Energy 11 October 2023, 1:05pm

Solar panels: many have lost a year on a new feed-in controlling option

Major András

While non-residential household solar PV capacity has already increased more in the first half of this year than in any previous year, following earlier claims, the market for reverse power controlled solar plants (which can only produce as much energy as the user needs at any given moment, without feeding it back into the grid) is showing a decline, most likely related to the tightening of technical requirements last year.

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Significant downturn

It is not only in the markets for grid-connected residential and large commercial solar PV that new investment has been hampered during the worst of the energy price crisis, but also in off-grid solar PV systems, which are typically used by companies with high electricity consumption to reduce their electricity bills, new data confirm.

As the statistics obtained from the Hungarian Energy and Public Utility Regulatory Office (MEKH) show, while in 2022 there were many more so-called reverse power controlled solar power plants than before, with significantly higher average and aggregate installed capacity, in the first half of 2023 there was a significant drop in both installed capacity and number of units,

probably due to the fact that an obligation introduced last year halted many planned investments.

At the end of the first half of 2023, the total capacity of the licensed and unlicensed reverse power controlled solar plants was nearly 136 MW, and 676 such systems were in operation in Hungary. The vast majority of these are small, non-household solar plants with an installed capacity of less than 0.5 MW.

By contrast, in the small solar PV installations of up to 50 kW in the household size (HMKE) segment, new entrants from non-natural persons, a significant proportion of which are likely to be SMEs, appear to have surged in line with residential installations. Capacity has already expanded at a higher rate in the first half of this year than in any of the previous years, thanks to claims submitted before the feed-in stop.

No one knew how to meet the standards

There has been a lot of talk recently about the barriers to grid connection for newly installed HMKEs and large solar farms, but relatively less attention has been paid to solar PV systems that are designed technically to prevent the electricity they generate from being fed into the grid.

Yet these so-called reverse power controlled solar PV systems can

play an important role in meeting part of the electricity needs of industry and other businesses,

reducing their exposure to electricity market prices and thus their associated costs. Since energy prices also represent a significant part of the production costs of firms, they have a major impact on inflation and the competitiveness of the economy.

A reverse power controller (RPC) are a kind of anti-islanding protection device built into the solar PV system, only even without the option of feeding power into the grid. If there is already severe grid congestion, system operators are obliged to equip the PV system with a technical device that ensures that there is no electricity fed into the public grid at any time. As such, the system must implement a so-called export limitation scheme (zero feed-in / zero export) whereby either the energy generated is consumed by the producer (100 % consumption) or the PV systems power output is limited.

For the above reasons, the demand for reverse power controlled power plants increased substantially following the surge in market gas and electricity prices during the energy crisis, but changes in the regulatory environment made their installation temporarily virtually impossible during this period. Although the obligation to install batteries, which had been imposed on them in June 2022, was withdrawn in December by a government decree, the obligation to provide balancing power regulation capability (Automatic Frequency Restoration Reserve or aFRR) for solar plants with a capacity of more than 200 kW remained in force.

The latter essentially means that the system operator can shut down (curtail) the generation of a power plant at any time within 1 minute if he/she deems it necessary to maintain a balance between generation (+ imports) and consumption, thus ensuring security of supply. (The reason for this is that although these plants do not deliver any electricity to the grid, they have the ability to significantly influence their consumption from the electricity grid through their generation, which can cause huge swings in system load in a short period of time, especially in sunny or erratic weather, challenging the system operator responsible for balancing the system.)

Although the introduction of this curtailing option was already perceived badly by large consumers, the main problem for them was not the introduction of this option, but the fact that the technical specifications were practically unintelligible to them, so that

no company was willing to undertake the technical installation and certification necessary to comply with the aFRR obligation.

As a result, companies looking for a way out of installing their own solar PV systems due to high market energy prices were unable to install such solar power plants for a long time, which made them particularly vulnerable in the circumstances.

One year lost, but the market may recover

The situation has roughly reached the point where the companies dealing with this are now able to provide reasonable bid packages for aFRR certification and technical deployment, but since nobody understood the regulations last year and therefore nobody could comply with them,

we lost one year in this respect and this segment has temporarily dropped out of the market completely,

Ádám Szolnoki, president of the MANAP industry association, told Portfolio, and according to him this is also clear from the new data.

However, due to the relative normalisation of energy prices in the market, companies' demand for reverse power controlled solar panels has declined somewhat to date, but there is still demand for them, the expert said, adding that he is confident that

the segment, which is also important for the solar industry, is slowly recovering and is poised for growth.

There are not many companies building aFRR capability in this country, as it is a very specific market, technology, service and needs. The obligation also applies to large solar farms, but as new plants there will not be connected until years later, even 2028, due to grid constraints, there is no urgency to meet the standard, and the obligation does not yet apply to the previously licensed solar farms being built today.

The turnaround time for the installation of reverse power controlled solar plants can be shorter than for commercial solar parks, optimally even less than 6-9 months, but the obstacle of the aFRR obligation has stalled many investments, so according to Ádám Szolnoki, the installations in the first half of this year were probably started last year, before the introduction of the obligation, so he believes that the statistics that will be published later will be even more telling.

Despite network problems, the doubled target can still be reached

The common underlying cause of the difficulties faced by all segments of the Hungarian solar sector during the energy crisis is that while Hungarian solar capacity has been growing rapidly in recent years, even at international levels, the grid and system developments needed to further integrate weather-dependent generators have not kept pace. Improvements to address the challenges posed by solar PV both at the system level and in the local distribution networks are already underway and ongoing, so that solar PV capacity growth should continue in the coming years and the feed-in restrictions on HMKEs will be lifted in most parts of the country from January.

Despite the challenges, Hungary's solar capacity has been expanding at a record pace in 2022 and this year, thanks to previously issued permits and accepted applications. According to the National Energy and Climate Plan (NECP), which is currently being updated, and the Ministry of Energy, it is expected to grow from the current 5,000 MW to nearly 12,000 MW by 2030, almost double the original NECP target. Based on current trends and information,

this seems achievable even as many solar PV investors have abandoned their domestic development plans due to difficulties,

and the number of new solar PV applications has fallen to a fraction of what it was in the past 1 year, excluding an unusual spike in early September.