French Rooftop Solar Tender Falls Short, Prices Drop

• France's solar tender falls short but hits record low costs, prompting policy tweaks to boost participation and meet ambitious 2030 PV goals.

The French government's latest rooftop solar tender fell short of its 400 MWp target, with only 278 MW of projects selected across commercial roofs, solar shade structures, and car-park canopies. Despite the undersubscription, the auction achieved a new low in costs, with a weighted average bid of €97/MWh, continuing a trend of decreasing prices due to competitive bidding, cheaper modules, and streamlined financing. However, structural issues such as roof-load restrictions, lengthy permitting, and evolving carbon-footprint rules hinder progress toward France's 2030 goal of 54 GW of cumulative PV capacity.

In response, the government is adjusting its approach, with the Energy Regulatory Commission (CRE) targeting 400 MW in the next tender, including a reserved 50 MW for smaller systems. Officials are considering easing documentation requirements and revising the carbon-score threshold to encourage participation. Despite the challenges, the latest clearing price remains attractive for asset owners, offering high single-digit internal rates of return with 20-year inflation-indexed contracts. The success of future tenders will depend on faster permitting and a stable tariff path to attract more developers.

Why did France's rooftop solar tender fall short of its 400 MWp target?

• Roof-Load Restrictions: Many commercial and industrial buildings have structural limitations that prevent the installation of solar panels, reducing the number of eligible rooftops for solar projects.
• Lengthy Permitting Processes: The time-consuming nature of obtaining necessary permits and approvals can deter developers, leading to fewer projects being submitted for the tender.
• Evolving Carbon-Footprint Rules: Changes in regulations regarding the carbon footprint of solar installations can create uncertainty and additional compliance costs, discouraging participation.
• Market Uncertainty: Fluctuations in policy and regulatory frameworks can create an unstable environment, making developers hesitant to commit to new projects.
• Financial Barriers: Despite decreasing costs, initial investment and financing challenges can still be significant barriers for smaller developers or those new to the market.
• Competition from Other Energy Sources: Other renewable energy sources or energy efficiency measures might be more attractive or feasible for some potential participants.
• Limited Awareness or Expertise: Some potential participants may lack the necessary knowledge or expertise to navigate the tender process effectively.
• Grid Connection Issues: Challenges related to connecting new solar installations to the grid can be a deterrent for developers.
• Economic Conditions: Broader economic factors, such as inflation or interest rates, can impact the financial viability of solar projects.
• Policy Adjustments Needed: The government is considering easing documentation requirements and revising carbon-score thresholds to encourage more participation in future tenders.