After being held up for almost a year, the German parliament decided to pass Solar Package I on April 26, 2024 – this development includes significant improvements for the solar and storage industry that are expected to come into force soon. The aim of this package of measures is to accelerate the expansion of solar energy from 14.8 GWp of installed PV capacity in 2023 to 22 GWp per year from 2026. The revelation that a special 60 billion euro pandemic fund is not allowed to be reallocated to the climate fund triggered both a budget crisis for the German government and uncertainty about the Solar Package’s progress.
“It took a little longer than we’d have liked,” stated Carsten Körnig, CEO of the German Solar Association (BSW-Solar) during the Intersolar Europe Webinar on Solar Package I on May 30, 2024 (Webinar Language: German). Mr. Körnig went on to express general satisfaction, however, with the results of the reform package, explaining that significant improvements are to be made where ground-mounted and roof-mounted systems, balcony PV, energy storage, PV in the commercial sector, joint supply for buildings and tenant power are concerned, as well as with the repowering of pre-existing systems.
Although the use of ground-mounted PV systems grew by 45 percent from 2022 to 2023, the target growth rate for annually installed PV capacity in this sector remained at 40 percent in 2023. The expansion is to be accelerated by opening up an extensive amount of spaces, which will now as a rule include what are known as “disadvantaged areas”. The reform of the right of way is another element of Solar Package I and is intended to speed up the expansion of ground-mounted systems. This concerns connecting ground-mounted systems to the nearest interconnection point. Under reasonable circumstances, land and real estate owners must now allow cables to be laid and maintained on their properties – however, the amendment to the right of way has been written in such a way that it only applies to publicly owned land.
A separate sub-segment for invitations to tender in agricultural PV, floating PV, parking lot PV and wetland PV is now available under the “special solar installations” category. The increase in the maximum value to 9.5 cents/kWh and the inclusion of vertical agricultural PV are encouraging. It is important to note that parking lot PV always takes precedence over other special solar installations and any other bids in the multi-stage tender award procedure.
Solar Package I defines completely new minimum nature conservation criteria that is to apply to all subsidized ground-mounted systems.
PV usage in the commercial sector has picked up speed in Germany – the enormous potential here had long been untapped as it had not been considered particularly profitable before. In 2023, however, the commercial market experienced 92 percent growth compared to the previous year. Solar Package I aims to encourage this development further. The feed-in tariffs for systems between 40 and 750 kWp have been increased from 6.14 to 7.64 cents/kWh, and the tender volume has also been increased this year from the previous 900 MW to 1,400 MW, gradually rising to 2,300 MW by 2026.
The costly obligation for system certification, which has hindered the implementation of many systems in the past, will now start at 500 kWp generation capacity or 270 kWp feed-in capacity. In future, the Low Voltage Directive, and not the Medium Voltage Directive, will apply as the basis for grid connection. This will simplify the process considerably. Moreover, the direct marketing obligation will be made more flexible, which is highly relevant for the commercial sector – feed-in tariffs will not be remunerated, until the end of 2025 for installations up to 400 kWp, and from 2026 for new installations up to 200 kWp. This has the advantage that systems over 100 kWp, which have high self-consumption, will be allowed to feed in the remaining quantities without remuneration in future instead of being forced to enter into more costly direct marketing.
Until now, the concept of tenant power has not succeeded in unlocking the potential multi-family dwellings have. Indeed, the plant operator’s obligations here were deemed too complicated and extensive. This is now set to change with the introduction of joint supply for buildings. The system operator’s obligation to supply the household will be removed, and both a simplified supply and quarter-hourly balancing promise to make solar projects increasingly attractive for multi-family dwellings. The remaining electricity can now be purchased simply by taking out individual electricity supply contracts with local utility companies. The potential is huge – the German Solar Association believes that this will eventually apply to 6.4 million smaller multi-family dwellings with between 2 and 12 residential units.
There are also changes to the concept of tenant power as it exists now because, with the adoption of Solar Package I, this will additionally be applied in the commercial sector and will additionally be extended to outbuildings.
The popular plug-in solar devices can be connected to the grid even more easily in future – the registration procedure has been simplified and the devices can now also be put into operation before the meter is replaced. As a separate system category in the Renewable Energy Sources Act, there is no longer any need to be wary of cable pooling with other PV installations in the house up to 2000 W PV capacity.
There have been important changes in the area of storage and the feed-in of stored green electricity. If green electricity is fed into the grid at a later date, payment is now still made for electricity generated under the Renewable Energy Sources Act and not for unsubsidized stored electricity. This is relevant for directly marketed systems because, here, the market premiums can be received and higher revenue can simultaneously be achieved thanks to the varying electricity exchange prices. Furthermore, it will be possible to switch between grid reliance and direct marketing at much shorter intervals in future.
The adoption of Solar Package I also brings good news for old systems – what is known as the market value pass-through will be extended until 2032; up to an output of 100 kWp, the grid operator shall market the solar power minus a fee and forward the proceeds to the operator. Repowering, the replacement of disused PV modules in the home system sector, has also been simplified. In future, components may be replaced without affecting existing remuneration entitlements – if additional output is installed, this will be remunerated as a new system.
Last but not least, it has become easier to connect systems up to 30 kWp to the grid. In future, this may be done independently if the grid operator does not respond to the grid connection request within 4 weeks and to the grid compatibility check within 8 weeks.
Intersolar Forum:
Solar Package I and other recent solar use reforms in Germany
Friday, June 21, 2024, 10:25am–12:00pm
Messe München, hall A3, booth A3.15
