Why solar stations are good for you and your commercial RE valuation in Latvia?

May 21, 2023

When electricity was invented in the 20th century, mankind reached a breakthrough in development and could begin developing energy production capabilities. In the beginning, the cheapest sources were fossil fuels, but now, due to various political-economic and environmental considerations, renewable energy is more profitable. At the moment, many people are concerned with the question “How effective are solar panels in Latvia?” More about it below in the article.

How do solar stations work?

When sunlight touches the solar panel, it enables the electrons in the semiconductor material and causes them to move, generating an electrical current. However, the statement “sunlight hits” is not entirely true, as solar energy is produced from the sun’s radiation and not sunlight. Sunlight is scattered in the atmosphere and reaches the earth’s surface even on cloudy days. That gives cold countries the opportunity to harvest solar energy even on cloudy days. Moreover, in cooler countries, the solar panel systems work longer and more effectively because in hot countries the panel surfaces overheat and lose their production effectiveness and therefore have a shorter lifespan. 

The production volume of solar panels is affected by several factors, including the performance of the panel technology, weather, day length, and air temperature. Although it may seem that solar panels will produce more in the middle of summer, in reality, solar panels can produce just as much electricity in the cooler months of March or April as they do in the summer.

Another advancement in solar technology is the development of anti-reflective coatings. These coatings allow solar panels to capture more sunlight and improve their efficiency, especially in low-light conditions. Additionally, solar panels are designed to capture light from different angles, which can also improve their performance in cloudy conditions. 

“Currently, the largest resource for the production of renewable energy is the Daugava hydroelectric station, which produces up to 80% of the total electricity produced from renewable resources in Latvia. However, this amount is not enough to cover a significant part of the total energy consumption in the country and it can be said that we are on the way to energy independence and cheap electricity. And although hydropower has a cheaper cost, building more dams is also not possible for environmental reasons, so if Latvia wants to become independent from oil and Russian gas in the future, we have to invest a lot of money in solar, wind, and hydrogen projects and energy storage batteries from today, not tomorrow or in the years to come.

I would like to see more businessmen also install power plants for self-consumption on the roof of the building because relying only on the solar plant projects of large developers, the real economic benefit will have to wait for a few more years, so Sunwise offers self-consumption solar plant design and construction works with self-financing (Power Purchase Agreement) and without,” says Kristīne Tarvida, managing partner of Sunwise.

Latvia is not self-sufficient and imports ~55% of the overall electricity it needs, hence the opportunity and need for building renewable energy power stations in Latvia. In the period from March 2022 till February 2023 Latvia had a 1’729’017 MWh electricity deficit as per AST (Augstprieguma tīkls) official data.

And if someone is still hesitant to say “yes” to solar power then here are some more reasons supporting building solar power stations:

#1 – rooftop PV stations raise property and business value

A personal solar plant for the company’s self-consumption is a smart decision because it increases the value of the real estate and reduces the electricity bill by up to 80%. Property value increases as it becomes more energy efficient. Also, in an average of 4-6 years, a small 100-500kW station has recouped its investment and the company produces free electricity for itself (the payback time of the investment depends on the size of the station and the complexity of the project – location, roof situation, connection capacity at the nearest “Distribution Network” point, etc.). Altum co-financing (30% capital discount) is also available for improving the energy efficiency of your company, and since it is possible to design and build the station within 3-6 months (for average 100-500kW projects), it means that you can own the station pretty soon and you don’t need very large investments. Sunwise also offers to carry out pre-design research and financial calculations for the purchase of the most suitable equipment tailored for the company’s needs and can also help apply for co-financing.

#2 – it’s free energy that everybody wants to get

SolarPower Europe (SPE) estimates PV in Europe grew by 47% in 2022, rising from 28.1 GW in 2021 to 41.4 GW this year. Germany installed the most with 7.9 GW, followed by Spain at 7.5 GW, and Poland at 4.9 GW. If solar wouldn’t be financially and security-wise a smart choice – why are the top European economies investing in it?

The EU’s total solar power capacity grew by 25%, from 167.5 GW in 2021 to 208.9 GW in 2022, according to SPE. The industry body forecasts annual PV growth in Europe will be 53.6 GW in 2023, and 85 GW in 2026. This means the EU solar market is set to more than double within four years, reaching 484 GW by 2026. 

“Solar is offering Europe a lifeline amid energy and climate crises. No other energy source is growing as quickly, or reliably, as solar. We’re building a secure, green, prosperous Europe on a foundation of solar,” said Walburga Hemetsberger, CEO of SolarPower Europe. 

#3 – to have cheaper electricity

In order to ensure effective cooperation and the flow of electricity in the European energy network, there are plans at the national level to rebuild and expand the lines of the “Distribution Network” and “High Voltage Network” (a total investment of ~84 million euros has been obtained from the EC) and to build large-scale solar and wind plants (both themselves and by ordering from other companies through procurement). In order for the price of electricity to decrease, Europe needs larger renewable energy stations, and in order for electricity to reach the Baltics and Central Europe, network construction works are needed, which will help make the electricity voltage in the wires uniformly fast and high enough in terms of power and frequency.

#4 – helps lower CO2 emissions in the air

The electricity produced from sun radiation cannot run out and doesn’t cause CO2 emissions, so this energy source is a valuable substitute for oil and gas resources. On average, it is calculated that each 10 MW power plant can offset 11,194 tons of CO2 released into the atmosphere per year. This is equivalent to a forest of ~503,730 trees filtering CO2 and turning it into oxygen for one year. It is important for us to achieve the national sustainability goals and the requirements imposed by the European Commission in relation to the reduction of dirty gas emissions, and also simply because the exhaust gases from factories, cars, and the processing of petroleum into electricity releases many different gases in the atmosphere that cause diseases (asthma, ischaemic heart disease, lung cancer, etc., as reported by the World Health Organization).

#5 – it’s fast to build

It takes 3 to 12 months (max, and depends on the station size) to do the initial calculations, and measurements, get permits, and do the actual construction work, but then on the 1st day of deployment, you can start producing and consuming electricity. In comparison to wind farms – wind projects take 6-8 years to come to life.

#6 – cost-effective maintenance

Solar panels require little and infrequent maintenance (usually the inspection is done twice a year as the station does not have any technological risks that require more frequent inspections). In addition, compared to other energy production sources, solar panels have a longer service life of 25 to 30 years, which reduces the need for frequent replacement and repair. This is especially important in regions where harsh winters or summers can damage the country’s large energy grid.

In conclusion, Latvia is a good place for solar power plants, as they can operate even without bright sunlight, thanks to our long spring, summer, and autumn days, low maintenance costs, as well as relatively cheap installation costs. In addition, it is financially beneficial to build solar plants directly for entrepreneurs on the roofs of their factories or other business buildings. Find out more about co-financing from the state or us for the creation of your own power plant here: info@sunwise.lv