Across the board, experts from all aspects of the Dutch solar PV industry agree that the market is maturing and has made great strides thus far in 2015. However, there is still plenty of work to be done before the market reaches its “adult” stage. Many Dutch firms are quickly working to aid the process of maturation in the solar PV market, leaving the most important question to be answered: What can the Dutch market players do to help the PV industry in The Netherlands to reach its peak of advancement? To investigate this complex question further, Mr. Craig Savy, Business Development Manager of DNV GL, shares his expertise on behalf of his company, an international firm known for its world-renowned testing, certification and advisory services to the energy value chain (in 2013 DNV GL has emerged from DNV, KEMA, Garrad Hassan, and GL Renewables Certification).
Truth be told, the solar game is starting to shift as the Dutch PV market is heading towards larger systems where more money is involved, and with this kind of growth comes challenges. Mr. Savy begins by discussing that there are developers who are active in Germany and are now looking to move to the Dutch market, as they have a strong track record and are looking to further their business endeavours.
“I see a risk in the fact that most Dutch developers have only been involved in smaller projects, and collective purchasing programs. Very few of them have experience with large scale projects which is necessary to convince in their financing or investment decisions.” He notes that the Dutch market will continue its upward developmental trend, but that German players could first push out Dutch business from the Dutch market because the level of experience required to develop such large projects is missing.
“The Dutch market needs to be aware that this is a real opportunity,” emphasizes Mr. Savy. “But there are two things we can collectively do as the Dutch Solar Industry. The first is to improve the quality of our solar projects, and the second is to professionalize by developing a standard approach.”
Firstly, in order to improve the quality, Mr. Savy discusses that it is vital to ensure the confidence level towards investors. Owners and financiers often feel that they would rather work with players they already know and with whom they have been successful. “We need to take a step back and look at lessons we could learn from other countries, such as Germany, as they have already gone through this learning curve. We also need to come up with a recommended practice that is transparent and creates a level playing field in the Dutch market. If we can get financiers who are already considering to enter the Dutch market to fully commit, and the owner and developers follow suit, we will have already made great progress.” He asserts that DNV GL is in the process of developing a recommended practice that will facilitate a standard level of quality investors can expect to have across the board when working with the Dutch market.
The second improvement the Dutch market can make is with regard to a more professional approach, which stems greatly from finance, and the importance of knowing how the developmental process should look from feasibility to site selection and financial close. “The Dutch market lacks a professional approach in this manner. If we can increase this level and demonstrate to owners and financiers that we have the knowledge and understanding of exactly how the process works to address and mitigate project risks and secure cash flow, far more projects of various sizes will be realized,” says Mr Savy encouragingly.
Mr. Savy’s interest in the improvement of the Dutch PV market comes in part from working with various SDE+ winners who approach DNV GL, slightly concerned that they may have missed a step with regard to the quality requirements of their projects. “They come to DNV GL explaining that they have maintained a certain level of quality throughout the process, but want DNV GL to double check and make sure they have not missed anything before the project is completed. We now see that there is a general awareness within the Dutch market, that it is imperative for us to achieve higher levels of quality and professionalism in developing solar PV projects, but that we need standards to show us exactly what needs to be done and how.”
In order to monetize the solar market in The Netherlands, these two issues must be resolved. Mr. Savy admits that the levels of quality and professionalism have improved, but are simply not high enough to improve business going forward unless change occurs. “If one of these projects, which is currently being financed, does not meet appropriate quality level and eventually the project ends up not generating a positive cash flow, what will happen in the investment world is that this will scare off potential future financiers. When this occurs, and the Dutch players cannot meet the quality levels expected and necessary for the market to sustain its upward momentum, the door will be even more open for foreign players who can provide this level of confidence. Or in the worst case, potential owners and financiers could just freeze their activity in the Dutch market completely, only returning in two or three years, which is a very long time in such a dynamic industry,” reveals Mr. Savy.