Analysis of French photovoltaic auctions 2021-2023 shows price increases despite lower solar module prices – pv magazine International

September 16, 2024 Gwenénaelle Deboutte

From the magazine pv magazine France

The French government launched a seven-round tender in July 2021 that aims to allocate around 28 GW of renewable capacity by the end of 2026.

CRE, the French energy regulator, has published a report analysing the results of tenders conducted between 2021 and 2023. By the end of 2023, CRE had analysed 14 GW of tenders and allocated 10 GW, of which 40% was allocated to onshore wind and 60% to ground-mounted (4,266 MW) and large rooftop (1,290 MW) photovoltaic systems.

CRE noted that tenders began in the midst of the energy crisis, which led to high inflation and a 10% abandonment rate for selected projects. However, the situation has improved since early 2023 thanks to updated tender specifications and more stable costs.

Compared to the previous CRE4 tender series, where prices were decreasing, this new series saw an increase in final prices, reflecting the increase in project costs. Ground-mounted PV projects saw a 39% increase in average final prices, from €0.0588 ($0.065)/kWh to €0.0891/kWh, with costs increasing from €0.048/kW installed to €0.077/kW installed. These prices now exceed recent forward electricity prices of €0.060/kWh to €0.075/kWh.

For large rooftop PV projects, final prices rose by 23%, from EUR 0.0831/kWh to EUR 0.1021/kWh. CRE attributed these price increases to raw material and logistics tensions, inflation and rising interest rates. Capex increased by 9% for ground-mounted PV installations and by 2% for rooftop installations between 2021 and 2023. In 2023, average costs were around EUR 935/kW for ground-mounted parks and EUR 1,250/kW for rooftop projects. Ground-mounted installations generate costs mainly for the purchase of modules (25.5%), while rooftop systems spend the most on mounting structures (31.5%) and modules (22.1%).

CRE also said the expected drop in module prices has not materialized in recent tenders, unlike in other countries such as Germany. The report suggests rising average interest rates, which have more than doubled from 2021 to 2023, could be a factor.

Operating costs increased by 29% for ground-mounted PV systems and by more than 6% for large rooftop systems, ranging from €20/kW/year to €25/kW/year.

The majority of selected project developers plan to use PV modules from Chinese manufacturers (over 80% for ground-mounted systems and over 85% for roof-mounted systems). European manufacturers account for less than 5% for ground-mounted systems and less than 10% for roof-mounted systems. Of the selected module manufacturers, Chinese manufacturers Jinko, JA Solar and DMEGC dominate the ground-mounted segment, while Jinko, DMEGC and JA Solar are also leaders in roof-mounted systems, along with three French manufacturers: Reden, Voltec Solar and Photowatt.

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