Photovoltaics in 2023. Summary and trends for 2024.

With an expert eye

Jacek Stężowski , eco -energy engineer and editor-in – chief of e-magazyny.pl

The year 2023 marked a significant period for the photovoltaic industry, characterized by its dynamic growth, introduction of innovations, a surge in installed capacity, and the reinforced prominence of solar energy within the global energy mix.

As of the end of November 2023, Poland has a total installed capacity of 16.53 GW in photovoltaic (PV) systems, according to data from the Energy Market Agency. Notably, this indicates a substantial growth, with the capacity expanding by over 4 GW throughout the year 2023.

Within this article, we have encapsulated the dynamic growth observed in the photovoltaic (PV) sector over the past 12 months. Key insights and substantive comments have been contributed by notable figures in the industry, including Ewa Magiera (President of the Polish Photovoltaics Association), Michał Marona (Country Manager at SolarEdge Polska), Marcin Dolata (CEO of EasySolar), and Bartłomiej Zysiński (President of SOLARTECH).

The most important events in 2023

Amidst the backdrop of dynamic growth, the past year witnessed several impactful events that left a lasting impression on the photovoltaic (PV) market. Marcin Dolata sheds light on these developments.

One of the pivotal moments for the Polish market was the amendment in the Construction Law, elevating the power threshold for photovoltaic installations from 50 to 150 kW. This crucial change means that installations within this power range no longer require a building permit or notification, thereby expanding opportunities in the industrial installations sector. Another significant event was the approval of the National Reconstruction Plan by the EU, paving the way for substantial funds dedicated to green investments in the upcoming years. However, the standout events of 2023 were the surge in electricity prices and the initiation of another recruitment drive in the Moje Prąd program. These two factors played a pivotal role in reinvigorating the photovoltaics sector in Poland.

Marcin Dolata, CEO of EasySolar

My Current

The significance of the Moje Prąd program for the development of Polish photovoltaics is underscored by Michał Marona.

In his view, the standout event of 2023 can be identified as the exceptional success of the “Moje Prąd” program. Each edition of this program witnessed the depletion of funds well before the scheduled completion date, highlighting the tremendous interest among Poles in investing in renewable energy sources. The substantial volume of applications for funding related to PV installations and energy storage reflects a burgeoning ecological awareness among the Polish population and their eagerness to participate in sustainable energy solutions.

Michał Marona, Country Manager at SolarEdge Polska

The application period for the Moje Prąd 5.0 program commenced on April 22, 2023. Within the initial 32 days, a noteworthy 12,552 applications were already submitted. The recruitment phase for Moje Prąd 5.0 was originally set to continue until December 22, 2023, or until the program’s budget was fully utilized, with an earlier deadline announcement on December 15.

By Monday, December 11, the fifth edition of Moje Prąd had garnered a substantial 88,185 applications for subsidies, amounting to a total of PLN 924.53 million. Notably, this edition marked a significant milestone as it allowed applicants to seek support for heat pumps and solar collectors for the first time in the program’s history.

KPO

On November 21, 2023, the European Commission granted approval for revisions to the National Reconstruction Plan (KPO), allowing Poland to access pre-financing exceeding EUR 5 billion at an earlier stage. These funds are designated for the execution of the REPowerEU plan, which aims to expedite the reduction of dependence on Russian fossil fuels among European countries. The primary focus of the plan is a swift and comprehensive ecological transformation.

The updated National Recovery Plan (KPO) places significant emphasis on the energy transition, allocating an impressive 46.6% of the available funds towards realizing climate goals.

The largest share of funds from the National Reconstruction Plan (KPO) will be directed towards the Energy Support Fund, receiving an allocation of up to EUR 17 billion. The fund’s primary objective is to provide additional investment resources for businesses directly shouldering the costs of the energy transition. The management of this fund will be overseen by Bank Gospodarstwa Krajowego.

