Solar power in Germany consists almost exclusively of photovoltaics (PV) and accounted for an estimated 6.2 to 6.9 percent of the country's net-electricity generation in 2014. The country has been amongst the world's top PV installer for several years, with total installed capacity amounting to 40,782 megawatts (MW) by the end of November 2016, behind 1. China and ahead of 3. Japan, 4. United States 5.Italy, and 6. UK .
About 1.5 million photovoltaic systems are installed all over the country, ranging from small rooftop systems, to medium commercial and large utility-scale solar parks, that altogether contributed 35.2 terawatt-hours (TWh), or about 6.9 percent in 2014 (preliminary estimate). This brings the country's share of renewable electricity to about 31 percent, and in line with the official governmental goal of reaching 35 percent by the end of the decade. However, new installations of PV systems have declined steadily since the record year of 2011 and continued to do so throughout 2015. It's estimated that about half of the country's jobs have been lost in the solar sector in recent years. While proponents from the PV industry blame the lack of governmental commitment, others point out the financial burden associated with the fast paced roll-out of photovoltaics, rendering the transition to renewable energies unsustainable in their view.
The official governmental goal is to continuously increase renewables' contribution to the country's overall electricity consumption. Long-term minimum targets are 35% by 2020, 50% by 2030 and 80% by 2050. The country is increasingly producing more electricity than it needs, driving down spot-market prices and exporting its surplus of electricity to its neighboring countries (record exported surplus of 32 TWh in 2013 and 34 TWh in 2014). Paradoxically, a decline in spot-prices may well raise the electricity prices for retail customers, as the spread of the guaranteed feed-in tariff and spot-price increases as well. As the combined share of fluctuating wind and solar is approaching 17 percent on the national electricity mix, other issues are becoming more pressing. These include, adapting the electrical grid, constructing new grid-storage capacity, dismantling and altering fossil and nuclear power plants – brown coal and nuclear power are the country's cheapest suppliers of electricity, according to today's calculations – and to construct a new generation of combined heat and power plants.
The nation's largest solar farms are located in Meuro, Neuhardenberg and Templin, with capacities beyond 100 MW. Also, concentrated solar power (CSP), another solar power technology that does not use photovoltaics, has virtually no significance for Germany, as this technology demands much higher solar insolation. There is, however, a 1.5 MW experimental CSP-plant used for on-site engineering purposes rather than for commercial electricity generation, the Jülich Solar Tower owned by the German Aerospace Center. Moreover, solar heating does not use solar energy for power generation and is therefore not included in this article.
The German solar PV industry installed 7.6 gigawatts (GW) in 2012 and 7.5 GW in 2011, and solar PV provided 18 TWh of electricity in 2011, about 3% of total electricity. On midday of Saturday May 26, 2012, solar energy provided over 40% of total electricity consumption in Germany, and 20% for the 24h-day. The federal government has set a target of 66 GW of installed solar PV capacity by 2030, to be reached with an annual increase of 2.5–3.5 GW, and a goal of 80% of electricity from renewable sources by 2050. From 3.5 GW to 4 GW are expected to be installed in 2013. Solar power in Germany has been growing considerably due to the country's feed-in tariffs for renewable energy which were introduced by the German Renewable Energy Sources Act. Prices of PV systems have decreased more than 50% in 5 years since 2006.
As of 2012, the feed-in tariff (FiT) costs about €14 billion (US$18 billion) per year for wind and solar installations. The cost is spread across all rate-payers in a surcharge of 3.6 €ct (4.6 ¢) per kWh (approximately 15% of the total domestic cost of electricity). On the other hand, as expensive peak power plants are displaced, the price at the power exchange is reduced due to the so-called merit order effect.
Germany set a world record for solar power production with 25.8 GW produced at midday on April 20 and April 21, 2015.
According to the solar power industry, a feed-in tariff is the most effective means of developing solar power. It is the same as a power purchase agreement, but is at a much higher rate. As the industry matures, it is reduced and becomes the same as a power purchase agreement. A feed-in tariff allows investors a guaranteed return on investment - a requirement for development. A primary difference between a tax credit and a feed-in tariff is that the cost is borne the year of installation with a tax credit, and is spread out over many years with a feed-in tariff. In both cases the incentive cost is distributed over all consumers. This means that the initial cost is very low for a feed-in tariff and very high for a tax credit. In both cases the learning curve reduces the cost of installation, but is not a large contribution to growth, as grid parity is still always reached.
More than 7 GW of PV capacity had been installed annually during the record years of 2010, 2011 and 2012. For this period, the installed capacity of 22.5 GW represents almost 30 percent of the worldwide deployed photovoltaics. Since 2013, the number of new installations declined significantly due to more restrictive governmental policies. Germany is projected to lose its leading position as the world's largest producer of photovoltaic electricity to China before the end of the decade.
Since the end of the boom period, national PV market has since declined significantly, due to the amendments in the German Renewable Energy Sources Act (EEG) that reduced feed-in tariffs and set constraints on utility-scaled installations, limiting their size to no more than 10 kW.
The current version of the EEG only guarantees financial assistance as long as the overall PV capacity has not yet reached 52 GW. It also foresees to regulate annual PV growth within a range of 2.5 GW to 3.5 GW by adjusting the guaranteed fees accordingly. The legislative reforms stipulates a 40 to 45 percent share from renewable energy sources by 2025 and a 55 to 60 percent share by 2035.
As of November 2016, tenants in North Rhine-Westphalia (NRW) will soon be able to benefit from the PV panels mounted on the buildings in which they live. The state government has introduced measures covering the self-consumption of power, allowing tenants to acquire the electricity generated onsite more cheaply than their regular utility contracts stipulate.
Approximately 9 GW of photovoltaic plants in Germany are being retrofitted to shut down if the frequency increases to 50.2 Hz, indicating an excess of electricity on the grid. The frequency is unlikely to reach 50.2 Hz during normal operation, but can if Germany is exporting power to countries that suddenly experience a power failure. This leads to a surplus of generation in Germany, that is transferred to rotating load and generation, which causes system frequency to rise. This happened in 2003 and 2006.
However, power failures could not have been caused by photovoltaics in 2006, as solar PV played a negligible role in the German energy mix at that time. In December 2012, the president of Germany's "Bundesnetzagentur", the Federal Network Agency, stated that there is "no indication", that the switch to renewables is causing more power outages. Amory Lovins from the Rocky Mountain Institute wrote about the German Energiewende in 2013, calling the discussion about grid stability a "disinformation campaign".
Germany has about the same solar potential as Alaska, which has an average of 3.08 sun hours/day in Fairbanks.
The history of Germany's installed photovoltaic capacity, its average power output, produced electricity, and its share in the overall consumed electricity, shows a steady, exponential growth for more than two decades. Solar PV capacity doubled on average every 18 months in this period; an annual growth rate of more than 50 percent.
Germany is made up of sixteen, partly sovereign federal states or Länder. The southern states of Bavaria and Baden-Württemberg account for about half of the total, nationwide PV deployment and are also the wealthiest and most populous states after North Rhine-Westphalia. However, photovoltaic installations are widespread throughout the sixteen states and are not limited to the southern region of the country as demonstrated by a watts per capita distribution.
Some companies have collapsed since 2008, facing harsh competition from imported solar panels. Some were taken over like Bosch Solar Energy by SolarWorld. Major German solar companies include: