Column by Professor Jacob Ladenburg, associate professor Claire Marie Bergaentzlé and senior researcher Per Sieverts Nielsen. Published in Energy Supply May 2025.
The deployment of solar energy has increased sharply in recent years, from 1.3 GW in December 2020 to 3.9 GW in December 2024. This makes solar energy the renewable energy source that is currently growing the fastest. This is partly due to the fact that solar cells have become cheaper, thus giving homeowners and industry across the country better opportunities to install solar energy. A solution that helps to ensure a decentralized and robust energy supply, which is becoming increasingly important, for example in connection with power consumption. These are positive results, which we welcome.
The expansion of solar energy also includes large solar cell plants, located in fields around the country. More of these types of solar parks will undoubtedly be established in the near future to ensure sufficient renewable energy. With this in mind, the new municipal politicians and the players in the green tripartite will have an important task to consider and decide exactly where new solar panels should be allowed.
However, an effective expansion of renewable energy, including solar cells, requires insight into a wide range of factors. It would therefore be beneficial to create a comprehensive overview of Danish solar energy development that takes into account socio-economic conditions, current legislation and democratic considerations. An overview that does not exist today and can therefore lead to inappropriate local decisions that make waves nationally.
In the following, we will briefly review the three factors that should be included in a comprehensive overview - socioeconomics, legislation and democratic considerations.
How do we utiise our land in the best possible way?
If we start by taking a socio-economic perspective and look beyond the pure production costs, we can conclude that Danes are generally in favour of solar energy. In two scientific articles, we have analysed the attitudes of more than 1,500 Danes towards solar cells on agricultural land, industrial sites and private rooftops. And the results are clear. While 51 per cent strongly or very strongly support solar panels on agricultural land, the corresponding support for solar panels on industrial roofs is 93 per cent. Other large roof surfaces, such as municipal buildings or apartment blocks, are also ideal for solar energy.
The reason why large roofs are interesting is related to the socio-economic costs of different locations. There are no immediate neighbouring genes and associated socio-economic costs of placing solar panels on existing buildings, whether they are industrial heritage, residential buildings or schools. In contrast, solar farms in agricultural land are associated with more nuisances. The solar panels are placed on large contiguous agricultural areas. People living close to the new solar farms often experience a negative change in the natural/cultural landscape they live in. The view beyond fields changes to the view of an industrialised landscape, which can be in stark contrast to people's motives for living outside the cities. In the extreme case, studies show that if solar panels are placed close to buildings, the price of people's property can drop. This is a socio-economic loss.
Another important parameter to consider alongside the perception of the cultural landscape is the alternative value of agricultural land that could instead be utilised for food production, for example. In the future, both are certainly possible, as research is being done to make solar cells that allow agricultural production on the same area (under the solar cells) to a greater extent, but they do not exist now. Overall, both examples can therefore contribute to resistance to large-scale solar PV installations on agricultural land, and possible negative impacts on house prices increase the socio-economic costs of placing solar PV on agricultural land.
Legislation gets in the way
Secondly, if we look at the rules and legislation on solar PV, it can be a bit of a challenge to place solar PV systems on building roofs. Photovoltaics are covered by an overarching EU legislation for electricity, which Denmark has chosen to interpret and implement in a very strict way. The Danish rules require the establishment of a so-called energy community to take care of the tasks related to the establishment and operation of a photovoltaic system. Communities that require their own management in the form of a board with a chairman, a director or similar. At the same time, the connection to the existing electricity grid makes it a relatively extensive task to act as an energy community.
Let's take an example. A housing association in Hvidovre wants to install solar panels on their roofs so they can produce some of the electricity used by the residents themselves. There are five apartment blocks in the association with a total of 240 apartments, located on two different sites. With the current rules, it's unclear whether the housing association should set up an energy community for each of the five buildings, or whether they should have two, one for each site? In any case, establishing two or more energy communities for the residents of the 240 apartments becomes a major administrative hurdle.
The same applies to solar panels on the roofs of municipal buildings, which Lyngby-Taarbæk Municipality, among others, wanted to establish a few years ago, but had to give up because it was too expensive to establish an energy community to handle the administration.
Even if one or more energy communities are established, both the municipality and the housing association's desire to become self-sufficient in solar energy is further complicated. Under current rules, if you exchange electricity between two different buildings (or energy communities), you have to buy and sell it, even if you own them both. This means that the housing association and municipality must trade the electricity internally if they want to utilise it in a different building than where it was produced. In a housing association with five properties or a municipality with a double-digit number of buildings, you can easily imagine that the administration of buying and selling can quickly grow into an unmanageable and very resource-intensive task.
Fewer people paying for the grid
Thirdly, there are a number of democratic considerations that need to be taken into account when expanding solar power. To understand them, we first need to look at how we pay for electricity.
Our electricity bill consists of three different parts. The first part is the cost of producing the electricity, the second is the cost of transporting the electricity through the grid, and the third is electricity taxes. When we install solar panels and start producing and consuming our own power, we can save on our electricity bill. At the same time, we don't have to pay to the grid and we don't pay the taxes associated with our electricity consumption.
It may sound like a small thing, but it's important for politicians and everyone else for two reasons. Firstly, because it results in less tax revenue for the state, which could have been used to secure the green energy transition or for other purposes.
Secondly, because it means that the costs to the electricity grid that solar owners avoid are instead passed on to consumers who do not produce electricity themselves. Either because their home is not suitable for installing a PV system or because they cannot afford to invest in a system, for example.
In California, where private users in particular have invested heavily in solar panels, there have been examples of half the population in an area covering their own electricity consumption with a photovoltaic system and the other half of the population having to pay the entire cost to the grid.
In this way, our principle of fairness is challenged. If many people produce and consume their own power, it can create an imbalance in both the grid's economy and a social imbalance in society in the long term.
This is therefore a factor that must be taken into account if we are to ensure that the population continues to support solar energy.
Similarly, it could become a democratic challenge if it is not made easier for e.g. housing associations, companies or municipalities to establish themselves as owners of photovoltaic systems on large buildings where power is produced and consumed locally. Currently, much of the electricity from Danish solar power plants is produced in rural areas, where the financial profit from the production goes to the landowner, while the value of the houses near the solar park may decrease. At the same time, there are costs associated with expanding the grid to transport the electricity from the fields to consumers, most of whom live in urban areas.
If, instead, there is more freedom to establish shared power plants, for example on property complexes, production will be more likely to take place where the consumption is and the financial surplus will be distributed among a larger group of owners. This may be a more expensive solution in terms of pure production costs, but it can be a more stable solution from a socio-economic and democratic perspective.
Urgent need for an overview
As we mentioned at the beginning of this column, there is no doubt that solar energy and an increased spread of this form of energy is positive. But it naturally also entails several circumstances that we must actively consider.
We hope that the description of the three factors: the socio-economy, the legislation, and the democratic considerations, has made it clear that there is a need for a comprehensive overview of how we in Denmark can most efficiently expand with solar energy.
An overview that is becoming increasingly important, and which, among other things, the current tripartite negotiations and the upcoming municipal elections make it very relevant to establish quickly.
