Germany's new pilot program to promote ground-mounted solar farms "marks a new chapter in the country's renewable energy incentives, according to Federal Network Agency President Jochen Homann.
"Financial incentives will no longer be based on rates set by the administration but will be determined by the competitors themselves," Homann said.
Under last year's revised Renewable Energy Sources Act, incentive rates for renewable electricity will no longer be set by the government but by a market mechanism. The aim of the tender process is to cut the costs of expanding renewable energy while at the same time keeping the present diversity of market players and meeting the government's expansion targets, the Network Agency explains.
The pilot scheme is being tested for solar farms before it is introduced for all other renewable energy forms in 2017.
Homann said the watchdog, which oversees electricity, gas, telecommunications, post and railway, will keep "a close eye on the tenderers to make sure they stick to the rules of the game. We are confident that the tenders will mirror our current diversity of market players."
He added that the regulator would also be able to see just how well the scheme works and make any necessary improvements if necessary.
Three rounds of tenders for solar farms will be run each year. Details of each tender round will be published on the Bundesnetzagentur's website about eight weeks in advance along with the strict requirements for the tender documents.
Investors have until April 15 to submit their first-round tenders to the Agency. The first round will tender a total of 150 MW, with the maximum rate set at 0.1129 per kilowatt hour. Each tender must include information and documents on the land to be developed for the solar farm and must specify an incentive rate (in cents per kilowatt hour) for the electricity to be generated and the farm's capacity in kilowatts. Contracts will be awarded from the bottom up to the tenders with the lowest rates until the total volume put out for tender has been reached.
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