Within the framework of the KPO, a specific target has been established: to achieve 30 GW of power from renewable energy sources (RES) in Poland by the end of 2026. This necessitates enhancing conditions for the development of these energy sources, leading to the implementation of 7 key reforms outlined in the KPO. The primary focus lies on expanding power transmission infrastructure with voltages of 220 and 440 kV, along with the acceleration of the digitization process.

Law

In 2023, a crucial amendment to the Construction Law, highlighted by Marcin Dolata, brought about significant changes demanded by the PV industry and other sectors.

According to Article 29, Section 4, Point 3, Letter c of the Construction Law dated July 7, 1994 (published in the Journal of Laws of 2023, item 682) – hereinafter referred to as “pr. bud.” – no longer necessitates a building permit decision or notification under Article 30 pr. construction for construction works involving the installation of heat pumps, free-standing solar collectors, and photovoltaic devices with an installed electrical power of not exceeding 150 kW (…).

This simplification of procedures has had a substantial impact on the expeditious execution of numerous projects and heightened the appeal of PV initiatives. Undoubtedly, this regulatory change is among the factors contributing to the increased installed capacity of photovoltaic installations in 2023.

It’s crucial to acknowledge that 2023 is an election year, and the change in government is likely to exert a significant impact on the entire renewable energy market.

The shift in government stands out as a pivotal event for the entire energy sector, directly shaping energy policy and development strategy. Optimism prevails with announcements of an accelerated energy transformation. Additionally, the preceding year witnessed three notable legislative changes. The previous government introduced liberalized regulations concerning direct lines and the possibility of sharing connection infrastructure, known as cable pooling. While the more accurate term is power sharing, as new investments in renewable energy sources can apply for power already allocated to another investor, they cannot share the technical connection infrastructure. Instead, they must agree on connection conditions with the DSO. Despite this being the initial step in the right direction, opening new opportunities for the industry, the lack of grid access remains a primary obstacle to the renewable energy sector’s development.

Furthermore, the industry sees substantial potential in the development of Corporate Power Purchase Agreements (cPPA) and photovoltaic installations producing energy directly for the needs of energy-intensive companies. Regarding the new government, one of its early decisions was not to extend the obligation to pay the so-called write-off for the Fund, which expired at the end of 2023. This decision has been received positively by the industry, as highlighted by Ewa Magiera, President of the Polish Photovoltaics Association.

Ewa Magiera, president of the Polish Photovoltaics Association

Trends in 2023

In the realm of photovoltaics, 2023 witnessed not just legislative changes but also significant shifts in the market and technology landscape. Summing up the past year, one cannot overlook the remarkable achievement of Olga Malinkiewicz and Saule Technologies.

A noteworthy event was the announcement of the Polish observation satellite STORK-7 in November, equipped with 28 perovskite cells from Saule Technologies. Launched on a SpaceX Falcon 9 rocket as part of the Transporter 9 mission, it marked the pioneering demonstration of perovskite operation in orbit.

Furthermore, Industry 4.0 tools, ranging from Big Data to Artificial Intelligence (AI), are assuming an increasingly crucial role in the photovoltaic industry.

Energy storage – increasingly important for photovoltaics

The year 2023 marked a pivotal period in the photovoltaics (PV) industry, globally and in Poland, where the imperative for energy storage became more pronounced. The assertion that further progress in photovoltaics is contingent on energy storage has emerged as the most pertinent in the short history of renewable energy.

Michał Marona emphasizes that throughout 2023, the PV sector witnessed a noteworthy surge in the sales of energy storage systems. A discernible shift in the approach to energy consumption profiles became apparent as consumers increasingly favored utilizing energy for their own needs over selling it back to the grid. This shift has significantly influenced the industry, fostering the advancement of energy storage technologies and encouraging business models centered around locally produced energy. The heightened interest in energy storage also responds to the planned introduction of dynamic tariffs in Poland during the same year and the imperative to enhance energy independence.

In the advancement of renewable energy sources, it is crucial to not only strategize for surplus energy but also to address periods when sunlight is absent or the wind is still. The solution lies in energy storage facilities, which, when integrated with photovoltaic power plants, offer complete assurance of energy supplies.

