New Failure in Germany: Renewable Energy Law Reform Draft

The German government just approved a draft on reforming the renewable energy law. In the tradition of recent failures leading to much less deployment, it is another disappointment for the climate.

Having introduced auctions as a policy model and having seen that policy change reduce deployment, the draft doubles down on the failed auction concept and wants to introduce it now for large rooftop installations too.

Again, the reason behind supporting this move is to save on costs. Minister Altmaier said that there is a large boom expected in this market segment making cost reductions important, see this report at PV-magazine.

The plan seems to be to have auctions for 250 MW in both 2021 and 2022.

If so, there will be a ceiling on new projects in this segment. That is exactly what no one needs. If the free market wants more large scale rooftop solar, why exactly does Altmaier want to prevent this? If anything, auctions make solar projects more expensive, since there is more risk, more hoops to jump through, more bureaucracy.

Even if it were true that prices might go down as a consequence of auctions as opposed to as a consequence of massive deployment increases, this is not the time to worry about the price of solar. If you see your house on fire, do you worry about how much the water you want to pump on that house will cost you?

Published by kflenz

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

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