Solar Energy Policies in Germany


Table 3: Development of Feed-in Tariffs in the Solar Energy Sector 2009


2010


31.94–43.01 € ct/kWh depending on energy source and system size


28.43–39.14 € ct/KWh depending on energy source and system size


Since 1 October 2010 25.02–34.05 € ct/KWh depending on energy source and system size


Since 1 January 2011 21.11–28.74 € ct/KWh depending on energy source and system size


Since 1 July 2011 Further reduction of about 0–15 %


In the case of personal consumption, the reimbursement rate is calculated with a 30 % deduction. € ct/kWh = Euro cents per kilowatt hour.


Therefore, environment, climate change and sustainability have become priority funding issues within the innovation strategy of the German Federal Government.”15


To sum up, the energy policy based on renewables might be judged as a success story. It was supported by massive public intervention, mainly through feed-in tariffs and payment under the Electricity Feed Act 1991 (Strom EinspG) and the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz [EEG]) of 2000 and 2004.


The market for solar power (thermal collectors and solar photovoltaic) has experienced vigorous growth in Germany.


Supportive State and Local Regulations


Without encouraging consumers and companies with various government subsidies, solar installations would not be able to compete with fossil energy sources, even in periods of relatively high prices for oil and gas. Therefore, to boost the spread of green technology, the German government has created conditions under which market forces can meet their desirable targets in terms of economic profits. Thus, in Germany, the generation of electricity from renewable sources is mainly promoted through price-regulation in terms of guaranteed feed-in tariffs (see Table 3). For some technologies, there are several different tariffs, depending on system capacity, system location, technology and the energy source used. The more efficient the respective technology is, the more closely the fees will reflect the market prices.


The EEG provides a high degree of planning and investment security for photovoltaic installations due to fixed tariffs over a period of 20 years. Different tariffs apply depending on the size of the installations and whether they are roof-mounted or free-standing. Feed-in tariffs for solar photovoltaic have been comparably high. At the same time its annual degression rate is also much higher than that of other renewable sources. The degression rate is intended to account for lower costs as production volumes increase and the technology improves.


In addition to financial support, the EEG has enabled renewable energy installations to have guaranteed priority grid access, transmission and distribution and grid operators have to purchase the electricity produced by the renewable energy producers.16


16


Moreover, the Renewable Energies Heat Act came into force on 1 January, 2009, introducing an obligation to use renewable energies for heat supply in new buildings. Solar energy can also be used for this, for example, by using the building's own solar collectors or by purchasing district heating in combination with a centralised large-scale solar heating system. Both small- and large-scale solar heating systems are supported by the Market Incentive Programme, which offers a subsidy of €135 per m2 of collectors. The total amount of the subsidy accounts for nearly 15 % of the investment.


In addition to the supportive legal frameworks and subsidies provided by the federal state, there are several towns that have become front runners in their use of solar energy. One noticeable example is the 'solar city' of Freiburg, which has solar installations far above the average. The city has developed numerous significant projects that use every kind of solar application – solar photovoltaic (over 400 photovoltaic installations), solar thermal (for hot water), solar sunrooms or 'winter gardens', passive solar design, solar cooling and transparent solar insulation, which converts the solar heat. There is a support programme for home heat insulation and energy efficiency retrofits, and all new houses built on city land must meet a new low-energy efficiency design standard that uses two-thirds of the legally permitted limit. The houses cost


about 3 % more to build, but their energy costs and CO2 emissions fall by 30 %.17


Following the supportive policies for renewable energy there has been debate about the role of feed-in tariffs. Most environmenta lists support the system because it can increase renewable capacity. Others complain that feed-in tariffs only encourage micro-generation instead of massively reducing greenhouse gas emissions by large-scale installations or improving energy efficiency.18


Last but


not least, public opinion is confronted with different calculations of costs for solar energy in comparison with other energy sources, stressing the argument that renewables are too expensive. Some of these calculations should be questioned because they neglect costs such as public subsidies for R&D, for security, for waste deposits and costs of pollution, most of which are externalised. In addition, the companies running nuclear power plants did not contract adequate assurance against risks or catastrophes.


Despite these opposing arguments there is widespread public support in Germany to fight global warming and to increase energy independence by developing renewable energy sources. It is nevertheless sometimes difficult to implement sustainable energy policies. One of the reasons for this are the four major energy suppliers (RWE, Vattenfall Europe, E.ON and ENBW), control 80 % of the German energy market. A new Greenpeace study on their planning indicates that none of them will achieve the 2020 target of a 35 % share of electricity from renewables. Instead, they will rely further on power generation from fossil fuels and from nuclear energy. With regard to renewables, they are only increasing their investments in wind energy installations. Decentralised renewable energy technologies and smaller plant sizes – like in the past – play no role in the planning of the major four.19


In addition, they were the


primary lobby urging politicians to enlarge and prolong the use of nuclear power.


MODERN ENERGY REVIEW – VOLUME 3 ISSUE 2


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