Germany's renewable energy legislation reform slammed

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The solar industry in Germany was not expecting the most recent EEG reform to bode well for the industry, but the "reboot" announced today by the government minister responsible, Sigmar Gabriel, is even worse than was expected.

"With its Reform, Minister Gabriel increases the dependence on Russian gas," said BEE CEO Hermann Falk. "Instead, Gabriel takes the pressure off the competition currently being felt by conventional energy producers."

One of the most egregious features of the EEG reform announced today is that the EEG levy, which is used to pay for Germany’s energy transformation, or Energiewende, will itself be charged to electricity self consumed from a solar array – or alternative distributed generation source. 30% of the full EEG levy will be charged on self-consumed electricity until the end of 2015, rising to 35% in 2016 and 40% in 2017.

In 2013 the EEG levy was €5.28c/kWh rising to €6.24c/kWh in 2014.

German-based IHS solar analyst Stefan de Haan said that levying the EEG on self-consumed electricity makes little political, economic or environmental sense.

"PV business models in Germany work today when they are based on self consumption, not on the very low remaining feed-in tariff. In particular in the segment of large commercial rooftops we see a significant potential, which is now put at risk."

There could also be implications for the PV+storage market, with currently battery systems designed explcitely to maximise self consumption.

Looking longer term, de Haan says that IHS remains optimistic in its outlook.

"PV technology will continue to get cheaper and it will further penetrate the German electricity market. The proposed legislation will delay this process slightly, but not stop it."

The German PV market is at low levels not seen for some years. At the recent Intersolar Europe trade show and conference, a number of module suppliers said that they expect the German solar market to install between 1.5 to 2 GW in 2014. Many had looked to the commercial rooftop space as a potential growth area of the market.

Additional reporting by Eva Weber