Germany’s efforts towards renewables were further spurred by the fossil fuel crisis in the aftermath of Russia’s Ukraine invasion. There is a strong push on the policy side too The draft “Easter Package,” released in July 2022, includes proposed reforms to the Renewable Energy Act (EEG), amendments to energy industry law, and measures to expedite power transmission grid development. It also aims to increase tender volumes for wind and solar projects and introduce contracts for difference (CfD The adoption of EEG 2023 incorporates several provisions to facilitate faster deployment of solar energy. The adoption of EEG 2023 incorporates several provisions to facilitate faster deployment of solar energy. For instance, it encourages full rooftop utilization for solar PV by allowing rooftop PV system owners to choose a smaller feed-in tariff while using some of their rooftop-generated power themselves or receiving additional remuneration on top of the standard feed-in tariff if they feed in 100% of their rooftop power. Households that decide to export all solar electricity to the grid will receive the full feed-in bonus of €0.048/kWh, raising total remuneration to €0.134/kWh.
The amended remuneration scheme has been particularly attractive to the investors with little or no self-consumption needs and in turn encourages them to have maximum usage of available roof space. The law also revoked the limitation to sell electricity to the grid for mid-size rooftop PV systems, implemented by the earlier government. The new government also presented a new package that included an increase in solar capacity, to be allocated through tenders, and the mandatory installation of PV systems in all commercial buildings. The solar obligation for commercial buildings stems from several German states deciding to require solar installations for new buildings. As of 1 January 2022, North Rhine-Westphalia (NRW) and Baden- Württemberg are the first two German states to implement a solar-PV obligation for certain construction projects. The states of Berlin, Hamburg, Rhineland-Palatinate, Bavaria, Schleswig-Holstein, and Lower Saxony have adopted similar laws introducing the solar PV obligation from 2023 onwards.
Support in terms of tax benefits for small-scale solar is also in place. For example, under the Annual tax Act 2022, operators of PV systems with an output of up to 30KW on a single-family home or commercial property will no longer have to pay income tax on the electricity yield from the beginning of 2023. This tax exemption also applies to multi-family houses and mixed-use properties owning a PV system with an output of 15kW. In addition, the value-added tax (VAT) will no longer be due on the purchase, import, and installation of PV systems and energy storage systems.
Germany’s Federal Network Agency “Bundesnetzagentur” has increased the price caps for the auctions for onshore wind and solar energy in 2023 in an effort to make renewable energy tenders more attractive and draw stronger interest following the sharp drop in bids observed in 2022. As a result, the country’s first solar auction of 2023 was oversubscribed with 347 bids, totalling 2.87GW submitted for a tendering quantity of 1.95GW of ground mounted and non-building solar systems.
