The energy transformation with photovoltaics in Germany: a comprehensive look at progress and challenges

Photovoltaics in Germany: Growth, problems and perspectives

Germany is in the midst of a remarkable transformation of its energy supply, in which photovoltaics (PV), the conversion of sunlight into electricity, plays a key role. The latest data from the Federal Network Agency and numerous reports on new solar energy projects, from gigantic solar parks to small balcony installations, impressively demonstrate the enormous growth of this technology. This boom is no accident, but rather the result of ambitious political goals, continuously decreasing costs for solar technology, and a growing public awareness of the need for renewable energies in the fight against climate change.

Despite this impressive momentum, Germany still faces significant challenges that could slow the further expansion of photovoltaics. These include the increasing scarcity of suitable land for solar installations, concerns about the safety of increasingly important battery storage systems, complex and lengthy permitting processes, and growing competition for land use between nature conservation, agriculture, and the energy transition. This comprehensive report closely examines the current developments and challenges facing photovoltaics in Germany and highlights the crucial role this technology will play in our country's future energy supply.

An unprecedented increase in solar power generation: figures, facts and milestones

The year 2024 marked a historic turning point for photovoltaics in Germany. Official figures from the Federal Network Agency confirm an exceptional expansion of installed solar capacity. Capacity increased by an impressive 16.2 gigawatts (GW), bringing Germany's total capacity to 99.3 GW. This massive increase significantly contributed to the rise in total installed renewable energy capacity in Germany by almost 20 GW to a total of 190 GW. It is particularly noteworthy that the expansion of solar capacity significantly exceeded the expansion of onshore (2.5 GW) and offshore (0.7 GW) wind power. This underscores the central importance of photovoltaics as a driving force behind Germany's energy transition.

Reaching the milestone of almost 100 GW of installed solar capacity is a significant achievement on the path to the German government's long-term climate goals. These goals are enshrined in the Renewable Energy Sources Act (EEG) and stipulate an installed photovoltaic capacity of 215 GW by 2030. This ambitious target underscores the political will to make solar energy a cornerstone of Germany's energy supply.

During 2024, more than one million new solar power systems were commissioned in Germany. This enormous number of installations, totaling the aforementioned 16.2 GW of new capacity, demonstrates the widespread acceptance and dynamic growth of photovoltaics across the country. It is not only the sheer number of systems, but also their diversity that makes this trend so remarkable. From large solar parks covering entire landscapes to the numerous small balcony power plants increasingly common in cities – photovoltaics is literally conquering the entire country.

This trend continued in February 2025. Net installed PV capacity that month amounted to 1,535 megawatts (MW). Although this monthly increase already represents a considerable output, analyses show that this figure is still below the monthly expansion required to actually achieve the target of 215 GW by 2030. This means that the expansion rate must be increased further in the coming years to not only proclaim the ambitious goals but also make them a reality. Therefore, further efforts, political decisions, and societal commitment are needed to promote solar energy to the extent necessary for a successful energy transition.

To better illustrate the development of photovoltaics in recent years, it's worth looking at the annual installation figures. In 2019, 3,780 megawatts (MW) of photovoltaic capacity were added, rising to 4,890 MW in 2020, and reaching 5,260 MW in 2021. This trend continued, with a remarkable 7,480 MW added in 2022. The years 2023 and 2024 are particularly noteworthy, with installation figures reaching a veritable boom of 15,900 MW and 16,200 MW, respectively. While the figure for 2023 may vary slightly depending on the source, it nevertheless clearly demonstrates the strong upward trend.

This exponential increase in photovoltaic installations impressively demonstrates the dynamism of the solar industry in recent years. The remarkable developments of 2023 and 2024 mark a turning point and underscore the urgent need to continuously capitalize on this momentum. Despite this success story, the energy transition remains an immense challenge that must not be overlooked. Only through sustained efforts and effective measures can this positive trend be transformed into a sustainable future.

