Subsidy less Solar self consumption displacing Feed in Tariff in Germany

Germany has been a trailblazer in solar energy usage, with its terrific EEG law being the single largest factor in making solar energy reach the current heights of success, it has reached today. The feed in tariffs which decreased by double digits every year forced solar manufactures to reduce costs and improve efficiency at a rapid pace, leading to a tremendous decrease in the prices of solar electricity. Germany has the largest installed base of solar power capacity in the world with around 30 GW. The program has been such a huge success that now the feed in tariff has fallen below that of the retail price of electricity. Even solar power costs from panel installed today are cheaper than buying electricity from the grid. This has meant that PV self consumption has become the primary driver of solar growth in Germany today. Solar installation in Germany has fallen by almost 45% this year, as feed in tariffs are no longer attracting big time solar investors. However the market of PV self consumption has meant that solar energy continues to thrive in Germany.

Read more about the German Solar Market here.

Japanese industrial giant Toshiba has entered this self consumption market and plans to install 100 MW in the next 3 years, to supply power to residences. It will supply cheap solar power in the day time and wholesale grid electricity in the night. Toshiba poses a threat to giant German utilities like RWE which are already reeling after the closure of nuclear power plants. Germany has been a renewable energy powerhouse and continues to be the leader in new green trends. I am sure the PV self consumption without subsidies will also show big time growth in sunny European countries like Spain and Italy.

Germany which used to be the largest solar market in the last 3 years with average yearly installation of 7-8 GW each year will probably be the 4th to 5th largest solar market in the world now. The country may not be No.1 but still remains very important country in developing policies and financing models for renewable energy, which would serve as a blueprint for other countries. German multilateral institutions and banks are playing a tremendous role in developing solar energy in many emerging countries. German solar installers such as Enerparc, Conergy etc. still are involved in building huge amounts of solar capacity around the world. German expertise and experience in solar energy is highly sought after in different parts of the world including India.