Germany Increases Support for Solar Energy Development to Tackle Energy Shortage

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In the face of the challenge of energy scarcity, Germany has once again increased its support for photovoltaic technology.

Berlin City Skyline in Germany at Night.

To stimulate the slow growth rate of the German solar sector, the Federal Network Agency has announced an additional tender for 1.5 GW of solar energy development. Participants can submit project development proposals by January 15 next year, but the size of the proposed project should not exceed 100 MW. Solar projects that win government incentives must be completed within nine months after the feed-in tariffs are awarded.

The upcoming tender, also known as the “crisis tender”, is a response to the widespread energy crisis in Germany caused by the conflict in Russia and Ukraine.

In April 2022, Germany unveiled the “Easter Package”, which aims to increase the share of renewable energy in the energy mix to 80% in 2030 and 100% in 2035.

The newly elected German coalition government is committed to accelerating the decarbonization of Germany’s power sector while reducing energy imports. Over the next decade, Germany will speed up photovoltaic development, with a target of 215 GW of installed solar capacity by 2030, with an annual increase of 22 GW.

For Chinese photovoltaic companies, Germany’s active policies will undoubtedly benefit the further growth of the country’s photovoltaic market. Germany’s installed solar capacity has already exceeded one-third of the EU’s.

However, the German government’s new tender has also drawn some criticism. The time frame offered by German institutions for completing construction of solar projects is too short and unrealistic. There are also land restrictions that hinder the development of solar power projects. The potential development site for developers’ solar power plants is limited.

The Federal Network Agency has been unsuccessful in allocating all planned capacity mentioned in previous solar tenders. In the last tender allocation, the Federal Network Agency was only able to allocate 700 MW of the 1,126 MW planned at the beginning of this year.

Solar power tenders are mainly overbid, but wind power tenders have been undersubscribed over the past few years. The under-subscription of solar tenders came into focus last month, raising questions about investor interest.

The head of the German solar association BSW-Solar, Carsten Körnig, said that the current “site restrictions” would lead to a slowdown in solar expansion due to tight state-level restrictions on land allocation for solar power plant construction. The current framework is outdated and is curbing the expansion of solar, and if not addressed, future solar tenders may be frequently undersubscribed.


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