Feed-in tariffs in Germany

Feed-in electricity tariffs (FiT) were introduced in Germany to encourage the use of new energy technologies such as wind power, biomass, hydropower, geothermal power and solar photovoltaics. Feed-in tariffs are a policy mechanism designed to accelerate investment in renewable energy technologies by providing them remuneration (a "tariff") above the retail or wholesale rates of electricity. The mechanism provides long-term security to renewable energy producers, typically based on the cost of generation of each technology.[2] Technologies such as wind power, for instance, are awarded a lower per-kWh price, while technologies such as solar PV and tidal power are offered a higher price, reflecting higher costs.

Further information: Feed-in tariff and Financial incentives for photovoltaics

Feed-in tariff for rooftop solar PV

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Development of feed-in tariffs for small rooftop PV systems smaller than 10 kW_p capacity since 2001 in ¢/kWh[1]^:62

As of July 2014, feed-in tariffs range from 3.33 ¢/kWh (4.4 ¢/kWh) for hydropower facilities over 50 MW to 12.88 ¢/kWh (17.3 ¢/kWh) for solar installations on buildings up to 30 kW_p and 19 ¢/kWh (25.5 ¢/kWh) for offshore wind.[3]

On 1 August 2014, a revised Renewable Energy Sources Act or EEG (2014) (colloquially called EEG 2.0) entered into force. The government will now stipulate specific deployment corridors to control the uptake of renewables and the feed-in tariffs themselves will be determined by auction.[4]^:7

The aim is to meet Germany's renewable energy goals of 40 to 45% of electricity consumption in 2025 and 55% to 60% in 2035. The policy also aims to encourage the development of renewable technologies, reduce external costs, and increase security of energy supply.[5]

In the first half of 2014, 28.5% of gross electricity production in Germany came from renewable sources.[6] The Federal Environment Ministry estimated that renewables were to save 87 million tonnes of carbon dioxide by 2012. The average level of feed-in tariff was 9.53 ¢/kWh in 2005 (compared to an average cost of displaced energy of 4.7 ¢/kWh). In 2004, the total level of reallocated EEG surcharges was €2.4 billion, at a cost per consumer of 0.56 ¢/kWh (3% of household electricity costs).[5] By 2013, the figure had risen to €20.4 billion.[7] The tariffs are lowered every year to encourage more efficient production of renewable energy. By 2014, the EEG surcharge – which pays for the additional costs through feed-in tariffs – had increased to 6.24 ¢/kWh.[8] As of July 2014, the regular reductions (degressions) were 1.5% per year for electricity from onshore wind and 1% per month for electricity from photovoltaics.

The solar sector employed about 56,000 people in 2013, a strong decline from previous years, due to many insolvencies and business closures. Although most of the installed solar panels are nowadays imported from China, the Fraunhofer institute ISEestimates, that only about 30% of the EEG apportionment outflows to China, while the rest is still spent domestically. The institute also predicts that Germany's solar manufacturing sector will improve its competitive situation in the future.[9]

Progression of solar PV FiTs before 2012

The feed-in tariff system has been modified frequently. The feed-in tariff, in force since 1 August 2004, was modified in 2008.[10] In view of the unexpectedly high growth rates, the depreciation was accelerated and a new category (>1000 kW_p) was created with a lower tariff. The facade premium was abolished. In July 2010, the Renewable Energy Sources Act was again amended to reduce the tariffs by a further 16% in addition to the normal annual depreciation, as the prices for PV panels had dropped sharply in 2009.[11] Another modification of the EEG occurred in 2011, when part of the degression foreseen for 2012 was brought forward to mid-2011 as a response to unexpectedly high installations in the course of 2010.[12]

Feed-in tariffs for newly installed photovoltaic systems paid over 20 years [¢/kWh][13]

Type		2004	2005	2006	2007	2008	2009	2010	July 2010	October 2010	2011	January 2012
Rooftop-mounted	up to 30 kWp	57.40	54.53	51.80	49.21	46.75	43.01	39.14	34.05	33.03	28.74	24.43
	above 30 kWp	54.60	51.87	49.28	46.82	44.48	40.91	37.23	32.39	31.42	27.33	23.23
	above 100 kWp	54.00	51.30	48.74	46.30	43.99	39.58	35.23	30.65	29.73	25.86	21.98
	above 1000 kWp	54.00	51.30	48.74	46.30	43.99	33.00	29.37	25.55	24.79	21.56	18.33
Ground-mounted	conversion areas	45.70	43.40	40.60	37.96	35.49	31.94	28.43	26.16	25.37	22.07	18.76
	agricultural fields	45.70	43.40	40.60	37.96	35.49	31.94	28.43	—	—	—	—
	other	45.70	43.40	40.60	37.96	35.49	31.94	28.43	25.02	24.26	21.11	17.94
Installations on agricultural fields were removed under the PV Act (2010).

The support duration is 20 years plus the year of project commissioning, constant remuneration. Feed-in tariffs was lowered repeatedly (decreasing by 9% default and a maximum of 24% per year). Degression will be accelerated or slowed down by three percentage points for every 1000 MW_p/a divergence from the target of 3500 MW_p/a.

