Photovoltaic self-consumption

The term "photovoltaic" is made up of the words "photo", which comes from the Greek word "phos", meaning "light"; and "voltaic", which originated in the field of electricity, as a tribute to the physicist Alessandro Volta, who invented the battery. Photovoltaic energy can therefore be defined as energy produced by light. Although the modern era of solar technology began in 1954, when Bell Laboratories accidentally discovered that silicon semiconductors doped with certain impurities were hypersensitive to light, solar panels were not mass produced until the 1990s. They are now an essential part of the rise in photovoltaic self-consumption, which is the most widespread type of electricity generation for self-consumption.

What is PV self-consumption

Photovoltaic self-consumption occurs when individuals or companies consume the energy produced by photovoltaic generation installations located close to the place in which that energy is consumed. In addition to solar panels themselves, photovoltaic self-consumption installations include other elements such as inverters, cables, connectors and, optionally, batteries. This type of consumption not only leads to lower electricity bills, but also contributes to reducing climate change since it uses renewable energy.

Types of photovoltaic self-consumption

Leaving aside installations that are not connected to the electrical grid — usually located in rural areas —, there are two types of photovoltaic self-consumption, depending on where the excess energy is sent; i.e. energy that is not used by the owner of the facility:

• Self-consumption without surpluses

These installations have an anti-waste system that prevents excess energy being exported to the grid. Batteries may be added, just as for self-consumption with surpluses, to store the excess energy and use it, for example at night or on cloudy days, especially now that the cost of lithium batteries is substantially lower.

• Self-consumption with surpluses

These installations allow surplus energy to be exported to the transmission and distribution grid. Users can sell the energy to the grid or benefit from so-called net balance — also called net metering —, where the energy exported to the grid is offset in the subsequent bill (or bills), depending on the country.

 SEE INFOGRAPHIC: The decrease in the price of lithium-ion batteries [PDF] External link, opens in new window.

Tips for PV self-consumption

These are some of the steps and recommendations that you should follow when installing your own photovoltaic facility, to start enjoying the benefits of self-consumption:

• Have a suitable space that gets as much sunlight as possible — roof, garden, terrace, etc. —.
• Make sure the photovoltaic panels are facing south (this is preferable although not essential) because the panels are more productive when the sun's rays fall on them perpendicularly.
• Contact a specialist company to deal with the necessary technical and administrative steps, as well as installation.
• Take advantage of the benefits offered by the authorities in different countries, such as tax relief (USA), reductions in property tax (Spain), and reductions in income tax (France).

Regulations and legislations on self-consumption

In recent years, governments all over the world have introduced measures to ease the red tape associated with self-consumption, and to offer financial incentives to users. The United Kingdom and Germany, for example, pay self-consumers per kWh that they export to the electrical grid. Italy and Chile reduce their clients' bills by an amount proportional to the kWh exported to the electrical grid, while Portugal and Australia allow net metering. This is the legal situation in other countries:

 Spain

The repeal of the so-called sun tax in 2018 and the new Royal Decree 244/2019 saw the start of a new era in photovoltaic self-consumption in Europe's sunniest country. The new Royal Decree included benefits such as encouraging collective self-consumption — multi-occupancy residential buildings, business parks, etc. —; simplifying bureaucracy; and the introduction of "simplified offsetting" for surpluses, a concept similar to net metering.

 Brazil

Since 2012, when Brazil regulated its Distributed Generation (DG) system, around 140,000 consumers (both individuals and companies) have been producing their own electricity, principally using photovoltaic panels. However, the possibility of applying a sun tax has recently divided the country, exposing a gap between the government, which is in favour of a zero tariff for self-consumers, and Brazil's National Agency for Electrical Energy — the regulatory body — which wants to remove the incentives.

 USA

At a national level, the USA has a Federal Solar Tax Credit, a government incentive that allows self-consumers to deduct 26 % of the cost of their photovoltaic facility. Until 2019, it was 30 %, and in 2022 it will disappear altogether. However, individual states can regulate self-consumption within their own borders, and, currently, over 40 states have put in place variations on net metering policies to regulate self-consumption.

 Mexico

Prior to the wide-reaching energy reforms introduced by the Mexican government in late 2013, Distributed Generation (DG) was only allowed in self-consumption, with no possibility of selling surpluses to the electrical grid. However, current regulations allow the sale of electrical energy via the DG scheme. In 2017, Mexico's Energy Regulatory Commission approved measures to boost these reforms, which included net metering compensation schemes, net billing and total sales.