Germany Sparks Opportunity for US Exporters of Renewable Energy

With a GDP accounting for more than one-fifth of the European Union, and the fourth-largest economy in the world, Germany offers solid opportunities for U.S. exporters. As U.S. companies look to Germany as a base from which to build their European and worldwide strategies, this article highlights one of its most dynamic sectors, the growth of renewable energy.

Now is an ideal time for U.S. companies to focus on exporting to the European Union and in particular, Germany’s renewable energy sector. The major impetus is that Germany plans to shut down ALL its nuclear power plants by 2022, making it vital for the country to increase its share of energy produced from renewables. To achieve the goal of the non-nuclear energy initiative, fixed feed-in-tariffs and grid priority for renewable energy sources were established. In 2014, renewables for the first time replaced lignite as the top source of power, accounting for 27.3 percent of domestic power production. The legislation behind that change, the Renewable Energy Sources Act, is a very German approach to country-wide challenges: strong governmental support leads to strong growth in all renewable energies.

Key Renewable Energy Sectors in Germany  

Germany’s energy grid has a strong need for modernization, extension and storage technologies. For example, it is estimated that by 2025, 28 GW of storage capacity will be needed for energy storage and fuel cells, up from the present 7 percent. In 2013, fuel cell technology sales exceeded $137 million and are expected to reach $2.7 billion by 2020 with investments of $34-$41 billion expected by 2030. Another key sector is smart grid technology, with German distribution grids requiring an expansion from 83,885 miles up to 119,925 miles. Investment needs for grid extension and modernization until 2020 are expected to be: EUR 18.4-26.7 billion; until 2030: EUR 27.5 — 42.5 billion.

Other hot opportunities in the German market include:

  • Power to Gas Technologies
  • Fuel cell heating appliances (fuel cells supplying the home with electricity and heat)(Half of the primary energy required for household supply can be saved this way — about 30 percent of the primary energy demand in Europe comes from residential buildings)
  • Hydrogen production via the highly efficient water electrolysis method
  • The alternative PEM electrolysis method is significantly gaining in importance
  • Hydrogen produced from biomass and as a by-product of industrial processes

Appealing to Germany’s Renewables Market

U.S. businesses will find prior export experience beneficial when selling to Germany since that country is a highly regulated and developed market with a lot of competition. Germans value products and solutions that have been tested in other applications or markets. U.S. high-tech products typically enjoy a good reputation in Germany where consumers have become more price-conscious, especially in the area of consumer goods. Consequently, price is becoming increasingly important as a competitive factor, but high-tech solutions, quality, timely delivery and service remain equally so, especially in B2B relations. After-sales service and customer support are always a top concern in Germany. The German commercial customer expects to be able to pick up the telephone, talk to his or her dealer, and have replacement parts or service immediately available.

U.S. businesses should also be aware about the advantages of utilizing an e-commerce platform when doing business in Germany. Most renewable energy products can be bought online, and there are numerous online shops for photovoltaic, wind power and energy storage supplies and services in Germany, both for B2B and B2C. Some of them are specialized in renewable energies; others provide products across all industry sectors.

Examples of buying portals include the following:

Finding a Local Partner in Germany

To enter the German market, a U.S. exporter would be best advised to find a local partner who has the necessary contacts and a good understanding of local procurement practices. There are numerous ways to enter the market, but much depends on the type of product or desired type of relationship to R&D projects, joint ventures, distributors, wholesalers or direct sales for end-users. Also, U.S. companies need to observe and pay special attention to conformity, technical and safety standards: Our U.S. Commercial Service colleagues at the U.S. Mission to the European Union (EU) in Brussels supports exporters with firsthand information on regulations and standards, as well as EU funding programs.

Many U.S. businesses looking to export start out by contacting their nearest U.S. Commercial Service office in the United States or locations at U.S. Embassies and Consulates worldwide. This seamless network of assistance helps U.S. companies identify a range of export-related needs and interests, including insight into the market opportunities and foreign partners which might be the most suitable match for the U.S. company. Our “boots-on-the-ground” expertise here in Germany helps make those recommendations. In order to find German partners, we conduct a search to identify potential prospects, followed by screening and pre-selection after which we contact them personally and collect feedback.

We keep the U.S. client and our U.S. Commercial Service colleagues in the United States in the loop during the entire outreach process, providing feedback on the final results. The U.S. client can either contact the partners on the list directly, or we can set up one-on-one business matchmaking meetings through our Gold Key Service. Much of the same matchmaking process is undertaken for U.S. trade missions and other events. Also, from my experience, there is sometimes a perception among U.S. companies that the decision-making process in the German business environment can be somewhat longer than in the United States. This might be true to an extent, but not nearly as much as is sometimes believed.

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Key Resources on Germany’s Renewables Market

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Lead image: Import/Export signs. Credit: Shutterstock.                                                                                                                                                                                                                                                                                                                                                                    

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Sabrina Leipold is an International Trade Specialist with the U.S. Embassy in Berlin. She is part of the global network of U.S. Commercial Service trade professionals in more than 100 U.S. cities and over 75 countries that help U.S. companies export.

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