Bartłomiej Zysiński, President of SOLARTECH, emphasizes the role of energy storage in enhancing the synchronization of supply and demand. These storage facilities can accumulate energy during periods of low demand and release it during peak demand, contributing to the stability of the power grid. The intense discussion on this topic gained momentum in 2023, particularly following the first orders to shut down photovoltaic farms in Poland. While the energy storage market in Europe has been dynamically evolving for years, aligning with global trends and the progression of renewable energy in Poland, it becomes evident that the development of energy storage will serve as a determining factor for the further growth of the renewable energy sector in the country.

Bartłomiej Zysiński, president of Solartech

Bartłomiej Zysiński highlights a notable acceleration in the energy storage sector. Subsidies for home energy storage installations have emerged, with the President of the Energy Regulatory Office issuing commitments for the construction of energy storage facilities. Investors in the solar energy sector are actively engaged in projects integrating photovoltaic farms with energy storage options. Presently, investors are anticipating regulations that will streamline investments in energy storage facilities and facilitate their connection to the grid. This signifies that the momentum has been set in motion, and the industry can expect to witness tangible results in the near future.

Energy sales

When reflecting on last year’s trends, renewable energy auctions took center stage, revealing a shift in the preferred method of energy sales by producers. The November auction, led by the President of the Energy Regulatory Office, allocated 88 TWh with a total value of PLN 40.8 billion. However, only 6.8% of this, equivalent to PLN 2 billion, was ultimately contracted. While over 98% of winning offers were for photovoltaic installations, it underscores the rapid growth of the photovoltaic sector. Presently, Corporate Power Purchase Agreements (cPPAs) are gaining prominence for energy producers. These multi-year contracts, established directly between manufacturers and buyers, offer greater adaptability to market dynamics. Another significant trend is the industry’s increasing interest in renewable energy installations for meeting its own energy needs. With high consumption, having an in-house energy source is a sensible solution, providing resilience against market fluctuations, enhancing the company’s positive image, and addressing non-financial ESG reporting needs related to sustainable development in the areas of environment, society, and corporate governance, as emphasized by Ewa Magiera.

A Power Purchase Agreement (PPA), also known as a Corporate Power Purchase Agreement (CPPA), is a formal, typically long-term commercial agreement signed between the entity generating energy (energy producer) and the institution purchasing this energy. This agreement stipulates that the producer commits to supplying a specific amount of energy within a defined period and from a specified source, while the buyer agrees to purchase and pay for this energy at pre-established rates.

The previous year witnessed a surge in the number of Power Purchase Agreement (PPA) agreements on the domestic market, with over 20 notable Corporate Power Purchase Agreements (cPPAs) being concluded. This trend is regarded as a clear indicator that the energy transformation in Poland is gaining momentum, as stated by a representative of the OZEOS platform.

Several prominent companies embraced cPPA agreements, including Orange Polska, which opted for energy supplies from R.Power photovoltaic farms and the Enertrag wind farm. This deal covers a total volume of approximately 186 GWh of energy per year, constituting around 70% of the company’s consumption.

Golden Peaks Capital (GPC) entered a 12-year virtual power supply agreement (vPPA) with Mondelēz International, the owner of well-known brands such as Milka, Cadbury, and Oreo. The agreement encompasses 126 GWh per year from various renewable sources, with a maximum capacity of 109 MW. Furthermore, GPC supplies energy from photovoltaic farms to the Biedronka network through a 15-year cPPA agreement.

New technologies in the service of PV

Undoubtedly, 2023 stood out as the year of artificial intelligence (AI), and its impact has significantly influenced the solar energy sector. AI has seamlessly integrated into every facet of the photovoltaic (PV) industry, ranging from the production of photovoltaic modules, optimization of farm operations, to the sale of energy.

To delve deeper into the ways artificial intelligence supports photovoltaics, you can find more information in the article titled “How does artificial intelligence support photovoltaics?“

As Marcin Dolata underscores, drones have evolved into incredibly valuable tools amidst the integration of Industry 4.0, particularly with the infusion of artificial intelligence (AI) in photovoltaics.

