by Kristiaan Versteeg, Solarplaza
The Dutch solar PV market is on the verge of tremendous growth and is set to - for the first time ever - exceed 1 GW of newly installed capacity in 2018 (GTM, 2018). This article will discuss some elements involved with the growth and trends of the Dutch PV market. It will include status and comparisons of the Dutch capacity versus European and global capacity; the status of the approved SDE+ subsidized projects; the division between the different market segments; and the progress of renewable energy in the light of the EU targets.
Our analysis shows that the market is growing at a fast rate and is accelerating. A collection of large projects, being realised through the SDE+ subsidy, is under construction, as was already visible in the ‘Top 25 existing projects’ Solarplaza just published and will become even clearer with the ‘Top 20 announced projects’ which will be published next month. The Netherlands is one of the fastest growth markets in Europe, and is increasing its share in the global and European market. Furthermore, in the course of this year, two more SDE+ rounds with a combined €12 billion budget will open up, allowing for continued growth (RVO, 2018)
In 2017, the total cumulative capacity of the Dutch PV market reached 2.9 GW. A new record of 853 MW was installed according to the first market data that was published (Polder PV, 2018), representing a 42% growth number. Looking at the list of projects that were granted SDE+ subsidy in 2016 and 2017, a further growth of at least 30% is expected. This would mean that the 4 GW barrier will be broken in the coming year, with capacity continuing to expand towards 5,5 GW and more than 7 GW respectively in 2019 and 2020 (Graph 1).
Graph 1 - Current & Forecasted installed PV capacity NL (PolderPV, CBS, CertiQ, Solarplaza Estimation)
When looking at how these figures stack up against the total European and global PV capacity, it becomes clear that the Dutch share in the global and European market is growing. In the current situation, the Dutch capacity represents 0.71% of the global and 7.2% of the European solar capacity, up from 0.66% and 5.2% respectively in 2016 (Graph 2 & Graph 3). The Dutch market is one of the fastest growing markets in Europe right now. While the Netherlands added 853 MW of solar capacity in 2017, traditional solar powerhouse (and a much larger country) Germany increased capacity by 2.1 GW (Fraunhofer ISE, 2018). In 2016, these figures amounted to 530 MW and 1.5 GW respectively. This can be taken as another indicator of the fact that the growth rate of the Dutch market is quite unique and impressive.
Graph 2 - Global Cumulative Installed Capacity vs. NL %-share (GTM, CleanTechnica, PolderPV, CBS, CertiQ)
Graph 3 - NL as part of EU market volume (annual added capacity) - (InterSolar Europe, SolarPower Europe, PolderPV, CBS, Solarplaza Estimation)
When comparing capacity additions from dominant renewable energy technologies within the country, we see solar power quickly catching up with wind power (Graph 4). Another interesting market fact to consider is the amount of watt peak capacity per citizen of the Netherlands, as compared to Germany, which can be regarded as a relatively mature solar market (displayed in Graph 5) The Netherlands is quickly growing its solar capacity per citizen, but still has a long way to go before it can meet or transcend the German figures.
Graph 4 - Development Wind and Solar Power in NL (CBS Statline, Solarplaza Estimation)
Graph 5 - Solar Capacity Wp/Citizen - Germany vs. NL (Fraunhofer ISE, CBS, Worldbank, PolderPV)
Current trends are expected to continue over the next year. The division between the residential, commercial and utility scale market segments for the new capacity additions of 2017 can be seen in the pie chart below. The commercial and industrial segment captured an almost equal share of the installed capacity, with utility-scale capacity making up for just 5% of installed capacity (Graph 6). It can be expected that the utility-scale and commercial segment will continue to grow strongly as the list of large projects, with a SDE+ subsidy granted, in the Netherlands is expanding quickly. 2017 saw a massive amount of applications for the SDE+ government subsidy, making large PV projects a financially attractive investment. After the first round of 2017, 4386 solar PV projects for a total of 2.3 GW of capacity were approved. In the second round, another 5456 projects for a total of 3.2 GW were submitted. These projects are still awaiting approval. (Graph 7 & 8). However, it is still unclear what portion of these application will actually be realized. At this point, between 40% and 50% of the projects from the 2014 subsidy rounds have been realised. Many projects from the 2016 and 2017 subsidy rounds are expected to reach COD (commercial operation date) this year, with several large projects already completed in the last two months, and another series of projects scheduled to be completed over the next weeks. Based on the €12 billion SDE+ budget in 2017 and 2018, the market is likely to see a continued strong growth for C&I and utility scale projects.
