06/11/2012 02:02
“We must learn from solar industry mistakes of other countries,” experts tell Herzliya conference sponsored by private firms.

The Israeli government is not yet fully committed to the implementation of solar energy and other renewable energy resources and must learn from the mistakes of other countries, both international and national experts have concluded.

Professionals from the field were speaking at an “International Conference on the Future of Solar Energy toward Grid Parity,” sponsored by solar firms Enerpoint Israel and Suntech in Herzlyia last Thursday.

By providing only small quotas for renewable energy installation, issuing unattractive and often unstable feed-in tariffs and creating obstacles with complicated bureaucracy, the relevant authorities show that they are not 100 percent devoted to making green energy blossom in Israel, experts told The Jerusalem Post on the sidelines of the conference.

“The government is playing a mixed game,” said Danny Denan, CEO of Enerpoint Israel. “In some ways they are acting like they really want it and in some ways they are acting like they don’t.”

Enerpoint is an Italian-based solar firm founded in 2001 by engineer Paolo Rocco Viscontini that has been installing photovoltaic modules all over Europe, and that expanded operations to Israel in 2011.

Denan criticized the government for importing polluting, expensive diesel generators to help handle this summer’s needs while only issuing an additional 30-megawatt solar quota with very low feed-in tariffs – the amount per kilowatt hour that the solar developer receives for his or her installation – in comparison to those of the previous set.

“If you are going to open up a small tariff at least open up a big quota,” Denan said.

Italy, for example, during its first year installing solar facilities, had an unlimited rooftop quota, and afterwards limited it to 80 megawatts per year, explained Daniela Schreiber, executive vice president for the US branch of Germany- based Hoehner Research & Consulting Group, a global consultancy firm in the field of smart energy.

Israel, on the other hand, provides only small quotas at a time, Schreiber said. “That’s why this is not real political will,” she added.

Eitan Parness, head of Israel’s Renewable Energy Association, agreed, telling the Post that the attitude is “part of a disease here we have not to plan too long ahead.”

“It’s deep rooted, the short-term planning in our governmental heritage of policy here,” Parness said.

“Hopefully the natural gas discoveries will be a good chance for Israel to plan ahead.

“When planning a national 20- year program for natural gas they will also have to find a place for renewables. You cannot just plan a natural gas market without renewables.

This might be a good chance to lay the foundations and present the case for growing portion of renewable to the Israeli market.”

A country that wants to develop a strong solar energy industry cannot simply set caps on its allocations all the time and amend the feed-in tariff every few months, according to Schreiber.

“They are too cautious and it needs more serious commitment, more detailed outline: what do we want to achieve by what source, and put a framework in place,” she said.

As of March 25, the feed-in tariff for that time period’s allocations was 90 agorot per kilowatt hour, Denan explained. For the new summer quotas, the feed-in tariff is 71 agorot per kilowatt hour if the developers connect to the grid by August 1 – a task that Denan said was virtually impossible – and 65 agorot per kilowatt hour if connected after. Medium fields currently receive about NIS 1.44 per kilowatt hour.

The cost of electricity, including VAT, is about 62 agorot per kilowatt hour, bringing the latest feed-in tariffs for small solar rooftops to something called incentive parity, the experts explained.

Countries developing renewable energy have three essential milestones that they should eventually reach – incentive parity: when the feed-in tariff is equal to the electricity price, grid parity: when the cost to produce one unit of electricity from the renewable source equals the electricity price, and generation parity: when the cost of producing one unit of electricity from the renewable source is equivalent to the cost of producing one unit of electricity from conventional sources, Schreiber explained.

Grid parity would be beneficial for a residential photovoltaic producer who is using the solar energy he produces directly for his own use, without feeding it into the grid, Schreiber explained. However, this is still not a possibility in many countries, including in Israel. Utility sites, on the other hand, are aiming for generation parity; before they agree to make widespread use of renewable energy, it must be a competitive resource, Schreiber said.

In the case of the summer small rooftop quotas, however, the experts agreed that achieving incentive parity would not at the moment provide an attractive deal to potential solar entrepreneurs.

“We didn’t learn from mistakes other countries are making,” Denan said. “We’re not looking at what happened in the places where the markets failed and why did they fail. We’re falling into the exact same holes where other countries fell even though we have the knowledge.”

Governments need to make sure that they are providing sufficient financial incentives for small-scale solar systems, because while largescale developments can kick-start the market, they are not seen as sustainable and can “explode the costs,” according to Schreiber. In Spain, while the country provided significantly higher tariffs for small systems than for large, entrepreneurs were able to circumvent the rules by grouping many small systems together – to essentially create large, 8-megawatt sized installations and still get small-scale prices, she explained. This, she said, was disastrous to the Spanish economy, as the feed-in tariff was not in line with production costs whatsoever, and essentially caused the industry to shut down.

“The smaller system is seen as more sustainable,” Schreiber said.

Small, distributed systems with eventual nighttime storage features will be the most effective overall, according to Schreiber. The tariffs, she argued, must be lower for largescale fields.

“If you put the same incentive for both then from economical point of view you would always go for large scale,” she said.

The Czech Republic also faced a major failure because it opened up a nearly unlimited quota of 1 gigawatt for a very short time period of one year, according to Denan.

One country that Israel should certainly strive to mimic in its solar industry is Germany, which has a “very mature market” that focuses on the long-term and whose tariffs only change about twice a year, Denan explained.

Germany is expected to reach about 6 gigawatts worth of installed solar energy this year, depending on open space available, Schreiber added.

Meanwhile, in Italy, in the town of Narbolia in the Oristano province of Sardinia, 26 megawatts are being installed, while a new “solar town” called L’Aquila has 6 megawatts worth of rooftop panels on people’s homes alone, Viscontini, the Enerpoint engineer, said.

Israel needs to follow the experiences of other countries, and bring in people from abroad to educate people as to how to install solar modules properly and how to build up an infrastructure, Schreiber explained.

“We have a lot of light and we can be an island that is completely autonomous,” Denan added.