Decarbonization of businesses: the boom in self-consumption

As revealed in the 5th edition of the International Observatory of Energy Transitions by De Gaulle Fleurance Avocats Notaires, the phenomenon is global and is often favored by regulations encouraging the development of renewable energies and self-consumption. Overview of this market trend in Germany, Brazil, Colombia, France, Greece, India, the United Kingdom, Togo and Turkey, with the Observatory's contributors: Aquereburu & Partners, AZB & Partners, Becker Büttner Held, Bpifrance, Brigard Urrutia, KiloWattsol, KMU Law Office, Rokas, SerenySun, Shakespeare Martineau and Siqueira Castro.

Key figures

• +85%. This is the growth of solar in Germany in 2023.
• 684.000 new self-consumption systems installed in Brazil for a total of 8,3 GW in 2023.
• 5.729 small self-consumers (<1MW) installed in Colombia in 2023.
• 200.000 new self-consumption projects in France in 2023 alone (+77% vs. 2022).
• 421 MW. This is what the self-consumption of households, businesses, municipalities and energy communities represents in Greece in 2023 (i.e. + 100% compared to 2022).
• 9.711 new companies in India have set up their own power plant to meet their needs in 2022 alone.
• 92.946 self-consumption installations in March 2023 in the United Kingdom (an almost tripling in the space of one year).
• 75%. This is the share of renewable energies targeted by Togo by 2030.
• 6.548 MW of installed power for individual self-consumption in Turkey at the end of 2020, just 1 year after the regulations for this system came into force.

Self-consumption can be individual or collective. Individual, it designates an entity (individual or company) which installs a power plant (mostly photovoltaic) on its property and directly consumes the energy thus produced. Collective, it brings together several players in the same territory who directly consume the electricity (mostly solar) that they produce themselves.

The growth of this practice is linked in particular to the cost of solar energy which, from 2027, should be the cheapest in almost all countries in the world. Result: its share in global energy should reach 60% by 2060 (versus 5% today).

For Xavier Daval, CEO of KiloWattsol: “The current energy crisis has acted like an electric shock on individuals and businesses alike. And solar energy, like self-consumption, has gone from an attractive concept to an imperative reality to protect against the explosion of market prices. »

The trend is observed in France which, with the reform of the ARENH, should, according to Xavier Daval, see the price of traditional electricity stabilize at 70 euros per MWh in 2026 (vs. 42 euros yesterday). Faced with this development, the industry estimates that it will be necessary to equip 4 million homes with photovoltaic power plants by 2035.

Another determining factor: the development of CSR regulations, one of the objectives of which is to reduce greenhouse gas emissions in order to achieve carbon neutrality by 2050, in accordance with the Paris Agreements. From this perspective, companies are encouraged to decarbonize their activities. Either via incentive measures: advantageous tax regime, bonus, possibility of reselling surplus unconsumed electricity at a guaranteed rate… Or via new obligations: France is gradually imposing taxes on owners of buildings or car parks of more than 500 m2 to install photovoltaic panels on part of their surface.

For Julien Lupion, head of the structured financing department at Bpifrance: “More and more, owners and operators of buildings or industrial buildings/tertiary areas will choose the self-consumption solution to meet regulatory obligations. We are already seeing real enthusiasm for these projects. »

Germany - Yola Traum, lawyer at Becker Büttner Held

Germany was a pioneer in the development of self-consumption which it has long encouraged. In spring 2024, the regulations governing collective self-consumption were relaxed, with the adoption of the legislative package for solar energy (Solarpaket I). Until now strictly reserved for use between owners and their tenants, the system has been extended to commercial buildings and ancillary installations such as garages.

Brazil - Humberto Negrão, partner at SiqueiraCastro

Brazil has two main self-consumption systems. The first concerns projects below 1 MW for which renewable electricity producers must still go through a distribution company to consume electricity but at a reduced rate. According to a system similar to the "Value of Solar" method frequently used in the United States, these self-consumers will also soon be able to benefit from a bonus taking into account the positive externalities of their installation. The 5nd self-consumption system concerns players with a monthly consumption greater than 2 kW and who use the energy produced by the power plant of an independent electricity producer that they own. The latter benefit from certain reductions in sectoral fees which they lose when they want to resell their surplus electricity.

