Feature: Hanergy eyes solar market in Dutch agricultural businesses
by Liu Fang, Zindziwe Janse
ONSTWEDDE, The Netherlands, April 11 (Xinhua) — With 1,360 solar panels installed by R.P. Dijkman elektrotechniek on the roof of his chicken barns, Harry Migchels has turned his poultry farm in the north of the Netherlands into a demonstration project of renewable energy in the agricultural business. “My neighbours come to visit and ask questions. They are interested in how it is installed,” the 41-year-old farmer told Xinhua.
For Hanergy, the company providing the design and materials for the project, the success of Migchels’ “solar farm” paves the way for reaching its target to obtain three to five percent of all agricultural solar businesses in the Netherlands.
“This project is rather special for us,” said Li Ming, head of Hanergy Europe. “In other projects we work with florists, households and commercial roofs. In this case we installed the system directly at a poultry farm. Agriculture is one of the sectors that Hanergy has appointed as key for the Dutch market for 2016 and beyond.”
The thin-film solar power company has made rapid progress in the European market, signing several major deals during the past months. In the Netherlands, Hanergy has reached an agreement with football club AZ Alkmaar on a rooftop project for its stadium AFAS Stadion; and the company is working together with solar power service provider Rooftop Energy to install thin-film solar modules on the rooftop of Plantion, the largest market place for florists, commercial gardeners and retailers in the country.
Now Hanergy sees Dutch farmers as a big group of potential buyers of solar systems thanks to the subsidy by the Dutch government, called SDE+ (Encouraging Sustainable Energy Production), and “green financing” loans provided for the production of renewable energy.
Like all other solar energy producers in the Netherlands, Migchels produces his own electricity during the day and the electricity he produces but does not directly use goes up to the grid. At night, he still needs to get the electricity via the grid, and the eventual offset between his production and consumption leads to lower or even zero electricity costs.
The system cost Migchels 170,000 euro (193,700 U.S. dollars) and has a capacity of 160 kilowatts peak (kWp). Each kWp should generate 892 kWh per year for his module, which means that the farm can produce 140 mWh of electricity per year, according to figures given by the Hanergy team in charge of this project.
This amount of energy, after covering the need (80 mWh) of his farm and house, leaves Migchels a surplus of 70mWh per year, which he sells to the grid.
For such a big production, without the SDE+ subsidy, Migchels would not have made the investment.
As the cost price of renewable energy is higher than that of energy derived from fossil fuel, the subsidy compensates producers for the difference in cost price (unprofitable component) for a fixed number of years. With his subsidy granted in 2014, Migchels is now compensated 0.128 euro per kWh generated at his farms.
Through this subsidy, the farmer will see his solar investment paid back quicker, and also earn confidence from the bank. “Because the subsidy is granted for 15 years, banks know that it is a solid business case and they are more than willing to lend out the money. Solar means good return, that’s why banks are really interested,” said Fedor Swart, regional marketing manager of Hanergy in The Netherlands.
Migchels said without the subsidy, it is not very rewarding to make the investment.
Hanergy considers the return of investment (ROI) as the only obstacle that prevents Dutch farms from going solar. “Without subsidy, the ROI for solar based on current prices is for all business, and very much for agriculture, too long. With subsidy, the payback time will be within a six-to-eight-year period,” said Swart.
This year, the Dutch government will allocate around eight billion euros for SDE+. This specific kind of subsidy was first implemented in 2012, and is spread over wind, biomass, and solar projects. It is literally an auction system, and when a new application round opened last week, the website was jammed.
“Solar systems in farms have great potential. Among the total of 64,000 farms in the Netherlands, our target is to get a share of three to five percent, which is between 2,000 to 3,000 farms,” Li said.
The renewable energy giant is also thinking about a future scenario where subsidy is no longer given. “In the United Kingdom, the subsidies are cut but the people still want to use solar. So we need to find a battery solution which enables energy production during the day and release of energy in the evening. In the right time we will deliver this extra product in the Netherlands and in the future, if we can reduce the costs, it will become a standard product: solar energy plus battery,” said Li.