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European utility companies partnering with solar panel companies to boost market share

Solar panel

Helion Solar, a division of Alpiq has linked up with Ikea to install solar panels sold by the Swedish furniture giant. Alamy photo.

Solar panel installation costs fall, profits seen without subsidies

By Geert De Clercq

PARIS, Aug 23 (Reuters) – Engie’s Belgian unit Electrabel and Switzerland’s Alpiq have sealed rooftop solar panel installation partnerships in a bid to boost their share of the solar retail market and boost revenue from energy services.

The French utility said on Tuesday it had launched a partnership with US solar installer Sungevity to install rooftop solar panels in Belgium.

Alpiq said its Helion Solar unit, Swiss market leader in rooftop solar with a 10 percent market share, had linked up with Ikea to install photovoltaic systems sold by the Swedish furniture chain. Neither of the companies gave installation or financial targets.

Both utilities said the partnerships are part of a strategy shift towards renewable energy and energy services. With traditional power generation from fossil fuels threatened by renewableenergy, Europe’s struggling utilities are turning to services to shore up falling revenues.

“The utilities have a strong customer base, the solar companies have the technical competencies, we expect this type of combinations will develop,” said Alexandre Roesch, head of Brussels-based industry lobby SolarPower Europe.

Both Engie and Alpiq have tried to catch up in solar with recent acquisitions. Alpiq bought Helion in Feb. 2015, Engie bought Solairedirect in July 2015, making it French market leader and giving a portfolio of international contracts.

Engie Electrabel said Sungevity – the fifth-largest U.S. rooftop solar company by market share – will install the new solar panels.

Engie said in Belgium’s southern Wallonia region its solar panels could cut power bills by up to 1,200 euros per year and earn a return on investment (ROI) of up to 17 percent.

In the northern Flemish region, where rooftop solar owners pay a 300 euro per year grid fee and get no subsidies, customers could cut bills by 500 euros and earn and ROI of up to 11 percent.

The European solar market has been hit by deep subsidy cuts and defaults among smaller rooftop installers that left customers without service. Operator fraud has also dampened demand.

The number of new installations in the Belgian solar market fell to less than 10,000 in 2014 from more than 100,000 in 2011 as the country – like many others – cut back overly generous subsidies.

But the cost of rooftop installations has fallen to about 6,000 euros from 20,000 euros in 2008, making them profitable even without subsidies, Engie Electrabel said.

Engie said it had set up a network of local specialists to service existing solar installations, as many small solar installers have gone bankrupt or stopped their activities.

Newly installed solar photovoltaic capacity fell from more than 20 gigawatt in 2011 to just 8.2 GW last year, SolarPower Europe data show. Solar last year accounted for 4 percent of electricity demand in the European Union last year.

(Reporting by Geert De Clercq; editing by Susan Thomas)

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