Poland became Europe’s third largest solar energy market in 2022, boosted by the rapid proliferation of solar micro-installations below 50 kW, but this year is already starting to look different. Marcin Ślęzak, commercial director of Warsaw-based Menlo Electric, spoke recently pv magazine about changes in demand and technological preferences in this booming market.
It’s different. Last year, around 80% of new solar installations came from the residential construction market segment. This year, its growth is limited by two factors. The first is the transition from net metering to net billing announced last spring, and the second is the government’s decision to freeze electricity prices for consumers who remain at certain electricity consumption levels. The government has set three energy consumption levels of 2000 kWh, 2600 kWh and 3000 kWh/year, the last of which is reserved for large families, farmers and the elderly. Those who do not exceed these limits will remain at last year’s energy prices, and the rest will pay the new prices, which are 20-22 percent higher. It is not expected that many households will be able to stay within these limits, but the mere knowledge of the frozen prices has cooled demand.
At the same time, we are seeing increasing demand on the commercial and industrial (C&I) side due to two factors: electricity prices are not frozen for them, so they are exposed to fairly high market prices, and companies are also under pressure. to reduce carbon dioxide emissions under initiatives such as RE100. In short, I hope that the market will maintain last year’s volumes, but the growth will be driven by the C&I sector rather than residential construction. For example, Quanta, Poland’s leading provider of solar solutions for business use, currently has more than 100 MW of pure C&I PV projects in the pipeline.
You mentioned the transition from net metering to net billing, which initially had a strong negative impact on the market – some companies even announced bankruptcies. Has the market adjusted to this change?
Before the change, people were buying in a panic. If you look at our housing sales in Poland, 80% of them happened in January-March. In April, the market simply disappeared. In May, the activity slowly started to pick up. But by now people have already understood how net billing works, so this no longer stops them from installing solar as it did in the first place. In the case of Menlo, Poland represents 30% of our turnover, so we didn’t feel the pinch because we had strong demand from Germany, the Baltic countries and southern Europe at the time.
Solar was the main winner in the most recent renewable energy auctions, but overall uptake was disappointing as large, unsubsidized solar projects have begun to gain market share. What can we expect from the Polish electricity-scale PV market?
This is very difficult to say. When local legislation is ignored, there are two factors to consider. The significant decline in solar module prices caused by falling polysilicon prices has created strong expectations of downward price trends, so investors are reluctant to buy now and expect further price declines. At the same time, there is a large gap in the supply of large inverters. So market leaders such as Sungrow and Huawei still have order backlogs from last year, and they will be filled in September or October of this year at the earliest. These two factors extend the planning phase by another six to nine months and slow down the development of electricity scale in Poland.
As Poland’s leading distributor, what does Menlo Electric see about the technical preferences of project developers?
Customers need new technologies that can ensure greater efficiency and profit. For example, for solar modules, about 95% of our JinkoSolar offerings are their n-type TOPCon products. The latest TOPCon products represent higher efficiency (up to 23%), longevity (30 years) and low degradation (only 0.4%/year). Especially important in markets like Poland, the UK and Scandinavia, which are shadier than the rest of Europe, is the better low light response that such modules are capable of, adding two hours of production per day.
Meanwhile, the large 350 kW inverters have attracted a lot of attention, but they have not been widely available, so there is not much to say about their advantages. This year, FoxESS, Sungrow and SolarEdge have successfully launched hybrid inverters and storage solutions, which already represent 60-70% of our inverter sales. We have a full range of FoxESS and Sungrow hybrid solutions and can deliver anywhere in Europe within five working days. However, Polish households are still reluctant to install batteries and are likely to expect substantial government subsidies. But we see C&I and utility projects designing batteries and already installing hybrid inverters. We also expect the demand for microinverters to accelerate in Poland, and we are ready to respond to that with TSUN products.
Menlo Electric launched the Energy to Power Your Future charity program last year to provide free solar installations to institutions caring for children in Ukraine. What will happen to this project?
We signed a contract for 10 installations, with a total power of 300 kW. We are about to start the first installation at a children’s hospital in Chernigov, Northern Ukraine. We have already secured the components for two other installations thanks to the support of our partners Deye and FoxESS. In the past, we delivered installations free of charge to Poland, Romania and soon to Bulgaria. With our business partners such as JinkoSolar and Sungrow, we are all very interested in partnering in such charitable projects and ready to help.