Self-consumption is defined as consuming one’s own electricity production through renewable energy facilities (solar-powered, wind, geothermal or biomass). The owner of the facilities can then choose whether or not to connect them to the national grid.
If he/she connects them (which has a cost), he/she can sell all of the energy produced or only the surplus – at a price fixed by law – and re-inject it into the national grid. This is known as partial self-consumption. The surplus sale model is the most common in France and concerns about 70% of facilities.
In the case of non-connection, the model is called total self-consumption. This can be quite challenging as renewable energy production is intermittent and relatively irregular, especially when dependent upon changing weather factors. Where energy cannot be stored and there is no connection to the grid, the energy produced by renewable sources must be used immediately so as not to be lost, thus requiring energy consumption habits to be adapted.
This model is therefore more commonly chosen for isolated sites (avoiding costly network extensions) or at sites where production coincides perfectly with consumption needs. It is interesting to note that where surplus energy is produced, it is compulsory to configure the system so that this energy is injected into the public grid free of charge or to guarantee through a technical device that production is lower than consumption, thus justifying non-injection of energy into the grid.
What are the pros and cons of self-consumption today?
Factors encouraging self-consumption are growing
Over the last ten years, several ideological, economic and legislative factors have contributed to the development of self-consumption, which has been mainly individual (a single producer and consumer) but which is tending to become collective (several producers and consumers grouped together in the same geographical area).
In 2019, a study published in Le Parisien stated that 63% of French people said they were interested in producing and using their own energy, undoubtedly related to climate awareness and the growing appetite for local consumption.
The rise in self-consumption is also due to two trends that are gradually tilting the economic equation in its favour. On the one hand, the uninterrupted fall in the production costs of energy facilities, particularly those of the solar panel sector, which is the preferred solution for the French, has contributed to making self-consumption attractive. In less than five years, the price of a photovoltaic panel has more than halved. On the other hand, the gradual increase in the price of electricity has also encouraged self-consumption, which promises a cheaper and more stable cost per kWh.
Finally, various government schemes have encouraged self-consumption and self-generation (the fact of producing but not necessarily consuming your own energy). In particular, a law passed in 2017 allows self-consumers to use the renewable energy they produce directly, rather than selling it to EDF or another operator and then buying it back. At the same time, the law set feed-in tariffs for solar panels, locked in for a period of 20 years, which are particularly reassuring and advantageous for self-producers. The law also provides for tax benefits for facilities (incentives, VAT exemptions, etc.).
Some obstacles to self-consumption remain
Despite all these encouraging factors, certain obstacles – mainly economic and technical – remain.
First of all, the economic balance of the model remains fragile. In France, the price of electricity remains low and this does not always make individual investment in self-consumption profitable, especially as initial investment costs remain quite high despite continuing to come down in recent years. Indeed, on average, the cost of a photovoltaic installation consisting of about 30 m² of solar panels is around €8,000. As for photovoltaic energy batteries, which make it possible to store the surplus electricity produced and then release it at the appropriate time, their cost remains too high to be considered by self-consumers, unless they adopt great restraint in their energy use and thus reduce their need for storage.
Some people choose to reuse their car battery to give it a second life. However, if you use a battery that is not suitable for storage, it will become damaged quickly. It is therefore more cost-effective to invest in a suitable battery for a longer life.
Lastly, the subsidy schemes are often little known by the French or require complex administrative formalities. Incentives and subsidies for self-consumption are not always well directed and often focus only on low-power facilities.
What are the future prospects for self-consumption?
Many players are jostling for position
As this market grows, a number of players are positioning themselves in the design, production, sizing, installation, operation and/or maintenance of self-consumption solutions.
The major energy companies (ENGIE, EDF, Total) are developing solar power self-consumption equipment offers and incorporating them into their new markets in the same way as e-mobility or the Internet of Things. Renewable energy developers and operators, equipment manufacturers (Comwatt, Solarwatt, etc.) have also entered the market, seeing it as an opportunity to broaden their offer and their targets. For specialists in the supply of green electricity and gas (ekWateur, Enercoop, Ilek, etc.), self-consumption allows them to diversify their offer and strengthen their position. Finally, pure players offering smart systems that optimise the electricity usage of domestic appliances, such as Monabee or MyLight Systems, are also banking on the growth of the market to perfect their offers.
