"Power to the People" transitions in EU cities

"Power to the People" transitions by 2050 in different European Union cities: Empowering prosumerism and citizen investments in photovoltaic and storage systems 

Introduction

Imagine a European Union (EU) where every household plays a pivotal role in shaping a sustainable future, where rooftops gleam with solar panels, transforming solar irradiation into clean energy. This is not a far-off dream, but an attainable reality through the power of prosumerism. Prosumerism refers to the act of citizens investing in energy infrastructure that will transform them from simple consumers of energy to producers and self-consumers of energy (or as the term has been established in the relevant literature the past decade, “prosumers”) through small-scale renewable energy technologies installed in their residence, being able to provide flexibility to the grid by adjusting their consumption patterns.

As the EU pushes toward its ambitious goal of climate neutrality by 2050 through multiple legislation packages, the residents of European cities have an opportunity to stand at the forefront of this transition as prosumers. Typically, practices of self-consumption encompass the adoption and further diffusion of a wide range of renewable energy technologies and systems such as small-scale photovoltaic (PV) systems, battery energy storage systems (BESS), and smart-grid devices, which bring demand flexibility into the market.

In this context, PV self-consumption is becoming extremely important, especially in the residential sector. By fostering the adoption of small-scale solar PV systems, prosumers can help decentralize energy generation, reduce carbon footprints, and promote energy independence. Across the EU, these localized energy producers hold the key to accelerating the shift toward a low-carbon future, enabling the residential sector to become both energy-efficient and climate-neutral.

In a rapidly evolving energy landscape, prosumers investing in small-scale solar PV installations, can transform their homes into mini power stations, sparking a continent-wide energy revolution; one that brings the 2050 climate goals within reach, powered by the sun and driven by the people as active energy citizens.

Inspired by the potential of small-scale solar PV systems to promote sustainable energy and by implementing our conceived framework for transformative scenario design based on social innovations of energy citizenship (for more information see Deliverable 5.2), we explore ENCLUDE’s “Power to the People” storyline, which deals with the ways through which energy citizenship practices can be realized through citizens’ active participation in the energy market, such as prosumerism.

An important aspect of our analysis is the consideration of scenarios regarding potential future evolutions of the world. These outward-looking scenarios encompass varying degrees of climate- and energy-related actions, technological advancements, societal shifts, and behavior adoption rates, acknowledging uncertainties and embracing the depth of complexity of the European landscape. This way we manage to cover a broad range of future possibilities, which aids in the design of more resilient and foolproof decarbonization strategies. More specifically, three “future-world” narratives were explored, namely:

	“A Familiar World”  European citizens stick to what they know, steadily adopting rooftop solar PVs based on tried-and-true benefits. With a solid understanding of how solar panels can lower their bills and reduce their carbon footprints, they make the shift at a pace that mirrors national and EU policy planning at their countries.
	“A Unified World” In a world where knowledge is power, European citizens are making smart choices for their homes and their future. With a clear understanding of the economic savings and environmental benefits of rooftop solar PV systems, they are seizing the opportunity to harness the sun. As future electricity prices and technology costs of solar PV and BESS fall, the moment is ripe for action.
	“A Fragmented World” In a fragmented world, where tensions run high and priorities shift, European citizens hesitate to embrace rooftop solar PV systems. The increasing costs of solar PV and BESS further dampen enthusiasm, leaving households reluctant to invest. In this divided landscape, the potential of solar energy goes untapped, as uncertainty and lack of trust overshadow the benefits of going green.

More details about the ENCLUDE scenario space and the modelling process can be found in the open-access deliverables, Deliverable 5.3: Report on the decarbonization impact of energy citizenship at the local level & Deliverable 5.4: Report on the decarbonization potential of energy citizenship at the national and the EU levels.

Case studies

To explore participation in the energy market, we considered case studies from a broad geographical range. This is because EU Member States differ in their policies and legislative frameworks regarding prosumerism and the associated remuneration schemes. Additionally, the climate varies significantly across Europe, which directly affects solar irradiation levels in different regions. These variations have a major impact on the electricity generation and income potential of small-scale rooftop PV installations, as cities with higher irradiation can produce more solar power.

