Everything we do at Bright Sunday aims at lowering CO₂ emissions on a global level by making the cleantech transformation easy and profitable for commercial and industrial customers. Our business is to offer cleantech as a service with zero upfront investments and savings from day one.

In Sweden, the total variable electricity cost per kWh is the sum of the price offered by the electricity supplier (often based on the Nord Pool spot price plus margin), variable electricity transmission cost (“elöverföringsavgift”), tax and VAT (added also on the tax).

For electricity produced by a solar PV system Bright Sunday charges a real term “flat” cost per kWh (adjusted annually by the higher of 0% and the inflation) over a contract term of 10-20 years. Relative to the comparable variable electricity cost, Bright Sunday typically offers a discount from day one. Electricity from the solar PV system not consumed can be sold to an electricity supplier at the market price with an administrative fee of approximately 4 öre/kWh and the revenue will be collected by the customer.

Consequently, the Bright Sunday pricing will become increasingly attractive over time if variable electricity costs rise faster than inflation. This document is intended to serve as a guide to help evaluate the Bright Sunday pricing model.

Inflation

Swedish inflation last ten years, 2011-2020, averaged 1.1%. Only once in the past ten years it reached the 2% target as defined by Riksbanken (Swedish Central Bank). According to Riksbanken and Statista inflation is forecasted to rise from 0.7% in 2020 to 1.82% by 2023. Even if inflation over time would reach the Riksbanken target inflation rate of 2% the average over the coming 15 years will most likely be lower.

Inflation can be expected to average 1.5-2% 2020-2035.

Electricity prices

In the two most southern bidding areas, i.e. the areas best suited for solar PV, the Nordpool day-ahead prices for the past ten years, 2011-2020, have averaged 32.22 öre/kWh (SE3 Stockholm / mid Sweden) and 33.63 öre/kWh (SE4 Malmö / southern Sweden). Prices in the two northern bidding areas SE1-SE2 have historically been somewhat lower.

Taking the long view, energy demand is forecasted to grow significantly in coming decades, despite improvements in energy efficiency and injection of solar PV electricity “behind the meter”. On an EU-28 level, demand for electricity will rise by around 17 percent by 2050. The demand increase is largely driven by population growth, general electrification of society and by electrification of transportation and industrial processes.

The increase in demand puts pressure on increased infrastructure investments. Svenska Kraftnät (the Swedish transmission system operator) expects to increase the power transmission fees by 100% 2018-2027, i.e. with over 7% per year. This increase will impact the variable electricity transmission cost.

As electricity demand is forecasted to grow faster than production capacity of relatively cheap renewables such as wind and solar and due to expected price increases of commodities and emission rights, the general expectation is that electricity market prices will increase significantly 2020-2040 and thereafter stagnate and even fall slightly (due to high production from wind and solar).

Energy analyst firm Energy Brainpool forecasts average EU electricity market prices to reach approximately 75 €/MWh by 2035. Looking at historical data the prices at the Nordpool market have been significantly lower than the EU average. In 2019 Swedish energy trader Bixia forecasted that Nord Pool spot prices will reach 49 öre/kWh by 2030. Energimyndigheten (Swedish Energy Agency) forecasts in an EU reference scenario the price (national average) to reach approximately 52 öre/kWh by 2040. Based on an approximation (made in February 2021) of Nordpool’s SE3 forward prices for the rest of 2021 of 30 öre/kWh the compound annual growth rate the coming 15-20 years can be expected to be 3-5%.

Energy tax on electricity has been on a steady and steep increase as well. Since 1996, when the electricity market was liberalized, the compound annual growth rate exceeds 5%.

Looking beyond yearly average prices, in the future market prices can be expected to fluctuate more on a day-to-day basis and be impacted by seasonality – lower prices summertime due to large share of cheap electricity from solar PV and higher in winter due to increased demand and less electricity from solar PV.

Electricity prices can be expected to rise up to 5% per year 2020-2035

Photo by Ola Grönlund

Sources:

• Skatteverket / Ekonomifakta, energy tax for electricity 2021: 35,6 öre/kWh, some companies are exempted from the tax.
• “HICP – inflation rate”, Eurostat.
• https://www.riksbank.se/sv/penningpolitik/penningpolitisk-rapport/2021/penningpolitisk-rapport-februari-2021/ and https://www.statista.com/statistics/375283/inflation-rate-in-sweden/
• https://www.di.se/nyheter/industrin-rasar-mot-elhojningarna-avgiften-hojs-med-100-procent/
• Energy Brainpool: EU Energy Outlook 2050 – How will Europe evolve over the next 30 years?
• https://aleasoft.com/cold-snap-fall-wind-energy-production-make-electricity-markets-prices-soar/

Somelos Tecidos located close to Guimarães north of Porto in Portugal, is a family owned group of twelve companies in the textile industry, with clients all over the world in the upper mid market range. Somelos has a huge electricity need and have therefore always had the sourcing of electricity at the right price as their focus. Bright Sunday is currently installing 1.13 MW of solar PV at their private industrial park of 200,000 square meters.

