Photovoltaics: Marketing channels and investment case
The investment case for photovoltaics is based on three marketing legs: EEG, electricity exchange and PPAs.
The technology is mature and the investment case has been tried and tested for years - this makes photovoltaics an asset class that can be interesting for different investor groups. Commerz Real’s first solar fund was launched back in 2005; since then, the company has built up and expanded extensive experience with PV investments.
Three ways to market solar power
In addition to generation, the marketing of the generated electricity is also decisive for the investment case. There are basically three central models for this:
- EEG (Renewable Energies Act): The law, which has been in force since 2000, regulates priority grid feed-in and offers guaranteed remuneration - especially for smaller systems. For large plants, the fixed feed-in tariff has now largely been replaced by a tendering procedure with a market premium model, which acts as price hedging downwards.
- Electricity exchange: In direct marketing, electricity is sold at current daily prices. Since generation fluctuates depending on the weather and many plants feed in simultaneously, battery storage systems offer an important lever here: They allow electricity to be produced and fed in at a more favourable time (at higher market prices).
- Power Purchase Agreements (PPAs): Long-term purchase agreements with industrial customers, power suppliers or data centres - usually with terms between 10 and 15 years - are now considered the preferred marketing model for large plants. In Germany, the PPA market grew by more than 300 percent from 2022 to 2023. The German Energy Agency (dena) estimates that up to 25 percent of Germany’s electricity demand could be marketed by PPA by 2030.
Marc Böhnke, Managing Director of Evergy Engineering, sums up the importance of PPAs: “In Europe, power purchase agreements have developed into an important pillar of growth in the photovoltaics sector in addition to tenders and self-consumption.” He expects stable long-term profitability for the asset class, supported by falling development costs, improved system components and the integration of storage solutions.
There are various options for electricity marketing:
