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Germany Upholds Groundbreaking Renewable Energy Law

By Paul Gipe, Contributing Writer
July 6, 2007 | 13 Comments

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Germany's Ministry for the Environment has issued revised rules for the country's groundbreaking Renewable Energy Sources Act. The new rules significantly increase the tariffs for offshore wind energy, hydroelectricity and geothermal energy beginning in 2009.

For rooftop solar PV, the Ministry of Environment said it would raise the annual degression from the current 5% to 7% per year beginning in (2009) and to 8% beginning in 2011. The revised program will add a new tariff class for systems >1,000 kW of Euro 0.3548/kWh ($0.47/kWh). The current tariff is Euro 0.463 ($0.62/kWh) for systems >100 kW.

Most significantly, Germany, with the most aggressive renewable energy targets in the world, has increased those targets yet again. The Ministry of Environment announced that the targets for 2020 had increased to 27% from the previous 20% and had added a target of 45% by 2030. Previously, Germany had set a renewable target of 50% of total energy consumption by 2050.

The Ministry's report announced that tariffs for hydroelectricity will be raised to € 0.1267/kWh [US$ 0.17/kWh] for <500 kW, to € 0.0865/kWh [US$ 0.12/kWh] for >500 kW<2,000 kW, to € 0.0765/kWh [US$ 0.10/kWh) for >2,000 kW<5,000 kW.

For geothermal, the new rules reduce the number of size classes from four to two and increases the tariff from € 0.15/kWh [US$ 0.20/kWh) to € 0.17/kWh [US$ 0.23/kWh]. The new rules also add a bonus of Euro 0.03/kWh [US $ 0.04/kWh] for geothermal used in heating.

For wind on land, which has been hard hit by rising turbine prices, the new rules reduce the annual tariff degression from 2% to 1% per year. Germany will now also pay a bonus of € 0.007/kWh [US$ 0.01/kWh] for wind turbines that are more compatible with the needs of the grid.

For wind off shore, the program raises tariffs from Euro 0.0874/kWh [US$ 0.12/kWh] in 2009 to Euro 0.11-0.14/kWh [US$ 0.15-0.19/kWh].

For rooftop solar PV, the Ministry of Environment said it would raise the annual degression from the current 5% to 7% per year beginning in (2009) and to 8% beginning in 2011. The revised program will add a new tariff class for systems >1,000 kW of € 0.3548/kWh [US$ 0.47/kWh]. The current tariff is € 0.463 [US$ 0.62/kWh] for systems >100 kW.

For solar PV systems <30 kW the current tariff is Euro 0.49/kWh [US$ 0.66/kWh]. For solar PV cladding <30 kW the current tariff is Euro 0.54/kWh [US$ 0.72/kWh].

For ground-mounted solar PV, the annual degression will be raised from 6.5% to 8.5% beginning in 2009 and to 9.5% beginning in 2011.

Germany is governed by a grand coalition of the Christian Democrats and the Social Democrats. Perpetuation of Germany's renewable energy law was an integral part of the coalition contract between the two political parties.

Germany's Renewable Energy Sources Act is reviewed every three years.

Paul Gipe is a wind industry analyst who has written extensively about wind energy for both the popular and trade press.

Additional Information

The rules and findings of parliamentary discussions (in German)

Bioenergy, Geothermal Energy, Solar Energy, Wind Power

13 Reader Comments

Comment
1 of 13

jim-berry-51310

July 6, 2007

It is note worthy that Solar is getting the lion share of the subsidies ("tariffs"). Sometime s at a 4 to 1 ratio  versus wind.Germany has got the solar bug. I am glad to hear that they are putting in all these solar systems. With all the new and more powerful PV systems supposedly just around the corner, its nice to see Germany get stuck with old technology that is less efficient.  Maybe we could sell their schools some old 486 based computers too.I truly dislike the German's attitude on Green energy. The German's consider Americans to be stupid and ignorant because we aren't into too over-paying for Green energies.They think Americans aredumb because we don't want to pay 4 to 6 times the going rate for electricity. Worse yet, the obnious people feel a need to voice their opinions and I am too polite to laugh in their faces. Manners can be a disadvantage. It would be truly great if the Solar Industries  clam of high efficient panels come true in two or three years, just after Germany plunked Billions into old systems.

Comment
2 of 13

chris-podwoski-68560

July 8, 2007

Degression is the percentage reduction in the  tariff in upcoming years.  It  serves to reduce the  tariff to compensate for expected  future  price reductions in the capital cost of the RE asset.

Comment
3 of 13

robert-r-holt-35304

July 8, 2007

An interesting article made difficult to follow by your using an undefined neologism, "degression." Perhaps it means "reduction," but I can't tell. Foisting jargon on the public like this is a deplorable, almost inexcusable practice. Its implicit message is, "for insiders only."

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4 of 13

michael-mora-68627

July 9, 2007

Germany's investment in  PV  also includes an investment in the next generation of technicians and engineers who will design, install and maintain systems.  The current employees in their industry pay taxes which support their generous health and social programs.  The cost to German society is a pittance compared to the benefit.  I wish our government was capable of that kind of  thinking.  Remember too, that vast amounts of money have been invested by our military in training technicians for push button warefare.  The military is not known for efficient use of money.  Some of those same technicians in civilian life are now in renewable energy jobs and other socially useful and productive endeavors for the common good.

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jim-berry-51310

July 10, 2007

"The military is not known for efficient use of money"  Exactly what government program is known for efficiency???  The military may actually be one of the more efficient government agencies. Yes they waste a lot, but most government programs waste so much more that the military isn't really that bad.I am quite familiar with govn't houing and social benefit programs, which carry levels of fraud and waste that are astounding In regards to the German programs, they are glorified jobs programs and corporate welfare. They are paying $.45 per kwh for $.08 to $.10 worth of electricity.  The Germans aren't getting any benefit out of those Solar Programs. The air is dirty than before on a world scale, it is having only a symbolic effect on green house gasses.  They are no less dependant on foriegn oil, since they could have used domestic coal to make the same power.  The projects are a net drain on the government treasury regardless of any taxes paid. Let the Germans have their current generation of overpriced, wasteful, ineffiecent PV systems - they deserve it.

Comment
6 of 13

diane-moss-68731

July 11, 2007

Ack. HTML is giving me a hard time. The quote...One More Time is
"The Germans aren't getting any benefit out of those Solar Programs."

Comment
7 of 13

diane-moss-68731

July 11, 2007

Sorry. In my comment above (Comment 10) , which has an empty quote by Jim Berry, there was a computer glitch. The quote was to read <<The Germans aren't getting any benefit out of those Solar Programs.>>

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8 of 13

diane-moss-68731

July 11, 2007

<< The projects are a net drain on the government treasury regardless of any taxes paid.>>

This is a misconception. There are no government subsidies in Germany presently for renewable energies. No one is paying any taxes for renewables in Germany. The Renewable Sources Act is a feed-in tariff. which is not a tax but a set amount that producers of ren. energy--whether it be my retired in-laws or a large wind farm--are guaranteed to be paid at fixed rates by the energy companies that own the grid for the they feed back into the grid. The rates are differemt for different sources (e.g.solar, wind, biomass, etc.) based on what is required to even the playing field for each source with respect to conventional energies. Wind can generate more electricity in proportion to the cost of the equipment than can PV solar at this point. Therefore, to even the playing field wind energy producers for now get less money per kwh than do PV solar energy producers.

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9 of 13

diane-moss-68731

July 11, 2007

Jim Berry writes: <<The Germans aren't getting any benefit out of those Solar Programs. >>

That is not true. There are many people who are making money selling renewables back to the grid, which are only able to do so because of this law which guarantees that even small producers such as individuals can sell energy back to the grid.

Also, it seems that Mr. Berry may be implying that R. Energy in the grid has raised energy bills in Germany. True--by 1 whole buck a month. Though this year, there was so much wind in the mix that elec. costs went down to zero for a spell. And electricity generated by renewables will to get cheaper as these technologies become more widespread and efficient.

Comment
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thomas-prendergast-68225

July 11, 2007

The comments about the need for more green energy is right on the button. I have heard many people in our nation say that we are 20 to 30 years away from the needed use of these technologies to prevent more damage to our planet. We all forget that we can not work in the old manor and be successful. That is when the government figures out how to tax it and the polititions can get their hands in the pot we may see some progress. I would like to see a closeness among the communities of the world to bring about what we all know could be accomplished in a very short time if we all remember that it is not a matter of if we are in trouble but when we will hit that point of no return. We should be co-operating like time will run out in 14 days. Man is great and shows greatness when they co-operaate to a common good. What we need is a total committment! " NOW".

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mark-capellaro-68691

July 11, 2007

As a US citizen living in Germany, I can tell you there are lots more reasons they think American are stupid and ignorant. The inability to count votes is up there. Green energy is big here because 80 million Germans live in a small area. They have to clean up. But in doing so they have created an vast productive system that produces high paying jobs in engineering and manufacturing. They export products and earn billions for Germany. This is a much better employment policy than periodically invading unarmed middle eastern countries. By the way, I pay 25euro cents per kWh for wind and hydro power , not the 45euro cents misquoted above.  And if they jumped the gun on solar panels, the lessons learned from the levels of production in Germany will ensure that the next generation of solar cells will be created here! The simple fact that the Europeans have elevated themselves above the petty 'me first' attitude of Americans and put the good of the planet first. This scares America. They can't seem to fathom how one puts the greater good ahead of corporate profit. Haven't you guys seen the Star Trek movie where Spock sacrifices himself?

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12 of 13

bill-ramsey-47603

July 11, 2007

There will always be the promise of new technology tomorrow, but to refuse to do anything in the present is to simply do nothing.  Using that computer analogy, even though 486 is yesterday, not today; what would you replace it with when tomorrow promises to bring even newer technology?  Would you just sit around forever without a computer for fear that whatever you bought would soon be eclipsed by tomorrow's products?  It is a sign of true intelligence that the Germans recognize that preparing for tomorrow requires action today.

Comment
13 of 13

gordon-mills-58583

July 11, 2007

Germany has set itself up as a barometer for the rest of the world to judge their own endeavours as they traverse the long green road:Depending on the results of Germany's brave push for cleaner power, For most countries it will either be catch up, or it will be a huge sigh of relief that they did not follow Germany's example:Which ever way it pans out, we all should congratulate Germany for at least "TRYING" by putting its money where its mouth is, and showing us how it should be done, or how it should not be done:  Germany has never been my favourite country but I have to give credit where it is due so good luck to them:

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