An Incentive Scheme to Promote the Self-Consumption of Renewable Energy in France

An Incentive Scheme to Promote the Self-Consumption of Renewable Energy in France

By Climate Scorecard France Country Manager Stephanie Tapolsky

As seen in Figure 1, renewables make up only a minor portion of France’s total energy supply. Evaluating solar and wind generation specifically, there has been notable growth since 2010 after essentially no capacity beforehand. With respect to total renewable energy capacity in 2015, the majority (62.08%) of renewable capacity came from hydropower (Figure 2). Wind and solar comprised the next largest segments at 22.57% and 8.14% respectively. Projections have wind becoming the largest contributing renewable by 2030 at 43.89%, whereas solar experiences a smaller increase to 17.45%. With current targets to meet 32% of energy through renewables in 2030, scaling up renewables quickly is essential.

Figure 1: Total Energy Supply by Source, IEA 2019

Figure 2: Renewable Energy Electric Production by Sector, 2015 & 2030 ADEME

France is employing traditional practices to ramp up electricity production from renewables including: incentivizing private investment through their feed-in tariff, tax benefits, simplifying and shortening procedures for project deployment, providing government funding, delivering mandatory power purchase rates for self-generated renewable electricity, stimulating research and development to develop storage capacity, and more. As is the case with most of Europe, the feed-in tariff—which provides a premium for renewables over the wholesale electricity market price—has been essential to decrease the risk investors take on when investing in renewable infrastructure projects.

In 2018, France developed a new incentive scheme to advance the self-consumption of renewable energy. This refers to properties installing generation capacity (i.e. solar panels on roofs) so that they do not rely fully on the grid and large-scale generation for their electricity needs. With a budget of €200 million, it is intended to sustain the deployment of an additional 490 MW of generating capacity; projects between 100 kW and 500 kW of output will be able to participate. These are commercial size properties and include carports, greenhouses, buildings, and agricultural facilities. Importantly, it allows any surplus power (power generated but not consumed) to be sold back into the grid through net metering and will have the right to a “complément de rémunération” premium in addition to market price. In addition to increasing the share of renewables powering France through making them more financially favorable, it will hopefully stimulate competition within the self-suppliers space.

With the amount of yearly CO2/kWh of electricity saved and not consumed from the grid ranging from 400g-700g, an additional 490 MW of renewable power has the potential to save 202.83 to 354.94 tons of CO2 emissions per year. For comparison, France emitted 293.2 Mt (293,200,000 tons) of CO2 in 2019. With a target set in March 2020 to have a total of 200,000 PV generation sites for self-consumption in 2023, this scheme will likely contribute to ensuring the profitably, and therefore uptake, of commercial sized self-consumption installations. With almost 200 MW of self-consumption capacity installed in the first half of 2019 (double the amount recorded in 2018) an increase in the capacity of self-consumption installations is being observed. However, this number includes households and thus is not fully a result of the new scheme; it is likely this scheme helped drive a portion of the commercial sized capacity within this increase.

The ability to scale up this incentive scheme is significant. While originally funded with  €200 million on the national level, the total amount of funding can be increased. Additionally, investments could easily become more targeted on a regional or municipality level. This scheme could also work in other countries with a developed electricity grid and utility sector, as selling any excess generation back into the grid is an essential element. Securing funding is a barrier however in addition to the administrative workload of processing paperwork and funding the scheme.

In related news, a Paris court found France guilty of failing to tackle climate change by not meeting their greenhouse gas emission reductions targets as stipulated under law in February. The lawsuit, brought by four NGOs, argued that France is not setting sufficient policy to meet these targets and that the current reductions in greenhouse gas emissions are twice as slow as necessary under the law. Specifically, the court found France to be partly responsible for environmental and ecological damages that have resulted or will result from the lack of curbed emissions. An investigation is currently underway to determine the correct measures the government must undertake to repair caused damage and/or prevent additional damage. Hopefully this ruling will have a notable impact on France’s actions to decarbonize and meet their targets.


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