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July 30, 2014
Jürgen Weiss Authors Report Assessing Major Outcomes from Solar Energy Support in Germany

Brattle principal Jürgen Weiss has authored a report that examines and outlines the main lessons learned from solar PV energy support in Germany over the last ten years. Prepared for the Solar Energy Industries Association (SEIA), Dr. Weiss’ report finds that even with some faults that are in the process of being corrected, the German solar support program has proven relatively successful, given Germany’s overall commitment to significantly and rapidly expanding renewable energy production.

Recent reports about the rising cost of Germany’s feed-in tariffs (FITs) for solar PV, along with the resulting reform efforts, have caused some to view Germany’s system as a poor model for other countries to follow. In his report, Dr. Weiss argues that while the costs of Germany’s renewable program have been significant, and its success has led to penetration levels of renewable energy sources high enough to require modifications to both the renewable program itself and to overall electricity market design, Germany’s program has been successful in its goal of “de-fossilizing” Germany’s electricity sector.

The report also finds that while the costs of electricity to most end use customers have increased, the size of the renewables levy paid by customers is an incomplete, and likely exaggerated, measure of the cost of the program to consumers. Additionally, exemptions for trade-sensitive and energy-intensive industries have allowed electricity costs for large industrial users in trade-sensitive industries to remain in line or even below those faced by European competitors, and thus have aided to maintaining the country’s strong competitive position.

In his report, Dr. Weiss provides a set of key lessons from the Germany experience that can be applied to other countries’ renewable energy frameworks. Dr. Weiss concludes that Germany’s system of FITs for solar PV have allowed the country to increase the share of solar PV in its energy mix significantly while avoiding the catastrophic boom-bust cycles experienced elsewhere. The cost increases under the program are essentially caused by 3-4 years of PV installations far in excess of expectations, and a FIT design not allowing for faster FIT reductions in response to installations above expectations, something that can be avoided with a better FIT design – and something that is being addressed in Germany now.

The report, “Solar Energy Support in Germany: A Closer Look” can be downloaded below.