High PV system prices, falling FITs make small solar unviable in Germany


From pv magazine Germany

Anyone in Germany who wants to put a small-scale PV system into operation in November 2021 must expect electricity generation costs of €0.1152 ($0.13)/kWh and a feed-in tariff (FIT) of €0.0703/kWh.

The combination of high PV system prices and falling FITs could extend the payback period for new residential projects to up to 22 years by as early as 2023, according to EUPD Research. In a recently published report, it studied the potential impact on the German market and made a short-term growth forecast up to 2023.

It said that residential projects up to 10 kW in size will only be viable through the highest possible self-consumption rate. It said that it expects the installation of significantly smaller systems.

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EUPD Research also said that a one-time increase in the FITs should be promptly introduced to compensate for the high subsidy degression of the past few months. And a looming short-term market slump must be prevented via reforms for the FIT degression mechanism.

In addition, further measures will be needed to strengthen the German PV market, such as raising the tender limit for rooftop PV systems, expanding the tax-free self-consumption of solar power, removing bureaucratic barriers, and establishing long-term planning security for system operators.

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