End of the cap on solar funding

Published on: June 17, 2020 / Update from: September 26, 2020 - Author: Konrad Wolfenstein

Retaining the cap would have caused many investors and those interested in photovoltaics to shy away from implementing a corresponding system due to cost considerations.

In the last few days, countless solar installers and builders across the country may have breathed a sigh of relief. The reason is the planned elimination of the funding cap of 52 gigawatts for photovoltaic systems with up to 750 kilowatts. Since this upper limit was almost exhausted, there was great uncertainty in the industry; after all, the feed-in tariff is an important component in terms of the financing and profitability of such projects.

The cap scared solar engineers and investors

Retaining the cap would have made many investors and those interested in photovoltaics shy away from implementing a corresponding system due to cost considerations - with unforeseeable consequences for manufacturers, service providers and installers. The cap to promote solar capacity of no more than 52 gigawatts was passed by Parliament in 2012, not least for cost reasons. But since then, both political and economic circumstances have changed significantly.

In order to achieve the desired goal of a 65 percent share of green electricity by 2030, good framework conditions for alternative energies must continue to be created. In addition, the costs of solar power generation have fallen noticeably in the meantime, so that the originally planned cap seemed anachronistic to many. This is one of the reasons why we have been working on abolishing the unpopular paragraph for some time - but not without complications.

The lack of agreement on wind turbines delayed the solution

The trigger for the actually unnecessary delay was the connection between the negotiations about an end to the feed-in tariff and the dispute over minimum distances between wind turbines and settlements. The politicians of the coalition parties already agreed in the spring that the cap on solar subsidies must be lifted. However, they forgot to reach an agreement on the controversial minimum distances for wind power. But without this, the Union wanted it, there should be no consent to end the 52 gigawatt limit.

Finally, a compromise was agreed upon. This stipulates that the federal states are given a certain amount of freedom in setting the minimum distance between wind turbines and residential buildings, which is set at 1,000 meters. The compromise solution comes just in time, it seems. Time is of the essence, after all, the capacity of the subsidized systems has now exceeded a total output of 50 gigawatts. Since there is currently significant investment in photovoltaic systems, the 52 gigawatts could be reached in just a few weeks. In case of doubt, this would mean that future builders would be left without funding, even though the government has fundamentally decided to provide further support.

Fortunately, the uncertainty has been over since the Bundestag voted for the Building Energy Act (GEG) on May 18th. However, before the regulation becomes legally binding, the Federal Council must approve it. This should happen at the next meeting - the last before the summer break - on July 3rd and probably just in time before the magical 52 gigawatt limit is reached.

More project opportunities for solar engineers?

At the same time, there is more good news for solar installers. The coalition members in the GEG decided that the incentives for the construction of solar systems should be further increased in the future. The focus is particularly on multi-family houses and larger buildings, which politicians believe have not yet been adequately developed. The aim of the solar inspection obligation is to ensure that federal, state and local authorities will in future have to examine more closely whether systems for absorbing solar energy can be productively integrated into new buildings and renovation projects.

The agreement means that investors and building owners who are thinking about setting up a new photovoltaic system can continue to count on government support in the future. In view of the now regained planning security, solar engineers and builders should sleep a little more soundly again.

Suitable for:

• End of solar subsidies will be lifted! (09/20/2019)