Collective self-consumption: a land of opportunities
The multi-annual energy plan (PPE), France’s energy roadmap, sets the number of self-consumption operations at 200,000 by 2023, including 50 in collective self-consumption.
In France, there are currently only about twenty experiments in collective self-consumption. However, many players could become interested in installing a collective self-consumption system. The most interesting strategy is one that brings together players with different and/or predictable energy usage to optimise energy consumption. For example, schools could be grouped with adjacent buildings, developers could integrate collective self-consumption in their development project (by trying to include buildings with different uses), etc.
Collective self-consumption was defined in law in 2016, and redefined in 2019 in the “Pacte” act; the challenge is to democratise the legal, contractual and economic structures adapted to collective self-consumption projects in order to make this model more common. But for the time being, the complexity of the legal and financial arrangements involved in installations have weakened its profitability.
At neighbourhood level, collective self-consumption is often cited as the future of energy governance or as offering the possibility of achieving energy independence. Collective self-consumption appears to be a way of increasing the resilience of a local area, through local and secure production, independent of national grids.
However, this statement has to be qualified by certain factors. For example, the lack of production during peaks in energy demand and therefore the forced use of the national grid, which in turn could increase its tariffs due to the gradual loss of users, or the environmental cost of producing the installations.
Some examples of self-consumption
A private individual living in a large house in Toulouse wanted to reduce their annual electricity bill. Arema installed 15 solar panels (4.5 kW) on the roof. The hot water heater was replaced by a thermodynamic water heater and the meter by a Linky smart meter. The most energy-intensive appliances (water heaters and two heat pumps) were connected to the Mylight Systems energy management system.
The total installation cost €23,000, but tax credits on the thermodynamic water heater reduced the investment to €19,000. The self-consumption grant and the resale of electricity also reduce the investment. This private individual estimates that the installation will pay for itself within ten years and has already seen their annual bill halved.
A couple living in a house in the Aude region of France installed four solar panels in 2015 on the south side of their roof. After installation, they changed their consumption habits: the washing machine and dishwasher are plugged into programmable sockets to coincide with peak production times. The hot water heater operates from 12pm to 2pm (thanks to a clock installed on the electrical consumer unit). For the vacuum cleaner and the iron, they make sure that there is sunlight and that no appliances are running at the same time. More generally, the installation made them aware of unnecessary electricity use and reduced their consumption.
In Sophia Antipolis, four office buildings have installed 2,500 m² of solar panels on their roofs and the car park shade canopies. The developer chose to integrate battery storage because the complex produces more than it consumes. The buildings are therefore independent in five key areas: heating, air conditioning, hot water production, lighting and ventilation.
Within a neighbourhood this time, the Société d’aménagement de la métropole Ouest Atlantique is planning a collective self-consumption project in an area of Nantes. This project will see approximately 10,000 m² of solar panels installation on roofs in the République district between 2023 and 2028. The green electricity produced will cover part of the consumption of the communal areas of the buildings and the premises on the ground floor. The electricity will be routed via the public distribution grid, but will not be resold, as the density and mix of the neighbourhood will ensure the energy produced is fully used.
Self-consumption is a developing model but still needs technical and legal adjustments to make it conclusively attractive and profitable for individuals and groups of individuals in the same geographical area.
Self-consumption allows you to better control your electricity production and consumption. It also contributes to the development of renewable energies and reduces the need to strengthen the national electricity grid.
Although solar-powered self-consumption, which is by far the most popular solution, seems very appropriate for tertiary buildings, where consumption is often aligned to daylight hours, the growth of teleworking may well lead to new installations in private homes. Indeed, the daily presence of a teleworker at his or her home could, in the future, provide make stronger arguments for self-consumption on a domestic scale.