Scaling Up Rooftop Solar PV

Project Summary:

The objective of this grant is to support the development of Turkey’s rooftop solar PV(RSPV) market, including informing preparation of a new World Bank lending operation in support of the RSPV market. The solar boom in Turkey (from 40 MW in 2014 to almost 3,500 MW at the end of 2017) to date has been primarily limited to ground-based projects under 1 MW in size in order to take advantage of the unlicensed feed-in-tariff (FiT) schemes. As of the end of 2017, only 200 MW of RSPV had been installed in Turkey, mainly in large industrial and commercial. In contrast, fully developed solar markets such as Germany, the US and Japan produce a significant portion of solar capacity through RSPV applications with 1KW and 10MW capacities.  

 The RSPV market potential in Turkey for the next ten years has been estimated at 4 GW, taking grid capacity constraints, projected growth in RSPV sales, affordability and creditworthiness into consideration. This World Bank KGGTF grant will help address some of the barriers for RSPV scale-up in Turkey, which were identified in a market assessment carried out by the World Bank in 2017. The grant will support the development of technical standards and quality assurance systems for RSPV installations, design financial schemes and Government support options for various markets segments and define viable business models adapted to the applicable regulatory framework. The activities under this program are expected to inform a potential new World Bank lending operation in support of the RSPV market. The World Bank team will ensure that knowledge exchange events, capacity building activities and engagement with institutions and companies from the Korean energy sector are undertaken.

List of Activities:

1. Development of technical standards for RSPV installations – Increased quality of RSPV installations, Streamlined permitting for RSPV installations
2. Design of dedicated financial products for development of the RSPV market - Unlocking of private financing for RSPV systems
3. Assessment of incentives for RSPV deployment in the industrial sector - Scale-up of RSPV installations in industrial buildings 
4. Knowledge sharing and capacity building with Korean partners - Increased knowledge on design and implementation of RSPV programs

Outcomes:

Output 1:

• Standards for: (a) solar panels and modules; (b) solar invertors; (c) installations; (d) grid interconnection; and (e) testing of structural stability of roofs for RSPV installations

Output 2:

• Viability, efficiency and effectiveness of various financial instruments analyzed
• Design parameters and implementation arrangements defined for selected instruments
• Design of financial instruments to be supported under IBRD project informed

Output 3:

• Viability and impact of incentives assessed
• Design of IBRD project informed

Output 4:

• Relevant Korean practices on business models, support mechanisms, ESS and BEMS, etc., identified

Outcomes:

• Improved efficiency:  The proposed activities will inform the design of cost-efficient financial instruments and incentives to scale up the deployment of RSPV by i) identifying the most appropriate combination of loans and other financial products to be offered for each market segment (i.e. residential, commercial and industrial, and public buildings) through local banks; and by ii) identifying the most effective incentives for the industrial sector, including subsidies (e.g. to be financed from a possible GEF 7 grant).   
• Greater resilience:  Lack of standardization of safety requirements in design, installation and integration with the grid has been identified as one of the barriers hindering growth of the RSPV market in Turkey. Development of standards (activity # 1) will not only help lower development time and costs, but also improve resilience of the installations as they abide to international technical, quality and safety standards, including those to prevent damage during seismic and extreme weather events. Consistent technical quality is also expected to facilitate adequate maintenance of the systems and thus extend their useful life.
• Increased competitiveness: The capacity that participating banks and EPC firms will built through the implementation of the prospective IBRD project will gradually enhance the competitiveness of the services that they will be able to offer to the different RSPV market segments. In addition, it is expected that commercial and industrial customers will experience an improvement in their competitiveness through the reduction of their energy costs. This has already been proven by some of the RSPV projects implemented as a result of the RE audits carried out under the EU IPA project.

Collaboration with K-Partners and Others:

• The Ministry of Trade, Industry and Energy of Korea (MOTIE)
• Korea Energy Agency (KEA)
• The Metropolitan Government of Seoul