Speculation on Solar Outside the Feed-in Tariff System in Germany

Bloomberg just published an article about prices for electricity future contracts going down in Germany, which is a continuing trend. Rising shares of solar and wind (which have no fuel cost) of course bring wholesale prices down.

And that article contained this remarkable paragraph:

As much as 18 percent of electricity demand may be replaced by solar panels not connected to Germany’s grid, reducing demand for other sources by 6 to 10 percent by 2020, Per Lekander, a Paris-based analyst at UBS AG (UBSN), said in a research note.

That’s interesting. I noted earlier that it is difficult to find any numbers about how much solar is actually installed outside the feed-in tariff, for pure self-consumption. Systems are only reported to the Federal Network Agency if they want to sell to the grid. So there is a unreported capacity of solar in Germany, and it might be substantial right now already.

The advantage of running your solar installation without connecting it to the grid is that you don’t pay surcharges, taxes, or network charges, which is a substantial advantage. As noted before, a significant percentage of German companies either already have solar capacity or plan to install it for self consumption.

Replacing 18 percent of electricity demand by this kind of self-consumption capacity would translate to over 100 TWh. That would be a remarkable number, considering that solar only delivered 28.5 TWh last year, with the World’s largest solar capacity of over 30 GW. It would imply much over 100 GW in industry systems not connected to the grid installed by 2020.

But with no surcharges, no taxes, no network charges and solar panel prices dropping fast, that could easily happen. It only takes a couple of weeks to install even large systems.

It would be nice to get some reliable reports on how this market is developing. The announcements on the capacity connected to the grid and qualifying for the feed-in tariff are not helping with that task.


Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

3 thoughts on “Speculation on Solar Outside the Feed-in Tariff System in Germany

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