Deploying collective PV selfconsumption in France : System design, barriers, and policy recommendations

Abstract: A collective self-consumption project defines a community made of different electricity consumers that gather around a decentralized distributed energy generation system in order to supply part of their electric demands through self-consumption of the decentralized electricity produced. Solar photovoltaic (PV) technology is the most used decentralized energy generation system. Thanks to the falling price of renewable energy technologies due to the development of research, and political regulations towards the sustainable development goals, new ways of producing energy have emerged and collective self-consumption projects are part of them. France stands as one of the few Europeans countries having specific regulatory framework for such projects. However, strong barriers prevent from their deployment. These are mainly: a low retail electricity price, high taxes and network tariffs, and a regulation with heavy administrative processes. Besides, the majority of the studies made on collective self-consumption projects are mostly on blockchain technology for the local energy market created by them. The few techno-economic analyses on collective self-consumption are essentially commercial and not research oriented. Therefore, the aim of this study is first, to analyze typical system designs for a collective self-consumption project and set an example of a reference PV system for such project. The objective is also to find most critical barriers for a collective selfconsumption project through an analysis of their impact on the project’s economics. Finally, the aim is to investigate possible policies that could be set by the French Government, regarding its budget, in order to develop PV collective self-consumption projects in the future. A community made of diverse electricity consumers and located in Montpellier, was defined for the purpose of this study. Each consumer’s annual electric load was directly collected from the national open data platform and the sum constituted an input for the system design and modeling in SAM (System Advisor Model), the software used. Techno-economic optimizations were performed both in SAM and a specific built-in economic tool to find an optimal PV system based on the key performance indicators (KPIs) defined. Two main business models were looked at: prosumer and third-party business models. The former corresponds to the case where the PV system is owned by the community itself. The latter is associated to a situation where a third-party which can be a developer, or a utility owns the PV asset and sells the electricity to the community. The impact of barriers to collective self-consumption on the project’s economics are analyzed through the different business models. Critical barriers are found and an analysis on possible policies favoring State initiatives for collective self-consumption is held. This study defines a collective self-consumption project with a techno-economic optimized system design based on fixed key performance indicators (KPIs). The most important KPI is the solar fraction (SF) corresponding to the ratio of the local energy self-consumed by the community over its load. A PV system of 35 kWp with a SF of 34% was found for the city of Montpellier. This study also confirms the fact that collective self-consumption projects are not profitable in France. The CSPE is mainly the tax component that prevent such projects from being profitable regardless of the business model. Besides, the VAT on local electricity consumption weakens the project’s profitability in the prosumer business model. In terms of budget, removing the CSPE costs less to the State (with 19 027 €) than subsidizing direct PV investment cost at 638 €/kW (with 22 330 €) for a project having a third-party business model within the found PV system. For a project having a prosumer business model, a subsidy of 511 €/kW on the direct PV investment cost is preferable for the State (with 17 885 €) than removing both the CSPE and the VAT on local electricity consumption which causes a shortfall of 29 732 €. In conclusion, a collective self-consumption project is not economically profitable in France within the current legislation. To allow the deployment of such projects, the French state should allocate a minimum subsidy of 40% in the direct PV investment (511 €/kW for a PV system of 35 kWp) for projects with a prosumer business model. For the ones with a third-party business model, the CSPE should be removed.