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A multifaceted expansion: growth in all segments of photovoltaics

The expansion of photovoltaics in Germany is by no means limited to a single area. It spans various system sizes and installation types, demonstrating the versatility and adaptability of this technology. In 2024, approximately two-thirds of newly installed solar power came from systems mounted on rooftops or building facades. This high proportion of rooftop systems underscores that utilizing existing building infrastructure remains a key pillar of PV expansion. Existing support programs, which offer attractive feed-in tariffs, and the increasing opportunities for self-sufficiency with solar power are crucial factors contributing to this development. Homeowners are increasingly recognizing the dual benefits of solar systems: they contribute to environmental protection while simultaneously reducing their own energy costs.

Another important trend that has become increasingly prominent in recent years is the significant rise in so-called balcony power plants or plug-in solar devices. These mini-PV systems, which can be easily installed on balconies or terraces and feed the self-generated electricity directly into the home's electrical grid, are enjoying growing popularity. In 2024, around 435,000 such balcony power plants were registered in the Federal Network Agency's market master data register. These systems contributed a total of 0.4 GW to newly installed solar capacity and accounted for 2.6 percent of the total solar expansion. Compared to the previous year, when the share was only 1.5 percent, this represents a dynamic development that impressively reflects the growing interest of private individuals in their own decentralized electricity generation. This trend continued in February 2025, with over 21,000 newly installed balcony power plants. These figures demonstrate that photovoltaics is no longer just a topic for large energy companies or farmers, but has arrived in the mainstream of society. Citizens themselves are becoming active participants in the energy transition.

In addition to decentralized systems on roofs and balconies, ground-mounted solar farms are playing an increasingly important role in the large-scale expansion of photovoltaics. These large solar parks, often built on former farmland, brownfield sites, or conversion areas, can generate significant amounts of electricity in a short time and are therefore essential for achieving ambitious expansion targets. In February 2025, ground-mounted systems accounted for the largest share of monthly new capacity additions, at 967 MW. The commissioning of Germany's current largest solar power plant, with a capacity of 162 MW, in Saxony in spring 2024 underscores the importance of these large-scale projects for achieving expansion targets. The growing relevance of ground-mounted systems could also be a response to the increasing challenge of land availability for rooftop installations in densely populated areas. In cities and metropolitan areas, roof space is often limited or already used for other purposes, making ground-mounted systems outside of cities increasingly important for meeting the demand for solar power.

Regional dynamics: Where solar energy is booming in Germany

The distribution of photovoltaic installations varies considerably across Germany. This is due to several factors, including solar irradiance, the availability of suitable land, local political frameworks, and the economic structure of each region. In 2024, Bavaria recorded the highest newly installed solar capacity at 4.0 GW. This figure underscores Bavaria's pioneering role in the field of renewable energies. Bavaria benefits from comparatively high levels of solar irradiance and has a history of actively promoting renewable energy.

However, a different picture emerges when considering the installed PV capacity per capita. Here, Brandenburg leads the German states with 2,565 watts per inhabitant. This high figure indicates intensive use of the existing potential in this region. Brandenburg, which is large in area and sparsely populated, has large, unused areas that are ideally suited for the construction of solar parks. Furthermore, the state has specifically promoted investments in renewable energies in recent years.

In February 2025, Saxony showed the greatest growth in photovoltaic installations, with a 5.7 percent increase in installed capacity since the beginning of the year. The commissioning of Germany's largest solar power plant in Saxony the previous year may have contributed to this development. Saxony, traditionally an industrial region, is currently undergoing structural change and is increasingly focusing on future-oriented sectors such as renewable energies.

These regional differences in the rate of expansion and installed capacity reflect the diversity of Germany. Each region has its own strengths and challenges when it comes to the expansion of photovoltaics. Some federal states are better suited for solar energy expansion than others due to their geographical location or political orientation. It is important to consider these regional differences and develop tailored strategies to fully realize the potential of photovoltaics throughout Germany.

