Forum Solarpraxis: German storage subsidies likely to continue

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The 16th Forum Solarpraxis opened its doors today in Berlin, Germany, to around 750 attendees, 100 more than the previous year. Reflecting its growing importance in the solar sphere, energy storage was top of the agenda, and was addressed in the opening conference session.

To the surprise – and delight – of the audience, Volker Hoppenbrock from Germany’s Federal Ministry of Economy, said a parliamentary budget committee was currently discussing the extension of storage subsidies, which are currently on track to expire this December 31.

He said that while a timeframe has not set regarding final decisions, it appears likely the subsidies will be extended for another three years. The news will no doubt be welcomed by the industry, with many having forecast a downturn in the sector on the back of the funding shutdown. Indeed, EuPD Research told pv magazine earlier this week its head of economics Martin Ammon calculated that in 2016, storage market growth will drop to 13% without the subsidies.

Also under discussion are more regulations, which will increase grid integration of the energy storage systems. Currently, they are not permitted to feed in more than 60%; this will likely be reduced. Furthermore, one must pay to store energy on the grid and then again to release it. The government is also looking to change this.

A new EEG (German renewable energy law) will be released in 2017, with discussions on the amendments taking place next year. The focus will be on tender procedures, instead of FITs, for renewables.

In an interesting development, from 2017, the EEG will be expanded to include electricity from abroad. Specifically, 5% of the tendered volumes will be open to generating electricity outside of Germany. Requirements including a principal of repricrocity with the chosen country, and the physical import of energy will exist.

To see if the idea is feasible, 2016 will see a pilot tender launched for ground-mounted solar PV projects in either Luxemburg or Denmark. Negotiations are currently underway to see which country will be chosen. Comments were made on the fact that ground-mounted PV was a strange choice in these countries, given that they are so much more expensive there than in Germany.

The question was also posed to Hoppenbrock of whether the law will be changed to enable the solar PV industry to reach the already determined goals of 2.5 GW of new annual installed capacity, which are currently being missed – 2015 is set to install just over 1 GW.

He replied that a flexible FIT mechanism is already in place, which adjusts to reflect installation amounts. As Karl-Heinz Remmers, owner of Solarpraxis pointed out, however, FITs are currently stagnating, indicating that the mechanism is not working.

According to a draft of the new EEG, which has not yet been published, it is being considered that the cap on installations should react more quickly to market changes. As such, it is planned that the tariff will depend on what has been installed in the last six months, instead of the current 12 months. If cumulative capacity is under 2 GW, then the subsidies will not be reduced more slowly.

Legal frameworks

Echoing sentiments from Friends of the Earth (FOE), which stated in a recent report that the financing for transforming the energy landscape to renewables exists, but that the political will is "shockingly" absent, German lawyer, Florian Valentin from Bredow Valentin Herz said that the creative brains are available to change the current legal framework surrounding Germanz’ EEG, but that the political will is lacking.

He added that a new energy world does not fit with old energy legislation – and this needs to be dealt with in a legal framework. Karl-Heinz Remmers said that a framework needs to be built around decentralization.

New business models

Gerard Reid from Alexa Capital spoke on the crossover of storage from the auto industry to solar. He said a technology revolution needs new business models. The 4 S’ – semiconductors, storage, solar and software – will drive that change. Electricity is becoming increasingly important, he said, while solar+storage is making electricity more available and, thus, more valuable. Everything will be connected, he added.

Reid went on to outline 8 new business models for the energy revolution. These included: (i) energy as a service (look at SolarCity or GE’s new Current startup): (ii) Monitoring and customer specific services; (iii) Flat rates for electricity; and (iv) an increase of aggregators in the market (look at Next Kraftwerk and Movility House). These new ways of doing business can evolve very quickly, he added.