To this end, we selected and explored a set of diverse case studies across three EU Member States i.e., Denmark, France, and Greece, and major cities of different geographical and climate conditions and of diverse socioeconomic contexts to illuminate the full range of differences and demonstrate cross-cutting themes.

Research/Policy questions

What are the potential economic and environmental benefits of prosumerism for European citizens under different potential evolutions of the future?

As we move toward a sustainable future, demonstrating the economic viability of renewable energy investments is essential to engaging citizens in prosumerism and promoting their active participation in the green transition. Using the Dynamic high-Resolution dEmand-sidE Management (DREEM) model, we evaluated the potential returns of a 3 kWp rooftop PV system in various European cities, focusing on net present value (NPV) and payback periods considering the national policy frameworks.

By evaluating the prevalent policy schemes for incentivizing investments in solar PV and remunerating prosumers across Europe, we employed DREEM, to not only assess the technical side of energy infrastructure but also explore different business models and regulations, maximizing the value of energy products and guaranteeing fair returns for all actors involved.

The DREEM model’s insights underscore how diverse policy frameworks and pricing schemes affect the economic viability of solar PV systems, empowering stakeholders to make informed investment decisions in the energy market.

Dive into some key findings from our analysis below! For a deeper exploration of the decarbonization impact of energy citizenship at the local level, check out the comprehensive insights in Deliverable 5.3: Report on the decarbonization impact of energy citizenship at the local level.

Aalborg and Copenhagen in Denmark

Our analysis in Aalborg and Copenhagen, Denmark, highlights the profitability of small-scale solar PV investments with regards two policy schemes: net metering and a feed-in tariff (FiT). By assessing these schemes, we capture not only the technical aspects but also the impact of electricity retail prices and the policy landscape on investment viability.

Below, we provide the payback periods for each scheme in both cities, showing how different future-world scenarios affect the timelines for financial returns.

Payback periods for small-scale solar PV investments in Aalborg

Payback periods for small-scale solar PV investments in Copenhagen

Look at the future NPV of the investment under the different “future-world” narratives in the following figures.

We also examined the potential of prosumerism to reduce emissions in Denmark’s residential sector, focusing once more on Aalborg and Copenhagen. Our analysis sheds light on how much carbon emissions a 3 kWp rooftop PV system could prevent by 2050, and its results reveal notable differences between the two cities. Variations in solar productivity and Denmark’s unique energy mix, shape each city’s decarbonization potential, highlighting the role of local factors and the impact of different future scenarios on emission reductions.

Explore the decarbonization potential of rooftop PV investments in Aalborg and Copenhagen below.

Marseille and Paris in France

With France’s current FiT policy scheme, homeowners who produce excess electricity receive a fixed rate of 147.4 €/MWh, making solar energy not only an eco-friendly choice but a wise financial investment, that can pay off within a decade or less. Explore how quickly you can recoup your investment based on your location, also considering the various “world narratives”.

Payback periods for small-scale solar PV investments in Marseille

Payback periods for small-scale solar investments in Paris

Look at the future NPV of the investment under the different “future-world” narratives in the following figures.

We also evaluated the emission reduction potential of prosumerism in France's residential sector, focusing on Marseille and Paris. Our modeling reveals clear differences in decarbonization potential between the two cities, shaped by factors like solar PV productivity and the distinct attributes of France's energy sector.

We provide below the potential evolutions for emission reduction through a 3 kWp solar PV installation.

Athens and Thessaloniki in Greece

Small-scale solar investments are becoming increasingly important in Greece’s green energy landscape. By analyzing economic outcomes for prosumers in Athens and Thessaloniki, we identified the impact of policy schemes - net metering with no remuneration for excess electricity and a FiT scheme - on payback periods across different future-world scenarios. Below are the payback periods for both cities under each policy, illustrating the range of returns based on local regulations and energy market projections.

Payback periods for small-scale solar PV investments in Athens

 Payback periods for small-scale solar PV investments in Thessaloniki

Explore the future NPV of the investment under the different “future-world” narratives in the following figures.

For insights into the decarbonization potential of rooftop PV investments in Athens and Thessaloniki’s residential sectors by 2050, explore the projected trajectories for cumulative carbon emissions avoided, presented below.

How could different policy schemes empower prosumerism and further citizen adoption of small-scale PV systems by 2030 in different cities across the EU? What is the associated decarbonization potential?

