Feed-in tariffs in Germany

{{further|Feed-in tariff|Financial incentives for photovoltaics}}

{{short description|Overview of feed-in tariffs in Germany}}

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|caption = Development of feed-in tariffs for small rooftop PV systems smaller than 10 kW_p capacity since 2001 in ¢/kWh{{cite web |publisher=International Energy Agency – Photovoltaic Power Systems Programme (IEA-PVPS) |url=http://www.iea-pvps.org/index.php?id=6 |title=Annual Report 2014 |date=21 May 2015}}{{rp|62}}

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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.Policymaker's Guide to Feed-in Tariff Policies, U.S. National Renewable Energy Lab, www.nrel.gov/docs/fy10osti/44849.pdf 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.

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{{nbsp}}kW_p and 19 ¢/kWh (25.5 ¢/kWh) for offshore wind.German Energy Blog [http://www.germanenergyblog.de/?page_id=16376 German Feed-in Tariffs 2014 (01-07)] {{Webarchive|url=https://web.archive.org/web/20170703041824/http://www.germanenergyblog.de/?page_id=16376 |date=2017-07-03 }}

On 1 August 2014, a revised Renewable Energy Sources Act or EEG (2014) (colloquially called EEG{{nbsp}}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.

{{cite book

| title = Making a success of the energy transition: on the road to a secure, clean and affordable energy supply

| date = September 2015

| publisher = Federal Ministry for Economic Affairs and Energy (BMWi)

| place = Berlin, Germany

| url = http://www.bmwi.de/English/Redaktion/Pdf/making-a-success-of-the-energy-transition,property=pdf,bereich=bmwi2012,sprache=en,rwb=true.pdf

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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.HM Treasury (2006). [http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/stern_review_report.cfm Stern Review on the Economics of Climate Change] {{webarchive |url=https://web.archive.org/web/20071024003134/http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/stern_review_report.cfm |date=October 24, 2007 }} p. 367.

In the first half of 2014, 28.5% of gross electricity production in Germany came from renewable sources.German Energy Blog [http://www.germanenergyblog.de/?page_id=16368 BDEW: Renewables Account for Record 28.5% of Gross German Electricity Consumption in First Half of 2014], BDEW, [http://www.bdew.de/internet.nsf/id/20140729-pi-erneuerbare-energien-erreichen-neuen-rekordwert-de] {{Webarchive|url=https://web.archive.org/web/20140729230859/http://www.bdew.de/internet.nsf/id/20140729-pi-erneuerbare-energien-erreichen-neuen-rekordwert-de|date=2014-07-29}} Erneuerbare Energien erreichen neuen Rekordwert 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). By 2013, the figure had risen to €20.4 billion.German Energy Blog [http://www.germanenergyblog.de/?p=15053 Some More Figures on German EEG Renewables Generation, Revenues, Surcharge, Payments, and the Special Equalisation Scheme ] 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.German Energy Blog [http://www.germanenergyblog.de/?p=14559 German Renewables Surcharge Increases by 19% to 6.24 ¢/kWh in 2014 ] 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.[http://www.ise.fraunhofer.de/de/veroeffentlichungen/veroeffentlichungen-pdf-dateien/studien-und-konzeptpapiere/aktuelle-fakten-zur-photovoltaik-in-deutschland.pdf Facts about solar PV (in German), pages 29-30 ]