Overcoming the obstacles: Challenges for sustainable growth of solar energy

Despite the impressive successes in expanding photovoltaics in Germany, the challenges that could hinder the sustainable and long-term growth of this technology must not be ignored. These challenges are diverse and range from land availability and safety concerns to bureaucratic hurdles.

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The scarcity of suitable land: A growing problem

Finding suitable sites for the further expansion of photovoltaics is becoming increasingly challenging. With the heightened focus on ground-mounted systems, which became particularly evident in February 2025, competition for land resources is intensifying. This leads to conflicts with other land use claims, especially those related to agriculture and nature conservation. Farmers need arable land for food production, and conservationists warn of the loss of valuable habitats due to the construction of solar parks.

The debate surrounding the use of golf courses for solar power illustrates the balancing act between recreational interests and the need to mobilize land for the energy transition. Golf courses are often large, unsealed areas that could potentially be used for solar energy. However, such proposals often encounter resistance from golf course operators and users who do not want to restrict their recreational activities.

To minimize these conflicts, comprehensive and transparent spatial planning is needed that considers both the needs of PV expansion and ecological and social concerns. Criteria must be developed to determine which areas are suitable for solar installations and which are not. Ecological aspects, such as the protection of biodiversity and the landscape, should be considered alongside social aspects, such as public acceptance and the impact on agriculture.

Strategies like agri-photovoltaics, which allows for the simultaneous use of land for agriculture and electricity generation, could represent a promising solution. With agri-photovoltaics, solar modules are installed in such a way that the land beneath them can continue to be used for agriculture. This can be achieved by raising the modules or by using transparent modules. Agri-photovoltaics offers the advantage of reducing competition for land while simultaneously creating synergies between agriculture and the energy sector.

Safety concerns regarding battery storage: An important aspect of the energy transition

The increasing number of photovoltaic systems combined with battery storage raises questions regarding the safety of these storage technologies. Battery storage is an essential component of a sustainable energy supply, as it makes it possible to use the generated solar power even when the sun isn't shining. It contributes to grid stability and enables a higher self-consumption rate of solar power.

Although battery storage offers many advantages, potential risks exist regarding the thermal stability and fire hazard of lithium-ion batteries, which are currently the most widely used storage technology. Lithium-ion batteries can overheat and catch fire if overcharged, deeply discharged, or damaged. Such fires are often difficult to extinguish and can release toxic gases.

The commissioning of large battery storage systems, such as the 174 MW system completed in Hamm shortly before the end of 2024, therefore requires strict safety precautions and adherence to high technical standards. Fire protection measures must be implemented, including the installation of fire alarm systems, sprinkler systems, and fire-resistant enclosures. Furthermore, operators and maintenance personnel must receive comprehensive training to identify and manage potential risks.

To ensure the acceptance and safe use of battery storage systems, continuous research and development in battery technology is essential. New battery technologies must be developed that are safer, more durable, and more environmentally friendly than current lithium-ion batteries. Establishing comprehensive safety standards and providing transparent information to the public are also crucial for building trust in storage technology and addressing concerns.

Planning and approval difficulties: Bureaucracy as a brake on the energy transition

The planning and permitting of photovoltaic systems, especially larger projects, can be a lengthy and complex process in Germany. Although the Federal Network Agency recorded a record number of permits for onshore wind turbines in 2024, the discrepancy between permits issued and actual installations suggests potential bottlenecks in the further process. Similar challenges could also arise with the expansion of photovoltaics.

Local opposition, complex environmental impact assessments, and lengthy coordination processes between various authorities can delay or even prevent the construction of photovoltaic (PV) systems. Citizen initiatives often protest the construction of solar parks in their neighborhoods, fearing noise pollution, visual impact on the landscape, or a decrease in property values. Environmental impact assessments can be very costly and often require expert opinions from multiple specialists. Coordination processes between municipalities, counties, regional governments, and state authorities can be protracted and lead to unnecessary delays.