Dolata highlights an intriguing trend in the field— the increasing use of drones during the offer stage for both residential and industrial installations. While companies have traditionally relied on designs primarily using Google Maps, a noticeable shift has occurred in 2023, with EasySolar designs increasingly being crafted using photos captured by drones.

For a more comprehensive exploration of the utilization of drones in the energy sector, especially amid the era of transformation, readers are encouraged to explore our article titled “Drones supporting the energy sector in the era of transformation.“

Forecasts for 2024

Looking ahead to 2024, our experts have offered predictions for the photovoltaic (PV) sector. Marcin Dolata highlights a noteworthy shift in the Polish PV industry towards increased professionalism, leading to significant changes in the market.

Dolata, referencing the trend of designing with photos captured by drones, notes a rising level of professionalism within the industry. This heightened professionalism, in turn, results in an increase in customer expectations, particularly noticeable at the sales stage. The main challenge for companies in the coming year will be to not only keep pace with but also surpass the rapidly growing expectations of customers. Additionally, there is a challenge for tool providers, such as EasySolar, to equip companies selling photovoltaic installations with increasingly advanced design tools, enabling them to effectively compete for customers with ever-growing expectations.

According to Michał Marona, the year 2024 is poised to bring substantial changes and development in the photovoltaic (PV) sector, marking a point where innovation becomes a true game-changer.

Marona anticipates that the introduction of dynamic tariffs is likely to intensify interest in energy storage, as consumers aim to maximize the benefits of their own energy production. In response, the development of intelligent energy management systems, such as the SolarEdge ONE system, utilizing the Internet of Things (IoT) and artificial intelligence, will play a crucial role. These systems will enable more effective and automated management of energy consumption.

Furthermore, Marona predicts that the popularity of PV installations in multi-family buildings may rise, driven by support in the form of renewable energy grants and virtual power plants. This shift will necessitate the PV sector to adapt to new business and technological models. While these changes present challenges requiring an innovative approach and continuous development, they also create new opportunities for the photovoltaic industry.

Bartłomiej Zysiński highlights a crucial challenge for the photovoltaic (PV) sector in 2024 – the increasingly visible staffing problem. The shortage of specialists in the PV field has the potential to impede the development of the entire industry in Poland.

Zysiński notes that with the growing renewable energy market, there is a notable scarcity of specialists possessing the necessary competences for the development of PV farms and energy storage facilities. To address this issue, Poland must concentrate on bridging the gap between skilled professionals and businesses. To contribute to this effort, cooperation has been established with the Warsaw University of Life Sciences (SGGW) this year. This collaboration encompasses joint education initiatives for specialists and the implementation of research projects related to the development of renewable energy technologies in Poland.

In a related context, Ewa Magiera emphasizes the fundamental issue of grid modernization for the PV sector and underscores the role of agriculture in the development of PV.

In the early stages of the year, optimistic prospects are evident, largely tied to the announcements of changes in the energy policy of the newly elected government. However, the primary challenge for energy transformation remains the issue of the network. The outdated system, lacking capacity for connecting new renewable energy sources, necessitates a comprehensive expansion and modernization plan, involving substantial financial investments. Postponing these necessary upgrades not only hinders the development of the energy sector but also diminishes the competitiveness of the entire economy.

Anticipating an update to Poland’s Energy Policy 2040, there is a pressing need for a comprehensive and coherent plan for the energy sector, which has been lacking for an extended period. Simultaneously, efforts are underway at the Polish Photovoltaics Association to promote the concept of agrovoltaics. Aligned with climatic and economic challenges, this approach meets the needs of the agricultural sector. By combining agricultural activities with PV energy production, it maximizes the full potential of the land and elevates agriculture to a new level of competitiveness.

Looking ahead, the necessity for Environmental, Social, and Governance (ESG) reporting could significantly impact the sales potential of Polish farmers. Client companies are expected to seek suppliers actively contributing to emission reduction and/or producing from their own renewable energy sources. Consequently, sustainable production, the advancement of green energy, and the reduction of emissions are anticipated to emerge as key directions for economic development.