Anya Kussé
As a leading player in the energy market, we unburden companies in their energy policy and develop future-proof energy strategies. Our team of experts negotiates, manages and optimizes our customers' energy contracts in a continuous and transparent manner. Supported by AI-driven software, we provide insight into the current and future cost of each MWh. We integrate sustainability into our overall approach and work pragmatically and solution-oriented to support you in the energy transition. Together, we create the most ideal energy landscape for your business.
Companies have invested massively in solar panels in recent years. But if you don't consume the generated power all by yourself, it could just cost you money. Because with twice the negative electricity prices than in 2022, you may have to pay extra for the electricity not consumed by your solar installation. "Solar panels remain a wise investment, but companies are best taking steps to smooth out the costs," says our CEO, Chris Elbers.
Over the past few weeks, the price of electricity has increasingly dipped below zero. This is the case when the supply of electricity exceeds demand. If you inject surplus power into the grid at those times, you don't get compensated for it, but have to pay extra for the unconsumed MWh's your solar panels produce.
Negative energy prices are not a new phenomenon. They have occurred in past years as well, but with five months to go, 2024 already counted more hours with negative prices than last year and more than twice as many as in 2022.
What is the cause of this?
The main reason, of course, is the growing supply of green electricity. The number of PV installations in both businesses and individuals increased tremendously in recent years. Interest was already high and the energy crisis of 2022 put another turbo on the growth of the number of solar panel installations. Wind energy, the high nuclear capacity in our country and other forms of electricity production also contribute to lower prices, but also to a supply of electricity that increasingly exceeds demand.
On top of that, energy suppliers are charging more for PV installations. One example is imbalance charges. Energy suppliers used to know approximately when and how much power companies would draw from the grid, solar panels make that much harder to estimate. So suppliers are stuck with imbalance costs. For years they handled this flexibly, in a period of lower prices the costs for companies suddenly go up and the flexibility is gone.
Beware of additional costs of excess power?
Companies that installed solar panels en masse in the midst of an energy crisis, hoping to take advantage of exceptionally high energy prices, are losing out. They are earning far less from the surplus power they inject into the grid and, in fact, are increasingly shelling out money.
But that certainly does not apply to all companies, Odot CEO Chris Elbers emphasizes: "Everything depends on the ratio between your own production and your auto-consumption. If you consume most of the power generated by your PV systems yourself, then you should put little or no power on the grid. Then you take full advantage of the 'free' green energy from your solar panels and don't feel the negative electricity prices."
Businesses that do need to put surplus power on the grid on a regular basis can take a number of measures to reduce costs.
⚡ Batteries can store excess power, but these are a hefty investment that not every company can recoup. Our advice is definitely to have a thorough study done before making such an investment.
⚡ In addition, you can share surplus power with other branches of your company or even with other companies. With energy sharing, though, you have to consider a few snags: it's only possible within Flanders, you need digital meters that measure consumption at the quarter-hour level, and some suppliers make energy sharing so expensive that it's no longer profitable.
⚡ Companies should take a closer look at their energy contracts. Energy contracts have evolved significantly in recent years due to the energy transition and new technological innovations. It often pays to renegotiate current contracts. Negative prices on an hourly basis arise because at specific times throughout the day, the supply of power exceeds demand. But if we look not at those peaks, but at the average prices per day, we see that they do remain positive.
Solar panels remain a smart investment.
Just because we see negative power prices more often today does not mean they will dip below zero for a good number of hours in the coming years. Total energy production from renewable sources, including solar panels, will only increase. On the other hand, production from other sources (such as nuclear power) will then decrease. Regulations will also play a role.
Conclusion.
"Solar panels will definitely remain a smart investment in the future, both ecologically and financially," emphasizes Chris Elbers. "Only it is more important than ever to match your PV installation as closely as possible to your consumption profile. Make a good analysis of how much power you need at what times. Include future investments in that, such as installing charging points for electric cars. If it is unavoidable to inject surplus power into the grid anyway, investigate whether batteries or energy shares are cost-effective, and check very carefully the fine print on your energy contracts."