Feed-in tariffs in Germany

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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.[1] 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).[2] 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.[3]

In 2011, 20% of electricity in Germany came from renewable sources BDEW breakdown of electricity production by source 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).[3] 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.[4] 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.[5] This is compared to 17.1% in the first quarter of 2010, an increase of 2.1%.

There are about 340,000 people working in the renewable energy sector in Germany,[6] which has an industry turnover of €8.7 billion.[3]


  1. ^ Policymaker's Guide to Feed-in Tariff Policies, U.S. National Renewable Energy Lab, www.nrel.gov/docs/fy10osti/44849.pdf
  2. ^ German Energy Blog German Feed-in Tariffs 2012
  3. ^ a b c HM Treasury (2006). Stern Review on the Economics of Climate Change p. 367.
  4. ^ German Energy Blog 2012 EEG Surcharge Increases Slightly to 3.592 ct/kWh
  5. ^ Böhne, D. "Development of Renewable Energy Sources in Germany". Development of Renewable Energy Sources in Germany. Retrieved 19 July 2011. 
  6. ^ Berliner Zeitung