France’s 2021-23 PV auctions show price increase despite lower panel costs

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From pv magazine France

The French government launched a seven-round tender scheme in July 2021 to allocate around 28 GW of renewable energy capacity by the end of 2026.

The CRE, France's energy regulator, has released a report analyzing the results of tenders held between 2021 and 2023. By the end of 2023, the CRE reviewed 14 GW of tenders and allocated 10 GW, with 40% designated for onshore wind and 60% for ground-mounted (4,266 MW) and large rooftop (1,290 MW) PV systems.

The CRE noted that the tenders began amid an energy crisis, leading to high inflation and a 10% abandonment rate for selected projects. However, the situation has improved since early 2023 due to updated tender specifications and more stable costs.

Compared to the previous CRE4 tender series, which saw declining prices, this new series experienced rising final prices, reflecting increased project costs. Ground-mounted PV projects saw a 39% increase in average final prices, from €0.0588 ($0.065)/kWh to €0.0891/kWh, with costs rising from €0.048/kW installed to €0.077/kW installed. These prices now exceed recent forward electricity prices of €0.060/kWh to €0.075/kWh.

Large-scale rooftop PV projects saw a 23% increase in final prices, from €0.0831/kWh to €0.1021/kWh. The CRE attributed these price increases to raw material and logistics tensions, inflation, and rising interest rates. Capex rose by 9% for ground-mounted PV installations and 2% for rooftop installations between 2021 and 2023. In 2023, average costs were around €935/kW for ground-mounted parks and €1,250/kW for rooftop projects. Ground-mounted plants primarily incur costs from module purchases (25.5%), while rooftop systems spend most on mounting structures (31.5%) and modules (22.1%).

The CRE also said that the expected drop in module prices has not materialized in recent tenders, unlike in other countries such as Germany. The report suggests that rising average interest rates, which more than doubled from 2021 to 2023, may be a factor.

Opex increased by 29% for ground-mounted PV installations and over 6% for large rooftop systems, ranging between €20/kW/year and €25/kW/year.

Most selected project developers plan to use PV modules from Chinese manufacturers (over 80% for ground-mounted and more than 85% for rooftop systems). European manufacturers account for less than 5% for ground-mounted and less than 10% for rooftop installations. Among the selected module manufacturers, Chinese firms Jinko, JA Solar, and DMEGC dominate the ground-mounted segment, while Jinko, DMEGC, and JA Solar also lead in rooftop installations, alongside three French manufacturers: Reden, Voltec Solar, and Photowatt.

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