EU approves 28 billion EURO renewable energy plan for Germany

The European Commission (EC) has approved amend to Germany's renewable energy plan, which aims to help Germany meet its renewable energy targets.

The revised program in Germany's Renewable Energy Act (known as Erneuerbare Energien Gesetz 2023) will last until the end of 2026, with a total budget of 28 billion euros ($29.8 billion), aiming to account for renewable energy generation by 2030. The ratio reaches 80%. The development of clean energy is the key to Germany's goal of achieving net-zero greenhouse gas emissions by 2045, while filling the gap in Russia's energy supply to Europe to a certain extent.

In terms of policies, measures such as simplifying the approval process, canceling additional taxes on renewable energy, and canceling household photovoltaic income tax and value-added tax have been adopted to further improve the economics of photovoltaic installed capacity and stimulate further explosion in demand for household installed capacity. At present, Germany's demand for energy continues to rise, and the demand for photovoltaics is still rigid. In the future, the German photovoltaic market still has huge development prospects.

Germany plans to increase innovative tenders, including rooftop and ground solar PV, the number and size of onshore wind and biomethane tenders and introduces an effective quantity control mechanism for solar PV and biomethane tenders to address renewable energy in southern Germany Issues with higher deployment costs and ensuring that renewable energy projects are developed where electricity consumption is high. The support program runs until the end of 2026 and aims to meet Germany's goal of 80 percent of its electricity coming from renewable sources by 2030.

The scheme will take different forms depending on the size of the project, with smaller projects mainly through feed-in tariffs and others through market premiums that network operators pay producers on top of electricity market prices.

The German Rainbow Alliance, which includes the center-left Social Democrats (SPD), the Green Party and the neoliberal Free Democrats (FDP), released a plan earlier this year to accelerate the development of solar PV in Germany, which aims to reach the country's target of 215GW of PV capacity by 2030.

In this plan, Germany also plans to increase the number and capacity of tenders for rooftop and ground photovoltaics. These tenders will be conducted by technology type and will be modified to make them more competitive, limit the risk of overcompensation, and minimize costs to consumers and taxpayers.

Another modification to the tender is the introduction of a solar PV quantity control mechanism, which is used to adjust the tender quantity for each technology to avoid undersubscription.

From 1 January 2027, support for renewable energy generation will be phased out when prices are negative, preventing overcompensation of producers.

Furthermore, Germany once again became the largest solar market in Europe with 7.9GW of new solar capacity added in 2022, according to the latest report from trade body SolarPower Europe. In addition, Germany's new installed capacity is expected to exceed 10GW in 2023, with a cumulative increase of 62.6GW between 2023 and 2026 and a cumulative increase of 131GW by 2026.

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