SEU and Photovoltaics in Italy: the opportunities are there, but more know-how is still needed

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The regulatory framework is favourable and the economics are valid: with a photovoltaic SEU (Efficient System for Users) the customer's bill can be cut down by as much as 20%, guaranteeing the operator returns comparable to those of the fifth feed-in incentive programme (conto energia). But to take avail of the opportunities, new, more specific skills are needed. This issue will be on the table at a Solarexpo convention.

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If we look at electricity prices and production costs, photovoltaic energy with Efficient System for Users (SEU) (Sistemi Efficienti di Utenza), in which the energy sold to customers is produced directly “at home”, has been economically competitive in Italy for some time now. The law is also favourable. But, as the analysts of eLeMeNS, who will animate the convention which will be held at the Milan MiCo as part of Solarexpo-The Innovation Cloud 2015 on 10 April 2015, explain, the operators in this market must acquire new know-how.

“With the most recent initiatives on self-consumption charges of the “Competitiveness Decree” and the new provisions on SEUs, the regulatory system is favourable and well defined”, Barbetti explains. And there is no shortage of potential customers:small- and medium-sized enterprises, especially in the energy-intensive sectors, are the target”.

“With the fall in photovoltaic costs, energy can be supplied at € 95-100/MWh, plus VAT, fixed costs and 5% of the system costs. With SEUs, customers can be guaranteed savings on their bills up to 20%, or more if used in combination with other initiatives which reduce heat consumption.”

There will certainly be profit for SEU providers: “the economic return is comparable to that obtained with the fifth feed-in incentive programme (conto energia),” Barbetti explains.

The obstacle seems to be cultural: “Customers according to Durante are not aware of the advantages they can obtain with an SEU. Photovoltaic operators – unlike co-generation operators, who have always reasoned in this way – generally speaking are not ready for the new business models.”

What know-how is missing? “Understanding customer consumption, and knowing how much energy the business needs and how it uses it”. A company may be an excellent customer for a photovoltaic SEU if it works seven days a week in the daytime, while a company with the same consumption which works a three-shift day, also at night, but does not consume on Sundays and public holidays, does not have a suitable profile.

Another aspect to be considered is load management: “for example, you have to know that at a certain time of day a customer will start up a press or a cooling plant”. In general, “energy is no longer a commodity but rather a service”.

A photovoltaic operator must become a kind of energy manager: “Since the production profile never coincides perfectly with the consumption profile, you must buy energy for the customer at advantageous prices and exploit the excess production which must be put into the grid: you also have to be a trader in a certain sense”.

Another aspect to consider is the customer’s economic solidity: “The closure of a customer’s business Barbetti explains would compromise the business plan, even if in this case the system could be removed and re-used, limiting losses”.

“For this reason – Durante adds – the relationship with banks is also changing; they now operate above all in corporate finance, basing their work on the SEU customer’s creditworthiness, and hardly ever on project finance. The necessary risk mitigation elements will also need to be found for the producer, linked hand in glove to the customer’s fate”.

In short, new paths are opening up for the photovoltaic business post-incentives, paths which may be complex but which are highly attractive.

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