Accelerating and simplifying planning and approval processes, without neglecting environmental and local residents' interests, is crucial to advancing the expansion of photovoltaics at the necessary pace. This requires clear and standardized approval guidelines, streamlined administrative procedures, and improved coordination between the various authorities. Early public involvement and transparent communication are also essential to fostering acceptance of PV projects and reducing resistance.

Potential challenges in the area of ​​performance data: transparency and consumer protection

Accurate and transparent performance specifications for PV systems are crucial for consumer confidence and market integrity. Buyers of solar systems must be able to rely on the accuracy of the stated performance data and the system actually producing the expected amount of electricity.

Compliance with norms and standards when specifying the nominal power output and actual energy production of PV systems is therefore crucial. International standards define how the power output of solar modules must be measured and specified. These standards ensure fair comparability between different products and protect consumers from misleading information.

It is important that manufacturers and distributors of PV systems comply with these standards and that performance data is communicated clearly and understandably. Consumers should carefully research the performance data before purchasing a solar system and, if necessary, consult independent experts. Increased controls and clear regulation in this area could also help strengthen confidence in the technology and protect the market from unscrupulous providers.

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The economic importance of photovoltaics in Germany: More than just green energy

Photovoltaics is not only an important component of the energy transition and climate protection, but also a significant economic factor for Germany. The expansion of solar energy creates jobs, generates investment, and contributes to strengthening domestic industry.

Investment trends and market dynamics: A booming market on the rise

Investments in new photovoltaic systems in Germany reached a remarkable €17.2 billion in 2023. This figure represents an increase of 123 percent compared to the previous year and underscores the enormous economic interest in expanding solar energy. The significant increase in investments indicates positive market developments and investors' confidence in the future viability of photovoltaics. Investors are increasingly recognizing the return opportunities offered by the solar market and are willing to invest large sums in new projects.

Furthermore, the operation of existing photovoltaic systems generated economic stimulus amounting to €1.85 billion in 2023. These figures illustrate the growing importance of photovoltaics not only for energy supply but also for the German economy. Solar energy has long since become a significant economic sector, making a substantial contribution to the gross domestic product and creating numerous jobs.

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Contribution to electricity generation and market value: Solar energy as a key pillar of electricity supply

In 2024, photovoltaic systems fed a total of 63.3 terawatt-hours (TWh) of electricity into the German power grid. This corresponds to a share of 14 percent of gross electricity consumption. Compared to the previous year, in which PV feed-in was 55.7 TWh, this represents a significant increase, primarily attributable to the expansion of installed capacity and the above-average number of sunshine hours in summer. Photovoltaics are thus making an increasingly important contribution to meeting Germany's electricity demand and reducing its dependence on fossil fuels.

The market value factor for PV electricity is expected to decline in the medium term, as the supply of electricity from renewable energy sources increases during periods of high feed-in. This effect, known as the "merit order effect," is a natural consequence of the success of renewable energies. The more solar power is fed into the grid, the lower the demand for more expensive, conventional power plants, which tends to lead to lower electricity prices on the exchange. However, this also underscores the need for storage solutions and flexible loads to optimally utilize the generated solar power and make it available even during periods of lower sunlight or at night. Smart grids, which better balance supply and demand, will also play a crucial role in securing the long-term value of solar power.

To illustrate the development of solar power generation over time, a clear trend emerges from the annual figures and their share of total electricity generation. In 2019, electricity generation from photovoltaics amounted to 41.7 TWh, followed by 45.5 TWh in 2020 and 45.3 TWh in 2021. Generation rose significantly to 54.3 TWh in 2022, while a slight decrease to 53.5 TWh was recorded in 2023. A figure between 59.8 and 63.3 TWh is projected for 2024, representing 14% of the country's total electricity generation. This variation in figures is due to different sources but is attributable to the strong expansion of photovoltaics and abundant sunshine. The steady increase in absolute electricity generation from solar power plants not only underscores the growing importance of solar energy for Germany's electricity supply but also its significant contribution to the decarbonization of the energy system. The share of photovoltaics in the national electricity mix will continue to rise and will play a key role in a climate-friendly energy future.

