Thursday, January 3, 2013

A Strange Result on Costs?

I was wondering how much it would cost Germany to continue using FiTs until their 52 GW target? Here's a guess. I've arbitrarily used the magical 435 MW/month installation pace from the previous post and broken it up between the tiers like so.

Rooftops up to 10 kWRooftops 10 to 40 kWRooftops 40 to 1000 kWRooftops 1 to 10 MWGround < 10 MW
15%30%40%10%5%

In the first month (November 2012 in this case) 15% of the 435 MW (~65 MW) are installed in the < 10 kW rooftop category which gets a FiT of 17.9 cents/kWh. To calculate the incremental extra annual cost you subtract the Wholesale Cost of electricity (assumed to be 5 cents/kWh) from the FiT rate (17.9 - 5 = 12.9 cents/kWh), multiply this value by the total MW installed in that Bracket (65 MW) and then multiply that total by the expected production which is assumed to be 1000 MWh per MW. I've done this procedure (with some tweaking) for each bracket and summed the total below.

As you can see from the table, over time the incremental cost of each additional 435 MW is less and less because the FiT falls month by month. The sum total extra annual cost I came up with was just under a billion. Interestingly, if you project out the FiT degressions the extra cost of the FiT program go negative in November of 2017 - i.e. If you keep dropping the FiT you actually start saving money over wholesale in about 5 years.

I have mixed feelings here. On the one hand I know the FiT is probably a tad too generous and this means you can shave it down. On the other hand look at how low these extra costs are! Why screw with a good thing when it's cheap to let it ride?

**NOTE: Something about these results doesn't seem right. I suspect I may have dropped something in the math somewhere because this just seems too good to be true. I've double and triple checked things but I keep coming up with the same results. The graph says it all. Germany is in the Home Stretch.


YearRooftops up to 10 kWRooftops 10 to 40 kWRooftops 40 to 1000 kWRooftops 1 to 10 MWGround < 10 MWTotal
Nov-12 5,892,025 14,072,798 17,654,148 3,215,621 1,607,811 42,442,403
Dec-12 5,687,631 13,574,166 16,995,294 3,080,856 1,540,428 40,878,374
Jan-13 5,488,346 13,087,999 16,352,912 2,949,459 1,474,730 39,353,446
Feb-13 5,294,044 12,613,987 15,726,589 2,821,348 1,410,674 37,866,641
Mar-13 5,104,599 12,151,824 15,115,924 2,696,439 1,348,220 36,417,006
Apr-13 4,919,890 11,701,216 14,520,526 2,574,653 1,287,327 35,003,612
May-13 4,761,410 11,314,595 14,009,674 2,470,161 1,235,080 33,790,920
Jun-13 4,606,417 10,936,478 13,510,062 2,367,967 1,183,984 32,604,908
Jul-13 4,454,833 10,566,681 13,021,440 2,268,022 1,134,011 31,444,987
Aug-13 4,306,584 10,205,019 12,543,569 2,170,275 1,085,138 30,310,585
Sep-13 4,161,597 9,851,314 12,076,210 2,074,679 1,037,340 29,201,140
Oct-13 4,019,799 9,505,390 11,619,133 1,981,186 990,593 28,116,102
Nov-13 3,906,335 9,228,588 11,253,389 1,906,375 953,188 27,247,875
Dec-13 3,794,914 8,956,768 10,894,228 1,832,910 916,455 26,395,275
Jan-14 3,685,498 8,689,841 10,541,532 1,760,768 880,384 25,558,023
Feb-14 3,578,052 8,427,719 10,195,184 1,689,924 844,962 24,735,841
Mar-14 3,472,539 8,170,315 9,855,071 1,620,355 810,178 23,928,458
Apr-14 3,368,926 7,917,544 9,521,080 1,552,039 776,020 23,135,609
May-14 3,267,178 7,669,324 9,193,100 1,484,952 742,476 22,357,030
Jun-14 3,167,261 7,425,571 8,871,025 1,419,073 709,537 21,592,466
Jul-14 3,069,143 7,186,206 8,554,746 1,354,380 677,190 20,841,664
Aug-14 2,972,791 6,951,149 8,244,161 1,290,851 645,426 20,104,377
Sep-14 2,878,173 6,720,323 7,939,166 1,228,466 614,233 19,380,361
Oct-14 2,785,258 6,493,652 7,639,661 1,167,203 583,602 18,669,377
Nov-14 2,694,016 6,271,062 7,345,547 1,107,044 553,522 17,971,190
Dec-14 2,604,416 6,052,478 7,056,727 1,047,967 523,983 17,285,571
Jan-15 2,516,429 5,837,828 6,773,106 989,953 494,977 16,612,294
Feb-15 2,430,026 5,627,042 6,494,590 932,984 466,492 15,951,135
Mar-15 2,345,178 5,420,050 6,221,087 877,041 438,520 15,301,877
Apr-15 2,261,858 5,216,784 5,952,508 822,104 411,052 14,664,306
May-15 2,180,037 5,017,177 5,688,763 768,156 384,078 14,038,211
Jun-15 2,099,688 4,821,163 5,429,765 715,179 357,590 13,423,385
Jul-15 2,020,787 4,628,677 5,175,429 663,156 331,578 12,819,627
Aug-15 1,943,305 4,439,656 4,925,671 612,069 306,035 12,226,736
Sep-15 1,867,218 4,254,037 4,680,409 561,902 280,951 11,644,517
Oct-15 1,792,500 4,071,759 4,439,562 512,638 256,319 11,072,779
Nov-15 1,719,128 3,892,763 4,203,050 464,260 232,130 10,511,331
Dec-15 1,647,076 3,716,988 3,970,795 416,754 208,377 9,959,990
Jan-16 1,576,321 3,544,377 3,742,721 370,102 185,051 9,418,572
Feb-16 1,506,840 3,374,873 3,518,752 324,290 162,145 8,886,900
Mar-16 1,438,609 3,208,421 3,298,814 279,303 139,651 8,364,799
Apr-16 1,371,607 3,044,964 3,082,836 235,125 117,563 7,852,095
May-16 1,305,811 2,884,450 2,870,745 191,743 95,872 7,348,620
Jun-16 1,241,198 2,726,825 2,662,471 149,142 74,571 6,854,207
Jul-16 1,177,749 2,572,037 2,457,947 107,307 53,654 6,368,694
Aug-16 1,115,442 2,420,035 2,257,104 66,226 33,113 5,891,920
Sep-16 1,054,257 2,270,770 2,059,876 25,884 12,942 5,423,728

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