Due to the ever-increasing prices of electricity on the market, we are starting to look for alternatives. Renewable energy sources seem to be a good alternative in relation to the currently constantly rising electricity prices. Is photovoltaic in Poland a good investment? To be short and blunt – we all know that PV gives us renewable electricity obtained from the sun for free. But how exactly does this whole system work in Poland?

How does the Photovoltaic work?

Solar panels consist of photovoltaic cells that convert solar energy into electricity. Each cell consists of a layer of semiconductor materials, such as silicon, that absorb sunlight and generate electricity. These currents are then collected and transmitted to the battery or directly to the electrical grid.  I believe that at this stage we do not need to go further into the technical aspect.  And for those who like to know more, I have provided a link below, for a more detailed description:

How does the Photovoltaic work?

How much does the Photovoltaic in Poland cost?

The cost of installing such an installation depends on the current power consumption and factors such as the type of panels, installation costs and location.  Let’s assume on average the annual energy demand of a house in the range of 4000 kWh (~330 kWh per month).  We are talking about statistical consumption in a Polish home, where the use of an induction kitchen is used instead of a gas one and where a TV is quite often on. In addition, we have a whole range of regular household appliances and electronics at our disposal. But I have not taken into consideration heating the house with a heat pump. I mention this to you, because heating the house with a pump significantly affects electricity consumption throughout the year.

Panel manufacturers recommend overstating the rated power of the installation by about 25-30%. Therefore, I will present here a cost estimate for a set with a rated power of 5 KWP, instead of 4 KWP as indicated by the annual consumption. The cost of setting up such an installation can range from 15 to even 30 thousand zlotys. It is worth noting here that PLN 20,000 should  be enough for you to set up an installation with a satisfactory quality-price ratio. However, this is still quite expensive, and such a final costs extends the payback period of the installation. This begs the question. Is there a chance to reduce the final cost?

Mój Prąd 4.0

This question will be answered by the “Mój Prąd” program, or rather its fourth edition. The co-financing covers photovoltaic installations, energy storage and energy management systems. The program is dedicated to households in Poland. Only domestic persons generating electricity for their own needs can become beneficiaries. You can apply  for the program even if you purchased the installation after February 1, 2020. This means that you can qualify for the costs already incurred for a photovoltaic installation. The fourth call for proposals started on 15 April 2022 and will last until 31 March 2023 or until the pool of funds is depleted. The program also covers energy storage, which I would like to mention in the next part of this article.

What are the co-financing amounts?

If you request for subsidy covering PV micro installation, then you can apply for co-financing amounts up to 50% of the costs, but not more than PLN 6 000. In case that you submit a PV micro installation with an additional element for co-financing, the amounts are changing for:

  • for PV micro-installations up to 50% of eligible costs not more than PLN 7 000;
  • for energy storage up to 50% of eligible costs not more than PLN 16 000;
  • for heat storage facilities up to 50% of eligible costs, not more than PLN 5 000;
  • for the EMS / HEMS system up to 50% of eligible costs not more than PLN 3 000;

This means that from the previously assumed amount of 20,000 for a PV installation, can be lowered to 14,000. The good news is that the remaining 14,000 can be tax deductible, giving you an additional 17% (on average) refund. This is another PLN 2380 less deducted from the investment amount, although returned only during the annual PIT settlement. Okay, but does it make sense to invest such an amount in solar panels? When will it even pay off?

Is the Photovoltaic in Poland profitable?

Let me start by referring to the chart with the market electricity prices in Poland since 2001. The chart comes from the “Wysokie Napięcie” portal, which professionally deals with the subject of energy in Poland.

Monthly wholesale prices for energy - Photovoltaic in Poland
Wholesale prices for energy

The numbers speak for themselves. You will probably ask why your electricity bills have not soared by 400% compared to last years? Very good question. In a previous article (click) about the future of electricity in Poland, I described the government’s price freezing program. I also suggested how to use it. Thanks to that program, our bills did not soar so high.  But how long we can count on it? I don’t know.  I would like to note here that this program costs our budget your real money. This is increasingly affecting our taxes and the growing budget hole. However, I hope that electricity prices will normalize, just as gas prices are now normalizing, which I wrote about in a separate article (click).

This does not change the fact that at the moment, the general trend in electricity prices in the coming years will be heading rather upward. Let’s assume here that you consume around 300 kWh per month and your electricity bill oscillates around PLN 195. Take a look at the forecast below, which takes into account the averaged increase in electricity costs at the level of 5% year on year.  I would also like to draw your attention to the fact that having micro PV installations does not mean no electricity bills. In a typical PV installation, where you send excess electricity to your operator, you must continue to pay a subscription bill, which is on average 10% of your monthly bill. That’s why I reduced my savings by the mentioned 10%.

Conclusion from the table

Photovoltaic in Poland - comparing old and a new system
Photovoltaic in Poland – comparing old and a new system

Assuming the above scenario, we can expect a full refund of the installation costs after a period of 5 to 6 years of use. Each subsequent year is a saving not burdened with any retroactive expense. It is worth noting that the lowest reasonable warranty period for PV installations is 10 years. At the same time, manufacturers declare an average of 20 years of maintaining efficiency at the level of at least 80%. I would sincerely like to believe in these declarations but let’s face the facts.