In line with ENCLUDE’s “Power to the People” narrative, we aimed at examining the impacts of prosumerism on the future of citizen adoption of small-scale PV systems. To do so, we utilized the Agent-based Technology adOption Model (ATOM), developed to simulate the expected effectiveness of policy schemes on technology adoption (small-scale solar PV, BESS, heat pumps, etc.) in the residential sector, for the geographical and socio-economic context under study.

In this instance, the ATOM model offers insights into the further diffusion of small-scale PV systems, in terms of projected capacity additions, by 2030 at the national level of three Member States, i.e., Denmark, France, and Greece, also considering the three “future-world” narratives as well as the existing regulatory landscape of each country.

Dive into some key findings from our analysis below! For a deeper exploration of the decarbonization impact of energy citizenship at the national level of EU countries, check out the comprehensive insights in Deliverable 5.4: Report on the decarbonization potential of energy citizenship at the national and the EU levels.

Denmark

In Denmark, a FiT scheme (fixed at 62 €/MWh) could strongly drive residential solar PV adoption, though it introduces wider uncertainty compared to net metering, which has a more predictable and stable range across “future-world” narratives. Notably, in the optimistic “Unified World” narrative, the FiT’s uncertainty narrows after 2028, bridging the gap between eager adopters and risk-averse citizens, leading to higher early adoption.

For net metering with BESS, projections reveal that citizens show a more cautious approach, with expected PV capacity additions aligning closer to the lower uncertainty bound. Conversely, in net metering, outcomes are clustered near the upper bound, reflecting greater confidence and willingness to invest. Under the “Familiar World” narrative, net metering’s performance remains similar to “Unified World,” suggesting steady profitability without major perceived gains, while net metering with BESS varies significantly due to assumed subsidies (50% in “Unified World” vs. none in “Familiar World”).

In a “Fragmented World”, characterized by high electricity prices, net metering stands out, showing a marked influence on rooftop PV adoption. Even in a challenging future, citizens view net metering as beneficial, especially as prices soar compared to the more stable “Unified World” and “Familiar World” scenarios. This highlights net metering’s resilience as a strategy for citizens to manage energy costs. Overall, in a dystopian scenario, citizens appear less motivated to invest in small-scale solar due to low climate sensitivity, limited awareness, and a government focus on large-scale renewables rather than small-scale projects.

Explore the results of forward-looking simulations for the “future-world” narratives providing projections on PV capacity additions by 2030 under the three policy frameworks in Denmark below.

To evaluate the decarbonization impact of policy options in Denmark, we have analyzed key properties of the Danish energy landscape, such as carbon intensity and PV generation. This allows us to project how small-scale solar PV adoption could reduce CO₂ emissions in the residential sector by 2030.

We found that under the “Unified World” narrative, emission reductions are at their peak, with the FiT scheme showing the greatest decarbonization potential. In contrast, the “Fragmented World” narrative shows a lower CO₂ reduction overall. Initially, net metering makes the largest impact, but from 2027 onward, the FiT scheme, offering a fixed rate of 62 €/MWh, takes the lead in cutting emissions.

Take a closer look at the projected decarbonization outcomes for small-scale PV systems across the three policy schemes and potential future scenarios below.

France

In France, a FiT scheme with a fixed rate of 147.4 €/MWh drives higher PV capacity additions than net metering or net metering with BESS. Unlike Denmark, France’s “Unified World” narrative reveals significantly wider uncertainty for FiT, especially after mid-2025, though some early adopters are responding to this scheme. Despite lower early adoption than in Denmark, France’s total PV capacity additions are nearly double compared to Denmark’s, likely due to its larger population.

The FiT policy faces the highest uncertainty levels across all future scenarios. In the “Familiar World” narrative, there’s minimal early adoption, hinting that without a shift in mindset, citizens are less likely to invest early. Net metering achieves higher adoption than FiT up to mid-2025, while its impact diminishes thereafter. Net metering with BESS is even less impactful, underscoring the critical role of subsidies; as in Denmark, “Unified World” assumes a 50% subsidy for BESS, absent in “Familiar World”.