Graph 6 - Division market segments installed capacity 2017 (GPC Europe)
Graph 7 - (SDE+ PV project applications - Rijksdienst voor ondernemend Nederland (RVO)
Graph 8 - SDE+ PV Projects MW in database (October 2017) - Rijksdienst voor ondernemend Nederland (RVO)
The regulatory environment for renewable energy, and specifically for solar PV development has been strong over the last year. This provides strong support for further growth over the next years in all segments. This year, another €12 billion SDE+ subsidy for RE projects is planned for two rounds in the spring and the fall. There is discussion going on considering the technology neutrality of the subsidy for the upcoming round, which will be opening in March. The specifications of the subsidy for solar PV have been slightly altered, which led to political discussions. Also, the Dutch Solar Industry Association ‘Holland Solar’ expressed worries regarding the fact that the latest changes could have a negative impact on new project development. For now, minister Wiebes does not consider an adjustment for the upcoming round desirable, but will consult the industry to determine whether adjustments need to be made for the round in the fall, to ensure the quality of the subsidy and the viability of solar PV projects to be realised (Solar Magazine, 2018). In terms of residential projects, the Dutch citizens have been enjoying a net-metering structure over the last years. The current minister has announced that net-metering will continue in its current form until 2020, and will then be converted into a feed-in-tariff. The exact specifications will be presented before the coming summer, to ensure stability and trust for this industry segment. The residential market is therefore still expected to grow strongly, as an incentive in some form will continue to exist, and costs of solar PV are still significantly decreasing, making solar an attractive investment for private households.
The priority for the Dutch government to create adequate incentives for renewable energy development is high. The EU targets that need to be reached are ambitious and still quite far away for the Netherlands. The current share of renewables in the energy mix stands at 6%, while the first target of 14% is due in 2020 (Graph 9).
Graph 9 - NL distance to renewable energy targets EU (CBS, Reuters, Government of the Netherlands)
Meanwhile, some leading players are starting to establish themselves in the Dutch market. The landscape of component suppliers, asset management and ownership and developers and EPCs used to be very diverse for a long time. Now we see that familiar (bigger) names are starting to pop up more frequently, as is also visible in the Top 25 projects list and article. When it comes to components, frequently returning brands are: SMA, SolarEdge, Huawei, Canadian Solar, First Solar, Winaico, REC, Axitec, Talesun, SolarNRG, SolarAccess. Considering asset ownership and management there still aren’t many prevalent parties, but we do see parties like Groenleven and Ecorus involved in multiple projects, besides many private asset managers as well. The range of developers involved in multiple large scale projects includes parties like Ecorus, SolarEnergyWorks, Groenleven, Kieszon, SolarCentury, Zonel and Solarfields.
The Dutch PV market has grown quickly over the last year and will continue to do so at a rapid pace in the coming year. There are many large scale projects in various stages of development, utilising the governmental SDE+ subsidy. Whereas the year 2017 saw a record of 853 MW of new solar capacity additions, in 2018 the Dutch PV market will exceed 1 GW of newly installed capacity, making this the perfect time to enter the market. In a local market like the Netherlands, there are ample opportunities for experienced (foreign) parties to step in and contribute much-needed capacity and experience to the industry, in order to keep up with the growth in PV projects. On May 17th, the 10th annual and jubilee edition of The Solar Future NL will take place in DeFabrique, Utrecht. All leading stakeholders in the Dutch market will be represented at this event. Current registrations show an unprecedented interest in terms of attendees and sponsors from The Netherlands and more than ever before from foreign companies.