Nowadays, it is very difficult to estimate which of the companies will remain on the market for the next few years, let alone 20. Beyond that, the fact is, that in this particular case, the investment in PV looks very promising and profitable. You can say: “OK, but I will not be able to auto-consume whole produced energy during the summer and I will need more energy than I can produce, during the winter. What about that?” Let me explain.

How does the new billing system work?

First, a few facts. The current system of billing with your electricity operator is called net-billing. In the net-billing system, you sell energy at the wholesale price and buy at the retail price. The smaller the difference between the stock price and the retail price, the greater benefits for you and the faster return on your investment. In net-billing, you sell 100% of the energy produced. In the previous system, you could deposit 100% and have 80% returned to you. Net-billing allows you to sell electricity at the exchange price of the previous month and the money from the sale lands on your sub-account.

You can use the accumulated funds in the winter, when the insolation will be at a much lower level.  On average, a local investor like you and me, will consume only around 30% of the energy produced directly and sell the rest to the energy company. Similarly, to the discount system, the designed PV installation should be oversized by about 30% in relation to the current consumption.  Let’s look at an example below, where I compare the current situation with the previous model:

Previous rules - Photovoltaic in Poland
Previous rules – Photovoltaic in Poland
Net billing rules - Photovoltaic in Poland
Net billing rules – Photovoltaic in Poland

The result

Today both, the current and previous system of depositing energy produced, gives a rate of the return at a very comparable level.  On the other hand, we are in a transitional period. From 1st July 2022, for two years, energy will be settled based on its average monthly price. And from 1st July 2024, the settlement will be based on the hourly exchange price. Yes – hourly basis. Energy prices in such case, will not always be beneficial for the prosumer. We must remember that power is produced not only by home installations, but also by large PV farms. If a lot of photovoltaic energy enters the grid at any given time, the selling price will be lower.  Therefore, less money will go to our subaccount, for which we will be able to buy less energy during the winter.  Is there any advice for this?

Energy Storage – Photovoltaic in Poland

As usual – a bit of substance at the beginning. How does energy storage work? These are advanced batteries. Electricity that cannot be consumed is transferred to them and stored in the form of a chemical substance. Then, after its re-transformation, it is possible to return the stored electricity again. This means that the electricity we collect can be stored in our private energy storage, instead of depositing it with the operator (which cost money).  Currently, the most popular technology for PV warehouses is lithium-ion technology.  Lead-acid versions are still available on the market, but due to low efficiency, electrical density and disposal issues, savings on purchase will be just apparent.

If you are interested in this type of technology, pay attention to the output power of such a device. If it is too weak, you will not use it with highly energy-consuming devices, such as an induction hob. You also need to know, that a standard 5 kWh energy storage will provide power for 6-7 hours of work of standard household equipment. However, you can reach for more or less value, which should be selected based on accurate estimates. This is one of the issues to consider, along with whether energy storage is safe.

What more?

Subsequently, the most important aspects will be the life of the energy storage both in the years of use and in the number of charging and discharging cycles. For the use of energy storage as an alternative to a power generator, the storage must be able to secure a minimum of 45% of the energy that we use during self-consumption. But! At present, energy storage is not able to power electric heating for a long time.  I’m talking about a heat pump. Even a really large fully charged energy storage will provide us with energy for a limited time depending on capacity and current consumption. And this, as you know, depends on the outside temperature, possible sunlight and many other factors.

You also need to take into account the cost of installing such a device – and I will point out here that they are really expensive. Currently, the 5 kW energy storage, taking into account the offers of various manufacturers, can be placed in the range from PLN 10,000 to even PLN 20,000. The average market price of this type of devices with such capacity is therefore approximately PLN 15,000.  Let me remind, that we can still use the subsidies for energy storage from the “Mój Prąd 4.0” program. It covers up to 50% of eligible costs, but not more than PLN 16 000.

Summary of Photovoltaic in Poland

Summary of Photovoltaic in Poland
Summary of Photovoltaic in Poland

We have all got used to the view of photovoltaic installations in our neighborhood. We experienced the PV “boom” in Poland a few years ago. Constantly changing regulations for energy depositing push potential prosumers towards self-consumption, suggesting investments also equipped with energy storages. But is it worth going in this direction? In my opinion, yes – the installation of PV in the new billing system is still profitable, and thanks to a good energy storage, we effectively reduce the costs of depositing energy, consuming it ourselves. New installations without major problems should actually last the next 15-20 years. A period that can be a series of increases in electricity prices. Frankly, I am afraid that until nuclear power plants start operating in Poland (which I wrote about here), electricity prices will continue to rise. By investing in PV + storage, we significantly reduce our vulnerability to the consequences of these increases.

Would you like to read more publications about “Home” on my blog? Click here. You may also get to main “Table of content“, which is available here. Do you want to stay in touch and get updates about new posts? Subscribe now and follow EinP in social media!

Special thanks to Eamon Gosney, who has helped with proofreading of this article.

kratkienergy.com/; bank.pl; ferrowings.pl; ekosunkoszalin.pl; wysokienapiecie.pl

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1 Comment

Eddy Winko · 06/03/2023 at 11:26

Nice article, thank you.
I recently read about Sono Motors, an electric car manufacturer, and the theory is that you will be able to use the cars battery to store your own generated electricity. That should make applying for a grant fun, not only for the car, but also the storage system 🙂

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