Colombia - Claudia Navarro Acevedo, partner at Brigard Urrutia

The Colombian government encourages projects aimed at promoting self-consumption of electricity, through tax advantages, the possibility of selling excess energy and public financing. Projects based on renewable energies receive more support. Only individual self-consumption exists today. But regulations on collective self-consumption, in the form of an energy community, should see the light of day in 2024.

France – Sylvie Perrin, Frédéric Paquet, partners, Claire Haas, Alexandra Nowak, lawyers, Béatrice Boisnier, lawyer, at De Gaulle Fleurance

In France, even if various measures have been put in place to facilitate the development of self-consumption and solar energy, obstacles persist. In particular, collective self-consumption does not benefit from the same tax advantages as individual self-consumption. And these projects may have more difficulty finding financing. “For years, banks have financed projects with purchase obligations over 20 years, at a guaranteed rate,” explains Donald François, Founder of SerenySun. “Today, they must understand this new model that constitutes collective self-consumption projects. This involves seeking out self-consumers who will be able to enter and exit the project whenever they wish, with a price that is not fixed over 20 years but obeys the law of supply and demand. »

Greece - Mira Todorovic Symeonides, partner and Panagiota Maragkozoglou, lawyer at Rokas

In Greece, aid for self-consumption is generous. With a budget of 238 million euros, subsidies for installation (up to 10,8 kW) amount to 65% for households and 40% for farmers, while subsidies for batteries storage (up to 50 kWh) range from 90% to 100%. With another budget of 30 million euros, farmers receive a subsidy of 30% of the cost of the installation (up to 50 kWh). Furthermore, small and medium-sized businesses or self-employed workers who equip themselves are authorized to deduct double the cost of their investment from their gross income.

India – Bahram N. Vakil – co-founder and senior partner, Anuja Tiwari – senior partner, Siddhanth Mitra – lawyer at AZB & Partners

In India, self-consumption has also developed greatly with a wide variety of energy sources (hydro, steam, diesel, gas, wind, solar, etc.). Energy-intensive industries such as aluminum, cement, chemicals, etc. have set up their own power plants, either to supplement electricity purchased from utilities or for emergency use to protect against the unreliability of the local power grid, for example in the event of a restriction, power outage or breakdown. The 2003 Act and the regulations made have facilitated the adoption of self-consumption from renewable energy sources in India.

United Kingdom – Isaac Murdy, lawyer, Sushma Maharaj, consultant, Peter Mayhew, lawyer, Daniel Clarke, legal director, at Shakespeare Martineau

In the United Kingdom, the adoption in 2020 of the Smart Export Guarantee Scheme, which allows self-consumers to resell the electricity they do not consume, has largely contributed to developing the self-consumption market, the number of projects of which, in 2023, has been multiplied by almost 3 in the space of a year. Beyond this regulatory development, technological innovation has played an important role, with the emergence of peer-to-peer energy exchange platforms, relying on artificial intelligence (AI) and blockchain. In 2018, in Hackney, residents were able to automatically exchange the solar energy produced on their territory with each other. Smart meters with AI predict consumption demand, while blockchain allows exchanges to be programmed and compensated.

Togo – Moamar Tidjani, lawyer at Aquereburu & Partners

Togo is aiming for an electrification rate of 100% by 2030, with a 75% share of renewable energies. Since 2018, any natural or legal person can produce electricity from renewable energy sources for their own consumption and has the right to resell the surplus.

Türkiye – Mert Mustecaplioglu, partner; Özge Kaplan, lawyer; and Zeynep Nisa Aydın, intern, at KMU Law Office

Since 2019, individual self-consumption has been regulated by regulations and designates unlicensed renewable electricity production installations. Self-consumers have the right to sell excess electricity to the public operator, with guaranteed rates. If they use 55% Turkish components in their installations, they benefit from additional aid. Beyond 5 MW, the installation must be approved by the Turkish energy market regulatory authority.

Decarbonization of businesses: the boom in self-consumption - De Gaulle Fleurance

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