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Snapshots from Germany: Transforming energy markets in FITS and starts

Feed-in tariffs are out, self-consumption is in.

This is one of the latest trends from Germany, the country that changed the history of solar with its sustained commitment  — 14 years and counting — to a feed-in tariff (FIT). But, as the Solar Electric Power Association’s (SEPA’s) fact-finding mission to Germany heard on its first day of bringing together American utility and solar leaders and their German counterparts, the solar landscape in Europe’s renewable energy powerhouse is changing.

The mission, including 34 utility and solar executives from across the United States, is spending three days in Dusseldorf, learning all about Germany’s Energiewende, or energy transition, looking at the country’s successes and the economic and technical challenges raised by the increasing amounts of renewable power on its electric grid.

The FIT subsidies encouraged farmers and homeowners across Germany to invest in rooftop photovoltaic (PV) solar arrays, guaranteeing a nice 20-year return on investment. The FIT was wildly successful, building a new electricity resource, not in traditional, central-station plants but roof by roof.

As a result, more than 75 percent of today’s 38 gigawatts of solar in Germany is sited on residences, farm buildings and small businesses.

“The PV movement came from the people,” said Stefan Müller, COO of Enerparc, a German solar developer.


Stefan Müller, COO of  Enerparc,(left) and Chris Vlahoplus of ScottMadden during SEPA’s fact-finding mission to Germany. (Photo by Bob Gibson)

Germany’s FIT has not only dropped the price of installed PV in Germany by 70 percent since 2000, but spurred a global PV industry that has made rooftop solar widely affordable.

“It was our gift to the rest of the world,” Müller said with a smile.


But now, with the cost of installed PV trending well below retail grid electricity in Germany, the past two years has seen a growing trend for power from rooftop PV to be consumed in the home rather than sold back to the grid for a FIT payment.

Even though a greatly reduced FIT payment remains in place, “self-consumption ‘rules’ from today on,” Müller said.


The next big change may come when — or if — battery storage drops in price to the point where solar plus storage expands self-consumption and further diminishes the average ratepayer’s reliance on Germany’s highly reliable but expensive grid.