Aistis Radavičius, Lithuania Country Manager: Solar energy: eternal love or a short romance?

The Spinter Research survey published in July was probably the first time in Lithuania's history to measure the country's population's preference for different methods of electricity generation. Solar energy was not only the most supported, but also equally positive regardless of age, education, income or place of residence of the respondents.

July 28, 2023

It is worth briefly recalling the results of the survey: 67% of the country's population support solar power plants in general, 48% support wind power, 23% support nuclear power, 22% support hydroelectric power and 12% support thermal power stations (in Lithuania's case, this usually implies gas plants). Support for solar does not decrease when asking what kind of power plant would not cause discomfort to people within a few kilometres of their homes: here, solar retains 65% support, while support for wind is already at 31%, while support for nuclear drops to 14%, for hydro falls to 10%, and support for thermoelectric remains stable at a low level of 12%. The survey was carried out on behalf of the Lithuanian Wind Energy Association (LVEA).

(Support for various electricity sources: in general and near home)

The survey is also interesting for the Lithuanian solar market because of the political context - at least for the past year, the development of commercial solar parks has been politically blocked, with the protection of the interests of the producing consumers and the energy communities being the core argument. 

The Ministry of Energy has reserved significant renewable energy capacity for communities, although they have been very slow to develop. Meanwhile, for legal entities wishing to install solar power plants, this leaves no grid capacity. 

Authorities are opting for subsidies from EU funds for rooftop or remote solar power plants, but are holding back the majority of investors who want to build solar power plants entirely with their own money. This is an artificial juxtaposition between generating consumers and commercial parks, the futility of which is illustrated by the favourable attitude of the population towards all solar energy.

While decentralised production itself is certainly welcome, it is clear that not every unemployed person, schoolchild, student or pensioner can afford to own their own or remote power plant. At the very least, owning a house and an initial investment of between €3,000 and €5,000 is required. But 57-72% of all the above-mentioned groups of respondents still support solar energy for the time being, even if they do not benefit directly from it. 

The Lithuanian poll did not ask about the reasons for the support, but this is partly explained by the July Eurobarometer survey, in which about 85% of Lithuanians agree that renewable energy can reduce prices. 

Solar and wind energy are not to be contrasted in any way. The country's energy industry recently celebrated the fact that for the first time since the closure of the Ignalina nuclear power plant, Lithuania achieved 100% domestic electricity generation for a few hours, thanks to the coincidence of strong solar and wind production and the switching on of the Kruonis pumped-storage power plant. 

But with adequately developed solar capacity, 100% local generation would be achieved not just for a few hours a year, but for most of the warm season. Solar power plants produce mainly in April-October, while wind is indispensable in the dark times of the day and year, so the two renewable energies are perfectly compatible in terms of increasing green generation and making rational use of infrastructure.

The problem is that the boom in generating consumers that started last year is fading, market is approaching saturation, but most of the large solar parks that could add thousands of megawatts of capacity in just a few years and bring significant price reductions, are still stuck. 

In the spring, Lithuania formally resolved the much-derided 2GW installed capacity limitation by proposing to curtain production instead. Unfortunately, the vast majority of private commercial solar park developers quickly faced a new problem: banks unanimously refuse to finance projects where electricity production could be suspended indefinitely at any time. As a market colleague put it, the current situation can be likened to trying to get a mortgage when your employer has stipulated in your employment contract that they may not pay you 100% of your salary at any time.

The EU regulation stipulates that Member States may not limit production from renewable energy to more than 5% of annual production. Such a proposal was also tabled in Parliament, but was rejected on the initiative of the Energy Minister.

Therefore, the strong popular support for solar energy may eventually turn into disappointment if only a small proportion of generating consumers directly benefit from it. After all, developing wind alone is not enough to meet the expectation of lower prices - it requires significant additions to the country's generation portfolio, as well as encouraging the installation of storage facilities by creating a competitive market for them. 

Rooftop and remote power plants are a great solution for those who want or can install them, but only large-scale solar parks can reduce the cost of electricity for all residents and businesses in a country due to economies of scale. Otherwise, the sun may eventually become something for a "chosen few" in the eyes of the "common man".

We would strongly urge decision makers to take note of the surprisingly universal support for solar energy and translate it into rapid development at both micro and macro levels. 

At the macro level, a clear cap on the amount of generation per year and a compensation mechanism beyond that would be sufficient to remove financing barriers. This is especially the case since this is also foreseen in the EU regulation, which should be directly applicable to the setting of the maximum possible production limits. An additional compensation mechanism for exceeding the limits would motivate the network operator to make the effort, invest and improve the infrastructure so that curtailment is not needed in practice.

It is also necessary to review the reservation of power for individual groups of consumers - municipalities, budgetary institutions, churches - which do not have the competence to organise the construction of power generation facilities themselves. Such organisations should be encouraged to sign power purchase agreements with electricity producers, as one building management company in Vilnius recently did. Such a move would free up the grid, capture good, stable prices of green electricity for the consumer, generate a steady income for the producer, and actually accelerate the development of solar energy at micro and macro levels.

The average citizen supports solar energy because he sees a power plant on his neighbour's roof, does not hear or smell it, but is aware of his neighbour's reduced bills.Developers of commercial solar parks want to offer the same principle, but on many times the scale and without subsidies. I would like the authorities to listen to the views of the population and to take them into account when formulating energy policy.

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