-We are pleased to start this partnership together with Bright Sunday. Not only is this an important step in our green transition, but making the production more sustainable is the most important issue nowadays for our clients, says Paulo and Antonio Melo, CEOs of the Somelos Group.

The Bright Sunday team is extremely happy and proud to be selected as Somelos’ long term partner as we know they have a deep understanding of their own electricity needs and the energy market as a whole. They are not only one of the leading Portuguese textile manufacturers, they are also as focused on the long term as  we are. We are already exploring a future expansion of the 1.13 MW to a total of over 3 MW, in order to further meet their electricity needs.

Everything we do at Bright Sunday aims at lowering CO₂ emissions on a global level by making the cleantech transformation easy and profitable for commercial and industrial customers. Our business is to offer cleantech as a service with zero upfront investments and savings from day one.

The current total electricity price offered by the electricity supplier is typically made up of the electricity market price (MIBEL, the Iberian Electricity Market), electricity supplier margin and additional consumption based costs and taxes.

For electricity produced by a solar PV system Bright Sunday charges a real term “flat” cost per kWh (adjusted annually by the higher of 0% and the inflation) over a contract term of 10-20 years. Relative to the price offered by the electricity supplier, Bright Sunday offers a significant discount from day one. Electricity from the solar PV system not consumed can be sold to an electricity supplier at the market price with an administrative fee of approximately 5 €/MWh and the revenue will be collected by the customer.

Consequently, the Bright Sunday pricing will become increasingly attractive over time if electricity market prices rise faster than inflation. This document is intended to serve as a guide to help evaluate the Bright Sunday pricing model.

Inflation

Inflation last ten years, 2011-2020, averaged 1.57% in Spain and 1.16% in Portugal. Inflation 2020 was negative in both Spain and Portugal, largely caused by the Corona pandemic. In January 2021 Statista forecasted inflation in 2025 to be 1.69% in Spain and 1.52% in Portugal. Even if inflation over time would reach the ECB target inflation rate of 2% the average over the coming 15 years will most likely be lower.

Inflation can be expected to average 1-2% 2020-2035.

Electricity prices

In the past years the price differences of the MIBEL day-ahead prices for Spain and Portugal have been negligible. In this document, for reasons of simplicity, the same is also assumed to be true going forward. During 2020 electricity prices were volatile and on average significantly lower than in 2019:

• 2019: 48 €/MWh
• 2020: 34 €/MWh

The price drop 2020 broke the upwards trend and was a direct result of lower demand caused by the Corona pandemic. However, since May 2020 prices have been rising and in Q4 they were back to more normal and expected levels (40-60 €/kWh). Early January 2021 the day-ahead prices were high (40-100 €/MWh) and the 12 month future contracts that were traded were priced at approximately 48 €/MWh.

Taking the long view, energy demand in Spain and Portugal is forecasted to grow significantly in coming decades, despite improvements in energy efficiency. On an EU-28 level, demand for electricity will rise by around 17 percent by 2050. The demand increase is largely driven by population growth, general electrification of society and by electrification of transportation and industrial processes.

Capacity increases of low cost renewables, such as wind and solar, take very long time to implement. As demand will grow faster than the renewable production capacity expansion, the general expectation is that electricity market prices will increase significantly 2020-2040 and thereafter stagnate and even fall slightly (due to high production from wind and solar).

Energy analyst firm Energy Brainpool forecasts average EU electricity market prices to reach approximately 75 €/MWh by 2035. Looking at historical data the prices at the MIBEL market have be in the mid-high range compared to the EU average. With a 2020 base value of 34 €/MWh the compound annual growth rate the coming 15 years will exceed 5%. Energy analysts firm Aurora also predicts the MIBEL prices to rise more than 5% the coming 10 years.

Looking beyond yearly average prices, in the future market prices can be expected to fluctuate more on a day-to-day basis and be impacted by seasonality – lower prices summertime due to large share of cheap electricity from solar PV and higher in winter due to increased demand and less electricity from solar PV.

Electricity prices can be expected to rise up to 5% per year 2020-2035

Photo by Matthew Henry

Sources:

• “HICP – inflation rate”, Eurostat.
• Energy Brainpool: EU Energy Outlook 2050 – How will Europe evolve over the next 30 years?
• https://aleasoft.com/cold-snap-fall-wind-energy-production-make-electricity-markets-prices-soar/
• Aurora Iberian Power Market Forecast, April 2020.
• The estimated price increase excludes, potentially even faster rising, taxes and consumption based costs (Spain “Recargo por excesos de potencia” and Portugal “Potencia Horas Ponta”).

