Global Solar PV Market Report

Favourable policy measures along with fiscal incentives have been the primary driver for renewable deployment in France. The Renewable Energy Acceleration Bill adopted by the French Legislators in February 2023 aims at simplifying procedures and reducing the deadlines applicable to renewable energies, thereby accelerating the development of renewables. Besides launching the identification of renewable energy “acceleration zones” and setting short timeframes for authorities to examine projects applications therein, the bill includes measures to promote the installation of agrivoltaics and a mandate to install solar panels on parking lots larger than 1500m2 on at least 50% of their surface. The latter measure is expected to add 11GW of solar to the country’s energy mix, doubling its existing solar capacity.

The calls for tenders, being significant factors for achieving solar growth targets, the French government has decided to launch two additional tender rounds in June 2023 to allocate 2.3GW of solar capacity. The capacity will be split into a 1.5GW procurement exercise for ground-mounted projects and an 800MW tender for rooftop installations. The new capacity will compensate for the high failure rate of the previous tender round for large-scale ground- mounted solar plants, which only had seven winners, for an allocated total of 115MW. Notably, the tender criteria have been modified in 2022 to include Agri-PV projects, either in the form of agrivoltaic canopies above crops or ground- mounted projects, on uncultivated agricultural land of more than 5 years, or land that is hosting livestock.

In terms of fiscal benefits, the government extended its support by increasing the fixed feed-in tariff (FIT) threshold for from 100kW to 500kW in Autumn 2021. This is meant to make procedures easier for the mid-sized rooftop market segment, where projects were previously limited by tendering procedures. Also, a new FIT scheme will be introduced in 2023 for ground-mounted projects under 1MW installed on degraded land.

Solar PPAs have emerged as another important driver and France is actively promoting the PPA space. The country’s Nouvelle-Aquitaine region has announced aid to support the growth of solar PPAs. Companies are eligible for two types of aid: a subsidy for technical and legal feasibility studies (to a maximum of 70% of costs), or funding assistance in the form of a loan or guarantee. Recently, many big developers have signed a Corporate Power Purchase Agreement for solar electricity. Some notable mentions are PPA signed between Q Energy and French retailer Les Mousquetaires, The Iliad Group and Engie, Toyota Material Handling and Alight.

In order to reduce the dependence on nuclear power for electricity generation, several routes have been activated by the French government to accelerate the expansion and development of renewable power, especially solar PV. To encourage local production of solar panels and other renewable technologies, as part of the France 2030 national investment plan, the French government will invest €1 billion in renewable energy innovation projects.
So far renewable energy tendering has proved to be a tool to expand the project base. However, contrasting results were observed in the two latest auctions conducted in January and April 2023. While the January auction was oversubscribed, allocating 173MW of solar PV capacity, 33MW more than the planned 140MW, the April 2023 tender round for commercial and industrial rooftop installations remained largely undersubscribed with only 58MW allocated of the 400MW originally planned. The discouraging result is mainly due to multiple bidders failing to comply with the financial security requirement. However, auctions are going to continue to provide investment opportunity in the sector as the government has already announced plans to hold a 1.5GW tender for ground-mounted PV and another tender for 800MW of rooftop capacity, in order to compensate the failure in the latest tendering round.

Agri-solar and floating solar are the two areas that are seeing increased activity in the recent times. For example, in the Haute-Saône region, TSE inaugurated its first agrivoltaic demonstration site on field crops in Amance. Energy developer Iberdrola won its first floating solar power project in France, with a total capacity of 25MW, due to be completed in early 2024.

The private investment is strengthening in the French solar market with the entry of new players as well as the expansion of projects under existing players. Among notable deals, Macquarie Asset Management led consortium is in the process of acquiring French solar developer Reden Solar from infrastructure companies Infravia and Eurazeo for €2.5 billion.

In order to facilitate faster deployment of renewable energy to counter the ongoing energy crisis, the government has made amendments to several tenders launched under CRE4 and PPE2 to fast-track more than 3.4GW of wind and 2.7GW of solar PV capacity to come online.