New dynamics are taking place in the European power sector. The strong cost decrease of distributed generation and storage technologies makes our energy system more decentralized but also, and more importantly, transforms the way value is created. Clearly, players in the retail market today need to operate closer to the end-consumer.
Against this background and in order to shed some new light on the current debate around prosumers, this report analyses different policy scenarios. It models – for three representative European markets – several combinations of solar and storage solutions. Each time, various options are considered depending on how the self-consumed and injected solar electricity is remunerated. This approach allows to better estimate the concrete economic benefits for end-consumers and, from there, to explore how energy suppliers incumbent or new entrants – will be able to capture business opportunities by creating new value propositions for their customers. These new offers will in turn make distributed generation smarter and more system relevant.
In this new decentralised world, solar will become a new factor of performance and differentiation amongst energy suppliers. Some may decide to continue operating in a business as usual mode. Others will seize this new opportunity, create new business models, and run ahead of the pack.