Feed-in tariffs and tenders: Government support for solar energy

The economic attractiveness of photovoltaic systems is significantly influenced by government subsidies. In recent decades, Germany has employed various support mechanisms to promote the expansion of renewable energies, including photovoltaics. A key instrument has been, and remains, the feed-in tariff.

For small rooftop solar installations with self-consumption that were commissioned by January 31, 2025, the feed-in tariff is up to 8.03 ct/kWh for a period of 20 years, depending on the system size. This guaranteed payment for solar power fed into the grid provides planning security for private and commercial investors and makes solar installations economically attractive. The feed-in tariff is regularly adjusted and tends to be reduced in order to lower the costs of promoting renewable energies and to highlight the market value of solar power.

For larger ground-mounted systems and certain rooftop installations, funding is generally provided through tenders issued by the Federal Network Agency. In these tenders, various project developers compete for the funding. The contract is usually awarded to the developer offering the lowest price per kilowatt-hour of electricity. This competitive process aims to reduce the costs of promoting renewable energy and to ensure its efficient expansion.

The maximum bid price for the tenders for first-segment solar power plants has been set at 6.80 cents per kilowatt-hour for the 2025 bidding dates. This value represents the maximum price that project developers can offer to win a contract. The tenders have proven to be an effective instrument for promoting the expansion of large-scale solar parks while keeping costs under control.

The combination of feed-in tariffs for smaller installations and tenders for larger projects has created a stable and attractive investment environment for photovoltaics in Germany. However, these support instruments are not static but are continuously developed and adapted to changing market conditions. Policymakers face the challenge of designing support measures that ensure the continued expansion of photovoltaics while keeping costs manageable for consumers and the public purse.

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Looking to the future: Development perspectives and considerations for solar energy

Photovoltaics in Germany is at a crucial juncture. The successes achieved so far are impressive, but the ambitious goals for the future require further efforts and innovative approaches. It is essential to overcome the existing challenges and fully exploit the potential of solar energy.

Progress towards renewable energy goals: An ambitious path

The German government is pursuing ambitious targets for the expansion of photovoltaics as part of its comprehensive energy transition strategy. Installed capacity is to increase to 215 GW by 2030 and to 400 GW by 2040. These targets are an integral part of the plan to make Germany climate-neutral by mid-century and to drastically reduce its dependence on fossil fuels.

To achieve these goals, a massive expansion of photovoltaics is required in the coming years. The annual net installation is projected to reach a peak of 22 GW by 2026. This expansion rate is significantly higher than the figures achieved in recent years and demands considerable efforts from all stakeholders – policymakers, businesses, and society.

However, the expansion in February 2025 fell short of the required trajectory to achieve the 2030 target, indicating that expansion efforts need to be further intensified. There is still a long way to go to actually reach the set goals. This requires continuous review of strategies, adjustments to the framework conditions, and decisive action from all stakeholders.

With a projected gross electricity consumption of 658 TWh in 2030, the planned expansion of photovoltaics is expected to result in a solar power share of approximately 30 percent, while renewable energies as a whole are projected to reach 80 percent. These figures illustrate the central role that photovoltaics will play in Germany's future energy system. It is intended to become a key pillar of the electricity supply and make a significant contribution to achieving climate targets.

Potential solutions and strategies: Innovation and foresight are needed

To meet the challenges of further expanding photovoltaic (PV) capacity and achieve the ambitious goals, various solutions and strategies are conceivable. A package of measures is needed that covers different areas and is coordinated with one another.

