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Approximately 100 million households rely on rooftop solar PV by 2030

Part of Technology and innovation pathways for zero-carbon-ready buildings by 2030

About this report

This analysis is part of a series from our new report, Technology and innovation pathways for zero-carbon-ready buildings by 2030, and provides the strategic vision of experts from the IEA Technology Collaboration Programmes (TCPs) on how to help achieve some of the most impactful short-term milestones for the buildings sector outlined in the IEA’s Net Zero by 2050 Roadmap; each report’s title reflects one of these milestones. Learn more about the report and explore the TCPs.

Highlights

The number of households relying on solar PV grows from 25 million today to more than 100 million by 2030 in the Net Zero Emissions by 2050 Scenario (NZE Scenario). At least 190 GW will be installed from 2022 each year and this number will continue to rise due to increased competitiveness of PV and the growing appetite for clean energy sources.

Of the 1 TW installed, roughly 40% represents distributed PV installations out of which more than one-third are in the residential sector. Around 130 GW of PV systems are deployed by households, which account for approximately 25 million units.

This number should be increased fourfold and around the year 2030 the total number of units will reach 100 million. This could be achieved by maintaining today’s yearly installations rate.

As households increasingly shift to electricity for heating and cooling (mainly due to heat pump deployment) and electric mobility, the need for local embedded electricity production will increase

Relevance

Already today, solar PV significantly contributes to reducing carbon emissions globally. The latest Trends in Photovoltaics Applications report from the IEA Photovoltaic Power Systems Programme (PVPS) showed that installed PV capacity at the end of 2020 saved more than 860 million tons of CO2 and it is estimated that the gigatonne (Gt) threshold was reached in 2021.

Next to utility-scale installations, distributed applications on buildings are contributing significantly to PV use of around 40% globally. With different competitiveness conditions, rooftop-based applications are easing the burden on the distribution grids, allowing companies and households to lower their electricity bills and contribute to reducing carbon emissions. This can be eased further by the integration of on-site energy storage systems.

To fully decarbonise the electricity sector, solar PV will have to be installed everywhere possible, starting with buildings. Households are essential in this development, with levels of competitiveness that mostly depend on electricity prices and taxes. The competitiveness of utility-scale installations depends on wholesale electricity prices, which in general are significantly lower.

Hence, developing new PV on building rooftops, especially for households, will contribute decisively to decarbonise the electricity sector thanks to smart self-consumption policies, new business models for cross-cutting applications like electric mobility, solar-based heating and cooling (through heat pumps, direct heating or PVT collectors), and emerging applications. 

Current state

Rooftop applications with solar PV are already mainstream and quickly expanding thanks to innovative business models (such as net billing mixing self-consumption and surplus feed in tariff for prosumers). PV on roofs for households have been developed from the early days of the PV market boom in several countries such as Germany and Italy, while others such as Belgium, the Netherlands and Japan also now have deep market concentration.

The cost of equipment and installation has dropped more than 80% in the last decade and currently rooftop PV systems for households can be installed for around USD 1 per watt, which is a very competitive price.

New business models are developing to complement the buying of a PV system by offering renting or leasing options that provide additional maintenance services and, in some cases, coupled with electricity bills.

In addition, new policy frameworks allow for authorising the sale of PV electricity to third parties or neighbours, as well as compensating production and consumption between different locations.

Evolution of annual solar PV installations and share by segmentation, 2000-2021

Openexpand

Challenges

Upfront costs remain a significant obstacle to lower- and middle-income households, and new business models have not yet adapted to these potential consumers. Financing also remains an issue in developing countries due to higher perceived risks.

Social policies are in place in some countries to provide PV systems for poverty alleviation (such as in China) but more remains to be done to provide financial incentives to low-income households to ensure faster development of PV installations.

In multi-family buildings, the split of production and billing among different tenants remains a complex issue, which is often solved on a case-by-case basis. The reluctance of some tenants is also thwarting adoption in multi-family buildings.

Self-consumption policies are often plagued by inadequate grid cost policies and sometimes the lack of understanding by grid operators, who are faced with rapid developments in distributed PV. This is especially obvious for delocalised self-consumption, which allows compensating production and consumption between different locations, and which requires a specific pricing of grid use and often modifications of laws between the sides to reach competitiveness.

Due to the variable character both for the solar PV production, as well as for the energy demand, flexibility options and on-site energy storage capacity are recommended.

In general, barriers are social, financial, psychological, and regulatory rather than technical. The technology has reached such a level of maturity that it can be deployed easily everywhere.

With higher penetration, interoperability needs to be improved and the involvement of grid operators and electricity retailers could be increased. The relatively low level of self-consumption for a PV system producing roughly the same amount of energy annually as the consumption of a household is expected to increase with electric mobility and heating by heat pumps, especially if the chargers and heat pumps are equipped with smart controls, taking the access to on-site produced electricity into account.

Innovation themes covered by the IEA TCPs
Policy recommendations

Strategies

Policy recommendations

Market creation and standards

 

Regulation for installation and end-of-life use

Regulations. Define regulations and standards to ensure quality installations and easy maintenance of PV, as well as end-of-life waste management.

Develop and deploy zero-carbon-ready building (ZCRB) codes by 2030

Building codes. Set clean fuels metrics as part of ZCRB codes to promote rooftop PV as well as BIPV.

Review regulation for self-consumption policies

Regulations. Frame ad hoc self-consumption policies to allow large-scale PV development.

Define regulations towards PV recycling

Regulations. Adopt regulations for end-of-life use cases of solar PV and their recycling.

Planning instruments

 

Integrate renewable targets as part of local and national planning

National and local energy planning. Assess the local potential of renewable energy, deploy plans to exploit such potential and make them publicly available. Engagement among multi-stakeholders to plan for renewable integration.

Economic and financial instruments

 

Subsidies

Grid tariffs. Deliver grid tariffs that favour PV system owners, without shifting the costs of transmission, distribution and balancing on socially vulnerable groups. Avoid retroactive changes of already granted subsidies or incentives.

Avoid taxation of electricity PV produced and define sustainable grid costs.

Subsidies. Promote schemes allowing PV deployment for the socially vulnerable part of the populations

Enable innovative business models

Joint contract. Provide joint contracts with electricity retailers to accelerate deployment and allow utilities to propose PV services.

Real-time auctions. Allow cross-selling of solar productions and real-time auctions or offers between solar producers and solar electricity buyers.

Targeted grid transportation costs. Provide access to the grid with a local transportation cost for PV owners.

Cooperation-based instruments

 

Develop open-source platforms and tools

National open-source information databases. Promote the development of data platforms to support the understanding of the potential for solar PV integration and its economics.

Public support to R&D

 

Support innovation for polycrystalline silicon panels

Allocate funding. Provide financial resources for the development of alternative solar PV to diversify its reliance.

Education and training

 

Awareness campaigns

Raise awareness. Implement campaigns that raise awareness of potential threats to supply chains for solar PV (as occurred in the scandal of polysilicon production in Xinjiang). Promote education of PV benefits.

Capacity building campaigns

Capacity building. Develop and enact capacity building campaigns focused on installation/management/end-of-use of household solar PV.

Information campaigns

Information campaigns. Create public educational campaigns to increase the acceptance of BIPV.

Analysis