English Edition, Marios Tsakiris, a project manager at E-shop.gr Energy Systems, stressed some of the positive aspects of the increased penetration of photovoltaic (PV) systems in Greece.
?PV represents a decentralized energy source that results in lower energy losses for the system, lower grid infrastructure costs and carbon dioxide-free power generation,? explained Tsakiris.
The current grid system relies upon a few large-scale power generation stations, mainly operating on lignite coal, fossil fuels and natural gas, that employ expansive transmission systems to deliver power to consumers. Beyond the depletion of these finite resources and the constant release of emissions into the atmosphere, another significant problem with this type of system is that the further the consumer is from the power station, the greater the loss of power due to voltage drop that results from the transmission of electricity over great distances.
PV systems have the capability to produce power locally and therefore offer the potential to minimize reliance on an expensive transmission systems, while decreasing the amount of energy loss related to transmission distances.
In addition to the ability of photovoltaics to fulfill local power consumption needs, there is also the added benefit that photovoltaics represent a renewable energy source (RES) that has a minimal environmental impact, allowing Greece to wean itself off lignite, which produces the highest percentage of carbon dioxide emissions among types of coal.
Incoming European Union regulations outlining the auctioning of carbon emissions will also drive up the cost of electricity that is produced from fossil fuels. Bloomberg reported that the EU plans to gradually phase out free allowances and will auction off about 60 percent of all allotted CO2 permits in 2013. While this legislation may cause a spike in the cost of electricity, it can at the same time increase the allure, viability and growth of the RES sector.
According to a report by the Hellenic Association of Photovoltaic Companies, ?the quantity of CO2 saved by each kilowatt of PV is equal to the amount that would be absorbed by 100 trees every year or the emissions of a medium-size car running 7,000 km/year.?
If you take into account that a single residential or small enterprise rooftop PV system could easily have an output of 10 kWp, or kilowatt peak, that means just one system, running at 25 percent of capacity, can save an equal amount of carbon dioxide to that absorbed by 250 trees or emitted by a car running 28,000 km/year.
Beyond the positive environmental implications that PV systems present, there are currently some significant financial benefits for those interested in investing in a photovoltaic system, with the most significant being the feed-in tariff (FIT), which were enacted in Law 3468/2006. These tariffs guarantee a specific price at which PV-generated power will be purchased, per megawatt hour (MWh), by the Public Power Corporation (PPC).
The majority of FITs are guaranteed for 20 years and are eligible for renewal upon expiration, with FITs for rooftop PV systems being granted for 25 years. For the smaller rooftop systems, the FIT is set within 15 days of application for the license while the FIT for the larger PV systems is set when the local branch of PPC accepts the system?s generation capacity.
Tsakiris explained that new RES legislation was passed in 2010 and simplified the bureaucratic process for applying for a license. ?Now the application procedure for small photovoltaic plants that are less than 150 kWp are transferred to the local PPC department, which is the first one that gives the OK for network absorption capacity and connection terms, while larger systems are still authorized through RAE [the regulatory authority for energy] and the associated prefecture.?
Other sections of the legal code were also simplified, which has greatly benefited the PV sector while piquing investor interest. The main drawback of this increased interest, however, has been an inundation of applications and a resulting backlog of projects.
FITs for PV systems fall into four categories: Rooftop systems of 10 kWp or less, mainland grid of 100 kWp or less, mainland grid of more than 100 kWp, and autonomous island grids. In general, the FITs paid for rooftop systems are the highest of the four categories and are currently set at 550 euros per MWh. The scheduling for FITs has been designed to gradually decrease in conjunction with the reduction in the fixed costs related to PV technology, although once a FIT is granted it is locked in at that rate for a minimum of 20 years with an annual adjustment to compensate for inflation that amounts to 25 percent of the previous year?s consumer price index.
Rooftop systems are the easiest category of PV system in terms of installation. If you have the money or bank backing you can have a system, upon PPC approval, installed on your building within approximately two months.
At current rates, a 10 kWp rooftop system comes with a price tag of around 35,000-40,000 euros, including installation, and generates on average revenues of around 7,400 euros annually. At this rate, the system pays for itself in about five to seven years, depending on the financing and taxes involved. By the end of the 25-year period this investment has the potential to yield a profit of over 100,000 euros without any adjustment for inflation. This takes into account the average annual loss of about 1 percent of the panels peak power output.
Other incentives that exist for those interested in investing in rooftop PV systems of 10 kWp or less include that income generated is tax-free for both private individuals as well as for small enterprises that consist of 10 or less employees and have less than 2 million euros? turnover annually.
To date, there has been around 250-300 MWp of cumulative installed capacity with a projected installation rate of around 200 MWp annually. At this rate, the ceiling of 2,200 MWp installed by the year 2020, set by Parliament, will be reached. It is important to note that by 2010, the RAE had received applications for nearly 3,700 MWp worth of projects. The Center for Renewable Energy Sources and Savings (CRES) has estimated a potential for 2,000-2,500 MWp.
Despite these numbers, no installation is guaranteed until it is actually installed.
One factor that has led to such a large number of proposals being submitted is that licenses for PV systems can be sold to another purchaser once granted by the RAE. The idea is that a property owner, who does not have the financial means to invest in a PV system, can obtain a PV license and then sell it and also lease the accompanying land to the purchaser. This has led numerous property owners to pay experts to submit the appropriate paperwork on their behalf.
This process can cost anywhere from 1,500 to 5,000 euros with varying results. Although some have been successful in brokering deals, many have not found willing buyers for their licenses.
This has created problems where licenses have been granted to individuals who do not have the investment capital to build the PV installation, resulting in the exclusion of investors who have the capital or forcing them to purchase a license for as much as 100,000 euros. Also, in a specific prefecture there may be a limitation on absorption capacity, so unused issued licenses may be blocking out real investors. On the other hand, those who want to invest in the Greek PV market and do not want to deal with Greek bureaucracy are free to walk right into the market for a price. Measures have been taken to require that many of the previously proposed projects are implemented by 2013, after which they will become void, allowing room for new applications.
The PV sector is one of the few areas of the Greek economy that has continued to grow despite the economic meltdown. It has been reported by Helapco.gr that in the past four years, the sector has generated at least 4,250 full-time jobs. Established in 2002, HELAPCO is a nonprofit organization that represents photovoltaic firms in Greece.
There has been investment in all areas related to the PV sector, ranging from the development of industrial manufacturing plants in both Patra and Tripoli to numerous RES startup companies handling both PV components and the installation of systems.
Despite all this activity, some investors are wary of putting their money into PV systems in Greece due to uncertainty in the market generated by the country?s economic woes and plans to privatize portions of the pubic sector, namely PPC.
Two questions are looming: Would a default affect the ability for the FITs to be paid, and how would the privatization of PPC affect the RES market?
Tsakiris had this to say about the future of photovoltaics in Greece: ?In energy systems, the constraints are always technological, societal and political.?