EB: The sun hasn’t shone as brightly on the solar industry in recent years. Why is that?
David Hogg: The solar industry has been a victim of its own success to a certain extent. Many governments in Europe have been supportive of solar energy and specifically photovoltaic. They provided government support to stimulate demand. The problem has been that the industry has consistently outperformed. The subsidies they set were based on the assumption of higher prices. But as the industry’s success drives that price down, so the perceived burden on the public purse is greater than anticipated. Subsidies have been cut drastically and the focus of stimuli has shifted. We have seen that reaction in Spain and obviously Germany, and most recently in the UK and in Italy.
EB: Where does the solar market go from here?
David Hogg: The Holy Grail for the solar industry was always said to have been reached when the production costs for solar electricity are the same as the costs for producing any other electricity. That has already happened in large parts of the world. That was the objective of the government support schemes. The German support system was well thought through and quite innovative. Only the Japanese model was better. What we now need to do is regulate the market.
EB: In what way?
David Hogg: Utility companies are competing for the bigger customers on price. The bigger the user, the lower the price they pay. That is the totally wrong approach. If they need more energy they should pay more. We are all going to compete for volume, we are all going to compete on price. S.A.G. Solar is in a good position to compete in the market. If you want solar energy, you can just take it.
EB: What is S.A.G. Solar’s role in the solar market?
David Hogg: S.A.G. Solar was one of the absolute pioneers of the solar industry in Germany, which makes it one of the pioneers pretty much in the world. This history has given it a huge headstart. We have constructed over 9,000 photovoltaic systems, which is a huge number. We have also maintained a significant number of those over a very long period and have arranged the project financing for many of them. This is experience that can only be built up over time.
EB: What advantages can S.A.G. Solar offer customers in the solar market as it is now structured?
David Hogg: The industry in Germany and across Europe has moved from big solar plants on greenfield sites to rooftop installations. To be successful in the rooftop business you have to provide complete end to end solutions to the customers which enable them to take advantage of the benefits of cost savings through PV whilst focusing their attention on their core business. With roofINVEST, we have a reliable product and can assure our customers that there will be no nasty surprises or additional costs further down the line that will reduce their ROI. Financing is a key stumbling block in the renewables sector as the cost over time is replaced with upfront costs. We offer guaranteed performance together with a fixed price and full service.
EB: The feed-in tariff has been slashed. How do you make solar energy profitable?
David Hogg: Plant owners now receive less for the energy they produce than they pay for electricity from the grid. To maximize the benefit we need to focus on self-consumption models, which is why the focus has gone from large power plants to micro-generation. Large companies can still profit from solar but only if they use the generated energy themselves. That is why we focus on commercial customers with high energy demands with our new roofINVEST product. It combines planning and installation of the plant with its maintenance over the long term. This is the way to revive the German solar industry.