From pv magazine Germany.
The easing of Covid-19 lockdown restrictions in Germany helped the addition of almost 121.4 MW of new large scale solar generation capacity in May, with 33 ground-mounted projects coming online, according to the latest monthly figures published by federal network agency the Bundesnetzagentur.
Those big solar facilities were part of a year high of more than 446 MW of new solar added in Germany during the month, for almost 1,926 MW this year.
May’s bumper return might have been boosted by solar owners skeptical of a German government pledge, made last year, to remove legislation halting public subsidies for systems with a generation capacity of up to 750 kW once a capacity limit of 52 GW was reached. As a result, private and commercial rooftop systems scrambling to beat any imposition of the cap were the main driver of the market in May – no fewer than 321 MW of the 446 MW of new capacity was accounted for by subsidized rooftop systems.
Ultimately, Germany reached a cumulative 50.88 GW of such subsidized capacity by the end of May, according to the Bundesnetzagentur, and the Bundestag lower house of parliament this month finally removed the solar cap as part of a Building Energy Act which is due to be considered by the Bundesrat upper house next week.
The subsidy will reduce by another 1.4% from tomorrow as its level is geared to new capacity additions.
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For the nth time, the FIT – which is what is being reduced – is not a subsidy. If includes a subsidy element, otherwise investors would prefer to take their chances on the market. The trouble is that since there is no free market in retail electricity, there is no benchmark with which to compare the solar FIT, and therefore no way of calculating the subsidy element. All you can say is that at around 10c per Kwh, any remaining subsidy is small, once you account for avoided distribution costs.
Hi James,
I am happy to bow to your knowledge of the German electricity market but I understand the money paid for electricity generated by feed-in tariff-financed projects comes from public funds. That fits, if you’ll pardon the pun, my definition of a subsidy.
Max: no it isn’t. The state budget pays for the armed forces, state pensions and universities. These are run directly, not subsidised. The budget also includes the purchase of tanks, fighters and pharmaceuticals from private profit-making companies. That’s not a subsidy either. A subsidy has to involve a transaction at non-market prices, and its metric is the difference from a fair market price, as I wrote. The IMF has started to count the unpaid externalities of fossil fuels as subsidies, in its reports to G-X meetings. Politicians don’t like this, but so far the IMF experts are standing by their sound professional decision.
An example from Spain that IMHO proves my point. Since the RIbera reform,s Spanish solar households are guaranteed payment at the wholesale rate for surplus electricity they feed to the grid. This is an FIT; it’s established by law and the utilities can’t pay less, as they would in an unregulated market, given their monopoly power. Equally clearly, this price is not a subsidy to consumers. Indeed it’s the other way round, and the arrangement modestly subsidises utilities and the grid operator. Distributed solar imposes some administrative and technical burdens on these, far outweighed by the savings in distribution upgrades and the gain in system reliability from large numbers of independent small generators. The firming costs are the same as for utility solar farms, and in Spain, with a peak load driven by summer daytime air conditioning, these are presumably quite modest.