Everything we do at Bright Sunday aims at lowering CO₂ emissions on a global level by making the cleantech transformation easy and profitable for commercial and industrial customers. Our business is to offer cleantech as a service with zero upfront investments and savings from day one.

Bright Sunday charges customers a flat cost per kWh for the electricity produced by the solar PV system over a 10-20 year contract. Consequently, for the system to generate the expected savings for the customer and the expected revenues for Bright Sunday it has to produce as estimated. This incentivizes Bright Sunday to select premium hardware and to properly monitor and maintain the system.

With correct hardware and maintenance a solar PV system has an expected technical lifetime of more than 40 years. At the end of the contract customers may continue the service or buy the system for €1. Consequently, making the right technology choice is of great financial importance for both Bright Sunday and the customer.

This document is intended to serve as a guide to how Bright Sunday selects hardware and software components.

Smart system control and monitoring

All Bright Sunday solar PV systems will be integrated with the real time monitoring data analytics platform Quantum by QOS Energy. The Quantum platform communicates with the solar PV system via an industry grade GSM router. By using an independent GSM router system communication becomes reliable and independent of customer Internet connections, wifi access etc.

The data used for analysis is pulled from a logging device connected to the inverters and an energy meter placed in the main board. The inverter is the brain of the solar PV system and transforms the DC current produced by the PV panels to usable AC current. The inverter provides data on the status of the PV system and its production level whereas the energy meter provides data on total electricity consumed. To each inverter we specify the optimal logging device and energy meter. Since we only use premium quality three-phase inverters and high quality ancillary equipment we secure both quality power output and 100% control of the entire chain for continuous access to high quality data

To get complete data we also use a satellite service to measure solar irradiance on each installation location. All data is pulled into the Quantum platform, consolidated and made ready for analysis and presentation.

By using the Quantum platform we can share data with our customers on how much electricity the solar PV system is producing, its share of total electricity consumption and how much CO2 the system is replacing in real time and as an annual summary. Customers access data online or through an app provided by Bright Sunday.

The Quantum platform allows Bright Sunday to monitor the system’s performance ratio (which is the quality factor of the system) and provides detailed technical data on how specific system components are performing. Also, the Quantum platform will send alarms to Bright Sunday and our service partners, e.g. in case of loss of production. By continuously monitoring the system’s performance we can optimize service and repairs and secure optimal electricity production.

Setting up a smart system control and monitoring system goes beyond installing just a functioning solar PV system. With the Quantum platform Bright Sunday customers not only get control and peace of mind but also optimal savings.

Sustainable and reliable premium solar PV panels

When choosing PV panels multiple factors are important, e.g. price, performance and availability. PV panels used in Bright Sunday projects must, as a minimum, have a 10 year product warranty and the performance degradation must not exceed 0.7% per year over 25 years. Bright Sunday preferred suppliers are high-volume producers both rated as “tier-1” by Bloomberg New Energy Finance and “leader” by the Silicon Valley Toxics Coalition (SVTC). For the current supplier list please contact Bright Sunday.

A Bloomberg “tier-1” PV panel manufacturer is, simplified, rated as bankable and has own-manufacture products. This labeling provides comfort concerning product quality and the manufacturer’s ability to fulfill potential future warranty obligations.

The SVTC Solar Scorecard is a study where PV panel manufacturers are rated based on an independent and holistic sustainability performance assessment. It covers sourcing of materials (e.g. reporting on use of conflict minerals), production (e.g. reporting of use of energy and emissions and workers rights, health and safety) and end of life recycling commitments. By choosing manufacturers rated as “leader” we aim to secure sustainability in all aspects, which we believe is not only the right thing to do, but also ensures that our customer’s brand will benefit as well.

With Bright Sunday you get “solar as a service” based on a premium quality, sustainable and smart PV system that will maximize climate and financial benefits for many years to come – at zero investment and without the hassle.

We work with a limited number of premium inverter manufacturers only – for the current supplier list please contact Bright Sunday. All inverters have undergone rigorous testing and certification in accordance with international standards and country-specific grid connection requirements.

Tier 1 manufacturers have provided own-brand, own-manufacture products to six different projects, which have been financed non-recourse by six different (non-development) banks, in the past two years.

The Solar Scorecard is based on SVTC’s annual survey of photovoltaic (PV) module manufacturers, as well as on prior survey responses, interviews, news stories, and publicly available data. The goal of the Scorecard is to enhance transparency around environmental health, safety, and sustainability issues for communities, workers, and the environment. http://www.solarscorecard.com/2018-19/