Special Advent 2015 for German solar storage incentives

Early November in Germany is the most depressing time of the year. Cold and grey, and daylight, even of the grey variety, is waning. Pretty dim times for those almost ubiquitous solar installations all throughout the nation, which were spurred by a few short years of subsidies to incentivize demand for solar technology made in Germany.

The German Minister for Economic Affairs and Energy, Siegmar Gabriel, added more reasons for the solar enthusiasts to be depressed: he announced his intent to end a subsidy program to support solar battery installation that had commenced in 2013. Gabriel posited that the program had been sufficiently successful to remove artificial incentives. And indeed, there has been success: price reductions of home solar storage installations of about 25% while private investment volumes in these installations increased seven-fold.

Gabriel is concurrently pushing hard for a revamp of Germany’s energy pricing and regulatory landscape; incentives directed at specific technologies aren’t welcome for an anticipated functioning of Energy Market 2.0 with an underlying philosophy of more flexible, demand-based pricing structures.

The renewable energy industry seemed surprised by Gabriel’s intent, deemed the cessation of the program premature and cited some fairness questions in light of the monies awarded to coal-fired power plants to shut down old assets (subsidies predominantly alleviate the impacts of job losses) that are viewed as a cross-subsidy for the remaining coal-fired energy that is still traded. The impacts of cuts to the solar incentives on German solar firms and the country’s renewable energy innovation capital is still front of mind. A short and highly generalized version reads like this: promising technology development, followed by fabulous incentives to create demand, which resulted in industry ramp-up to meet demand and a short period of explosive domestic industry growth, which was quickly dampened by a stark cut of incentives, which in turn created financial crunches and led to technology and know-how being sold at fire-sale prices into low-cost manufacturing economies. Now, these solar storage incentives, albeit modest, naturally aid in the solar industry recovery.

Now here’s the “good stuff”: by the end of November, as the country starts celebrating Advent with candles and outdoor lighting everywhere (and healthy helpings of mulled wine), a chorus of politicians across party lines and renewable industry representatives had succeeded in pushing back: the incentives won’t be cut. They’ll be revised and included in different programs – and we’re sure the process will remain a sizable bureaucratic burden (such that only half of eligible installations has even bothered since 2013) – but they won’t be cut for another three years.