Feed-in tariffs in Germany
Feed-in electricity tariffs have been 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 a fee (a "tariff") above the retail rate of electricity. The mechanism provides long-term contracts to renewable energy producers, typically based on the cost of generation of each technology. 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 February 2012, feed-in tariffs range from 3.4 ct/kWh (4.5 ¢/kWh) for hydropower facilities over 50 MW to 24.43 ct/kWh (32 ¢/kWh) for solar installations on buildings up to 30 kW. In 2012, the tariff for new solar installations dropped to 18.36 ct/kWh (24 ¢/kWh). The aim is to meet Germany’s renewable energy goals of 12.5% of electricity consumption in 2010 and 35% in 2020. The policy also aims to encourage the development of renewable technologies, reduce external costs, and increase security of energy supply.
In 2011, 20% of electricity in Germany came from renewable sources and 70% of this was supported with feed-in tariffs. The Federal Environment Ministry estimates that this will save 87 million tonnes of carbon dioxide by 2012. The average level of feed-in tariff was €0.0953 per kWh in 2005 (compared to an average cost of displaced energy of €0.047 kWh). The total level of subsidy was €2.4 billion, at a cost per consumer of €0.0056 per kWh (3 per cent of household electricity costs). The tariffs are lowered every year to encourage more efficient production of renewable energy. By 2012, the EEG surcharge - which pays for the additional costs through feed-in tariffs - had increased to 3.592 ct/kWh. As of 2008, the annual reductions were 1.5% for electricity from wind, 5% for electricity from photovoltaics, and 1% for electricity from biomass. In the first quarter of 2011, 19.2% of Germany's electricity was produced by renewable sources. This is compared to 17.1% in the first quarter of 2010, an increase of 2.1%.
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 estimates, that only about 30 percent 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.
Progression of FiTs since 2012
As of July 2014, feed-in tariffs for photovoltaic systems range from 12.88 euro cents per kWh for small roof-top system, down to 8.92 euro cents per kWh for large utility scaled solar parks. Also, FiTs are restricted to PV system with a maximum capacity of 10 megawatts (MW). The feed-in tariff for solar PV is declining at a faster rate than for any other renewable technology.
|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|
|Maximum remuneration part||100%||90%||90%||100%||100%|
Progression of FiTs before 2012
The feed-in tariff, in force since 1 August 2004, was modified in 2008. In view of the unexpectedly high growth rates, the depreciation was accelerated and a new category (>1000 kWp) 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. The most recent 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.
|type||2004||2005||2006||2007||2008||2009||2010||Jul 2010||Oct 2010||2011|
|Rooftop mounted||up to 30 kW||57,4||54,53||51,80||49,21||46,75||43,01||39,14||34,05||33,03||28,74|
|between 30 kW and 100 kW||54,6||51,87||49,28||46,82||44,48||40,91||37,23||32,39||31,42||27,33|
|above 100 kW||54,0||51,30||48,74||46,30||43,99||39,58||35,23||30,65||29,73||25,86|
|above 1000 kW||54,0||51,30||48,74||46,30||43,99||33,00||29,37||25,55||24,79||21,56|
|Ground mounted||conversion areas||45,7||43,4||40,6||37,96||35,49||31,94||28,43||26,16||25,37||22,07|
Contract duration 20 years, constant remuneration. Feed-in tariffs will be lower in value in future years (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 MWp/a divergence from the target of 3500 MWp/a.
- Policymaker's Guide to Feed-in Tariff Policies, U.S. National Renewable Energy Lab, www.nrel.gov/docs/fy10osti/44849.pdf
- German Energy Blog German Feed-in Tariffs 2012
- HM Treasury (2006). Stern Review on the Economics of Climate Change p. 367.
- "Electricity Generation by Source in 2011" (PDF) (in German). BDEW Bundesverband der Energie- und Wasserwirtschaft. 2011. Archived from the original on 25 July 2014. Retrieved 25 July 2014.
- German Energy Blog 2012 EEG Surcharge Increases Slightly to 3.592 ct/kWh
- Böhne, D. "Development of Renewable Energy Sources in Germany". Development of Renewable Energy Sources in Germany. Retrieved 19 July 2011.
- Facts about solar PV (in German), pages 29-30
- Facts about solar PV (in German)
- Bundesnetzagentur downloadable spread sheet of feed-in tariffs
- BMU: Germany: Feed-in tariffs 2013
- EEG 2009 modifications Bundesverband Solarwirtschaft. 2 Feb 2011.
- EEG 2010 modifications Bundesverband Solarwirtschaft. 2 Feb 2011.
- EEG 2011 modifications Bundesverband Solarwirtschaft. 2 Feb 2011.