In a “Fragmented World,” net metering initially boosts PV adoption, extending its impact until mid-2026 before its impact declines below FiT’s. The FiT scheme faces greater uncertainty here than in “Familiar World,” reflecting a volatile environment where high electricity prices amplify citizens’ mixed perceptions on investment profitability. Notably, under “Fragmented World,” the pessimistic PV capacity projection for FiT falls below the optimistic outlook for net metering, suggesting that while FiT has the potential for higher capacity, net metering could achieve equal or greater adoption if citizens show greater investment willingness. Finally, net metering with BESS remains the least impactful on PV adoption across scenarios, further highlighting the importance of financial incentives and stable conditions to support adoption in challenging futures like the “Fragmented World.”

Take a closer look at the modeling insights on PV capacity growth across different future scenarios below.

To gauge the decarbonization potential of various policy approaches in France, we have considered the carbon intensity of the French power sector, offering a clear picture of estimated CO₂ reductions.

Under the “Unified World” narrative, as expected, the French residential sector shows the highest CO₂ reduction, with the FiT scheme leading the way—its impact is more than twice that of net metering and almost six times greater than net metering with BESS. Even in the “Familiar World” narrative, a FiT policy could deliver considerable emission cuts by 2030, though net metering maintains a strong, short-term decarbonization potential until 2025, nearly matching FiT’s impact.

In a “Fragmented World” narrative, net metering initially outperforms FiT, cutting approximately 4,900 tons of CO₂ equivalent by mid-2025. Yet by 2030, FiT overtakes, with emission reductions nearly three times greater than those achieved through net metering with BESS.

Explore the projected decarbonization potential of small-scale solar PV systems in France across these future scenarios in further detail below.

Greece

In Greece, a FiT policy with a fixed rate of 87 €/MWh is projected to drive the highest adoption of small-scale solar PV in the residential sector by 2030. Across all “future-world” scenarios, Greek simulations reveal narrow uncertainty bounds, suggesting that citizens have a clear grasp of the investment’s profitability. Notably, under the “Unified World” scenario, net metering with BESS impacts adoption more than net metering alone, highlighting the strong influence of an assumed 100% subsidy for BESS. This reduces “resistance toward PV investment,” underscoring the critical role of financial incentives in encouraging adoption.

In the “Familiar World” narrative, PV capacity additions for net metering are identical to those for net metering with BESS. This indicates the significant influence of the BESS subsidy on citizens’ investment decisions, as the projections assume a 90% subsidy for battery storage in this potential future. This scenario shows almost identical adoption rates across policy cases, with narrow uncertainty gaps, reflecting citizens’ confidence in PV investments. While total PV capacity is slightly higher in “Unified World”, the difference remains minor, indicating stable adoption across both future scenarios.

Under the “Fragmented World” narrative, net metering alone surpasses net metering with BESS by a small margin, attributed to a reduced 50% subsidy. Here, uncertainty is somewhat wider, especially for net metering with BESS, reflecting citizens’ divided views on investment benefits. This scenario shows fewer early adopters and increased caution, as citizens hesitate to invest without greater assurance of profitability and reliability, mirroring findings from similar narratives in Denmark and France.

Explore further how each policy scheme and “future-world” narrative shapes PV capacity additions in Greece in the figures below.

As far as the decarbonization potential of small-scale solar PV systems in Greece’s residential sector by 2030 is concerned, across the three policy options and “future-world” narratives, our analysis yielded the following results.

Notably, a FiT policy achieves more than double the emission reduction compared to either net metering or net metering with BESS. For the first time, however, in a “Unified World” narrative, net metering with BESS surpasses net metering in terms of emissions reductions.

Under the “Familiar World” narrative, the existing FiT scheme (fixed at 87 €/MWh) has the greatest decarbonization potential, achieving over twice the impact of net metering approaches. In the “Fragmented World” scenario, FiT once again leads in emissions cuts, underscoring its powerful role in Greece’s decarbonization.

See below more details on the projected impact of each policy scheme on emission reductions by 2030 across the “future-world”narratives.

More studies by ENCLUDE

You can explore results from more modelling studies by ENCLUDE project in the following links:

• Scenario design for energy citizenship
• Citizen-led transitions towards justice and inclusivity
• Impacts of Collective Energy Initiatives in Europe by 2030
• People-centered national energy systems
• Decarbonization potentials of energy citizen clusters