The Limits of Sharing: Where Problems Arise with Electricity

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Sharing is caring – but what if sharing becomes associated with so many hurdles that it becomes infeasible?

This is exactly the case with renting and selling self-generated electricity.

The energy revolution is often referred to as a showcase for decentralized and disruptive change, because anyone and everyone can now become an electricity producer through their own solar installations. By generating their own electricity through small wind or solar installations, more private individuals than ever before can contribute to the shift towards renewable energy.

But what happens to the self-generated electricity? Can it simply be sold on to next door neighbors?

This is where it gets complicated: If you generate your own electricity, you can usually cover 20-30% of your own electricity consumption. As long as the EEG subsidy is still in effect, the rest is usually fed into the general power grid and the operator earns a fixed rate on it.

However, since this feed-in tariff is regulated by the date of commissioning and expires after 20 years, the very first photovoltaic systems will fall out of the EEG subsidy in 2021. For the owner, this means that feeding into the power grid is no longer guaranteed. The consequence? Many operators want to go into marketing themselves and pass the electricity on to their neighbors or their municipality.

Passing on electricity – how does it work?

The start-up Connectra provides an example of how this could work in practice. They want to make it easier for operators of a solar power system to pass on the electricity they generate to a neighbor with an electric car via a wallbox, thus providing them with a charging option. After all, not everyone who lives in an apartment building, for example, has the opportunity to set up their own charging station in the front yard. Many are dependent on “outside” charging options in their neighborhood.

However, the lack of a widespread charging infrastructure is - as of today - still all too clear. In rural areas in particular, there are only a few charging stations, which makes it difficult to use an electric car there.

One solution to counteract this lack of infrastructure would be the exact electricity sharing issue mentioned earlier: A household with solar panels on its roof provides its neighbors with the electricity it generates for their electric car. The solar panel operator can market their electricity and the owner of the e-car can easily charge their car during the night. Both would be less dependent on a large electricity provider: Neither in the purchase of the electricity nor in the construction of an accessible charging station.

But this idea seems easier than it ultimately is.

The costs of selling electricity

Connectra itself has noted and criticized its own development: Selling your own electricity is expensive and unattractive. If you want to sell or pass on your self-generated electricity, you are bound by many requirements and high costs. This is not economically attractive.

In addition to various ancillary costs, the basic electricity price also includes the EEG levy and value-added tax. This is because anyone who brings in more revenue from the photovoltaic system than they have invested must register a trade for it.

In addition to the increased costs, which make the process unprofitable, various reporting requirements also prevent individual citizens from easily selling electricity locally. A situation that, according to critics, can be attributed to policy decisions that are out of touch with reality.

Current regulations are designed to ensure that the generation and sale of electricity is the responsibility of large corporations, for whom such efforts and costs are manageable. However, in order to actually live up to the claim of a disruptive and decentralized energy transition, further adjustments are needed to make electricity generation lucrative for private individuals over the long term as well.