Progression of Solar PV FiTs since 2012

As of July 2014, feed-in tariffs for photovoltaic systems range from 12.88 ¢/kWh for small roof-top system, down to 8.92 ¢/kWh for large utility scaled solar parks. Also, FiTs are restricted to PV system with a maximum capacity of 10 MW_p. The feed-in tariff for solar PV is declining at a faster rate than for any other renewable technology.[14]

Feed-in tariffs for solar PV since April 2012 [¢/kWh][15]

Year	Month	Degression	Rooftop mounted				Ground mounted up to 10 MWp
			up to 10 kWp	up to 40 kWp	up to 1 MWp	up to 10 MWp
2012	April	—	19.50	18.50	16.50	13.50	13.50
	May	1.0%	19.31	18.32	16.34	13.37	13.37
	June		19.11	18.13	16.17	13.23	13.23
	July		18.92	17.95	16.01	13.10	13.10
	August		18.73	17.77	15.85	12.97	12.97
	September		18.54	17.59	15.69	12.84	12.84
	October		18.36	17.42	15.53	12.71	12.71
	November	2.5%	17.90	16.98	15.15	12.39	12.39
	December		17.45	16.56	14.77	12.08	12.08
2013	January		17.02	16.14	14.40	11.78	11.78
	February	2.2%	16.64	15.79	14.08	11.52	11.52
	March		16.28	15.44	13.77	11.27	11.27
	April		15.92	15.10	13.47	11.02	11.02
	May	1.8%	15.63	14.83	13.23	10.82	10.82
	June		15.35	14.56	12.99	10.63	10.63
	July		15.07	14.30	12.75	10.44	10.44
	August	1.8%	14.80	14.04	12.52	10.25	10.25
	September		14.54	13.79	12.30	10.06	10.06
	October		14.27	13.54	12.08	9.88	9.88
	November	1.4%	14.07	13.35	11.91	9.74	9.74
	December		13.88	13.17	11.74	9.61	9.61
2014	January		13.68	12.98	11.58	9.47	9.47
	February	1.0%	13.55	12.85	11.46	9.38	9.38
	March		13.41	12.72	11.35	9.28	9.28
	April		13.28	12.60	11.23	9.19	9.19
	May		13.14	12.47	11.12	9.10	9.10
	June		13.01	12.34	11.01	9.01	9.01
	July		12.88	12.22	10.90	8.92	8.92
Maximum remuneration part[16]			100%	90%	90%	100%	100%

Renewable Energy Sources Act (2014)

Main article: German Renewable Energy Sources Act

On 1 August 2014, a revised Renewable Energy Sources Act entered into force. Specific deployment corridors now stipulate the extent to which renewable energy is to be expanded in the future and the funding rates (feed-in tariffs) gradually will no longer be fixed by the government, but will be determined by auction. Wind and solar power are to be targeted over hydro, gas (landfill gas, sewage gas, and mine gas), geothermal, and biomass. In late 2015, this new scheme is being tested, as a pilot project, for ground-mounted PV installations.[4] With the Renewable Energy Sources Act (2017), auctions will become commonplace for new installations also for most other types of renewables.

See also

• Energiewende in Germany
• German Renewable Energy Sources Act, also known as the EEG

References

1. "Annual Report 2014". International Energy Agency – Photovoltaic Power Systems Programme (IEA-PVPS). 21 May 2015.
2. Policymaker's Guide to Feed-in Tariff Policies, U.S. National Renewable Energy Lab, www.nrel.gov/docs/fy10osti/44849.pdf
3. German Energy Blog German Feed-in Tariffs 2014 (01-07) Archived 2017-07-03 at the Wayback Machine
4. Making a success of the energy transition: on the road to a secure, clean and affordable energy supply (PDF). Berlin, Germany: Federal Ministry for Economic Affairs and Energy (BMWi). September 2015. Retrieved 2016-06-17.
5. HM Treasury (2006). Stern Review on the Economics of Climate Change Archived October 24, 2007, at the Wayback Machine p. 367.
6. German Energy Blog BDEW: Renewables Account for Record 28.5% of Gross German Electricity Consumption in First Half of 2014, BDEW, Erneuerbare Energien erreichen neuen Rekordwert
7. German Energy Blog Some More Figures on German EEG Renewables Generation, Revenues, Surcharge, Payments, and the Special Equalisation Scheme
8. German Energy Blog German Renewables Surcharge Increases by 19% to 6.24 ¢/kWh in 2014
9. Facts about solar PV (in German), pages 29-30
10. EEG 2009 modifications Bundesverband Solarwirtschaft. 2 Feb 2011.
11. EEG 2010 modifications Archived 2011-08-15 at the Wayback Machine Bundesverband Solarwirtschaft. 2 Feb 2011.
12. EEG 2011 modifications Archived 2011-08-15 at the Wayback Machine Bundesverband Solarwirtschaft. 2 Feb 2011.
13. "Feed-in tariffs by category since 2009". www.netztransparenz.de (in German). Netztransparenz. Retrieved 2018-05-02.
14. Facts about solar PV (in German)
15. "Photovoltaikanlagen: Datenmeldungen sowie EEG-Vergütungssätze" [Monthly reported new installations of PV systems and current feed-in tariffs of the German Renewable Energy Act] (in German). Bundesnetzagentur. Retrieved 1 February 2015.
16. Germany: feed-in tariffs 2013 (PDF). Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). Archived from the original (PDF) on 2014-03-27.