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Germany is learning to manage its solar growth, with some growing pains. Over the years, the German government has sharply reduced residential feed-in tariffs (FITs), which initially spurred rooftop solar installations at a pace beyond what German power grids and energy markets can accommodate.
Marcel Muenz commented: “In the past, the main driver of Germany’s significant residential solar growth was that it was an economically feasible way that everyone could invest in renewable energy. Small utilities aggressively promoted it. Now, the economics behind solar investments have become more difficult.”
Marcel added: “For Germany’s energy market, this shift is good overall. It brings costs down -- even, over time, for residential customers. Germany had to move away from high subsidies. Of course, there will be winners and losers.”
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Specifically commenting on FIT, Marcel said: “Many people campaigned against the FIT because they saw the reallocation charge on their monthly electricity bill.”
Marcel added: “It used to be that you could just build a solar facility wherever you wanted and you get the FIT, with no competition. Now it comes down to winning the tender. Organizations now must make an upfront investment to develop a project.”
Further, Marcel added: “Germany just can’t keep adding renewable energy like crazy. There’s a growing need for battery storage, combined gas-steam cycle generators, demand response, energy efficiency, and other established and emerging technologies and strategies to defer distribution investment.”
Marcel concluded: “I don’t expect consumers to complain about increased grid fees. The renewable energy allocation charge was only paid by households and small commercial and industrial consumers. Large customers did not pay it. But the transmission charge is paid by almost everyone, so it’s seen as more equitable. It’s not only divided among more customers, but it’s also proportionate to their kilowatt-hour consumption. So residential customers will see a much smaller increase in grid fees.”