In the area of ​​land use, innovative concepts such as agrivoltaics or the use of brownfield sites and infrastructure corridors could play a greater role. Agrivoltaics, as already mentioned, enables the dual use of land for agriculture and electricity generation, thus reducing competition for land. Brownfield sites, such as former military sites or industrial wastelands, often offer untapped potential for solar installations and can help to conserve valuable natural areas. The use of infrastructure corridors, such as along highways or railway lines, could also be a way to open up additional areas for photovoltaics.

The safety of battery storage systems can be further improved through continuous research and development, the establishment of stringent safety standards, and comprehensive public information. The development of new, safer battery technologies is a key area of ​​research. Standardizing safety requirements and testing procedures for battery storage systems is also crucial for minimizing risks. Transparent communication about battery storage safety and comprehensive public education can help alleviate concerns and increase public acceptance of this technology.

When planning and permitting PV systems, simplifying and accelerating procedures while considering environmental and local residents' interests is crucial. Bureaucracy must be reduced without neglecting important protective measures. Digital permitting processes, clear deadlines, and improved coordination between authorities can help speed up the approval process. Early public involvement and transparent communication are also essential to avoid conflicts and foster acceptance of PV projects.

Furthermore, measures to ensure quality and accurate performance data could strengthen confidence in the technology. Independent testing laboratories, certifications, and clear labeling requirements can help guarantee the quality of PV systems and protect consumers from unscrupulous suppliers. Promoting further education and training in the solar industry is also crucial to ensure that PV systems are installed and maintained professionally.

Policy adaptation and technological progress: Flexibility and innovation as success factors

The framework for expanding photovoltaics must be continuously adapted to changing market conditions and technological developments. The energy transition is a dynamic process that requires constant adjustments.

This includes, for example, the design of support instruments and the consideration of the declining market value factor for solar power. Feed-in tariffs and tenders must be further developed to continue incentivizing investment in photovoltaics while simultaneously keeping costs manageable for consumers and the public purse. Integrating storage systems into support programs could also be a way to increase self-consumption of solar power and improve grid stability.

Technological advances in areas such as high-efficiency solar cells, innovative storage solutions, and smart grids will also play a crucial role in the future development of photovoltaics. Research and development in the solar industry is a key driver of innovation. New solar cell technologies, such as perovskite solar cells or tandem solar cells, promise higher efficiencies and lower costs. Innovative storage solutions, such as solid-state batteries or power-to-gas technologies, could revolutionize the storage and use of solar power. Smart grids based on digital technologies enable better control and optimization of the energy system and can help to optimally integrate solar power into the grid.

Photovoltaics as the key to Germany's sustainable energy supply

The expansion of photovoltaics in Germany has developed remarkable momentum in recent years and is making a significant contribution to the energy transition. The latest figures from the Federal Network Agency and the numerous project announcements impressively demonstrate this trend. Solar energy is well on its way to becoming a mainstay of Germany's energy supply and making a crucial contribution to achieving climate targets.

At the same time, further expansion faces considerable challenges, ranging from the availability of suitable land and safety concerns to complex planning procedures. These challenges should not be underestimated, but they are solvable if all stakeholders work together and innovative solutions are developed.

To achieve the German government's ambitious goals and establish photovoltaics as a key pillar of a sustainable energy supply, continuous efforts, innovative solutions, and the consistent development of the political and regulatory framework are needed. It's a marathon, not a sprint, but the path is clearly defined and the direction is right.

The potential of photovoltaics is immense, and its consistent use is a crucial building block for a successful energy transition in Germany. Solar energy is not only an environmentally friendly and climate-friendly energy source, but also a significant economic factor and a driver of innovation and technological progress. Germany has the opportunity to take a leading role in the field of renewable energies with photovoltaics and to make a significant contribution to the global fight against climate change. It is now up to us to seize this opportunity and successfully continue the solar revolution in Germany.

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