News
15 Sep 2022, 13:46
Sören Amelang

Germany pushes solar with tax breaks and PV “crisis tender”

dpa / Süddeutsche Zeitung / Clean Energy Wire

The German government is introducing tax breaks for the operation of small-scale photovoltaic systems and removing other bureaucratic hurdles to speed up the rollout of renewables. Income from systems with a capacity of up to 30 kilowatts will be exempt from income tax, and the delivery and installation will no longer be subject to VAT under certain circumstances. Many citizens have so far shied away from solar plants for bureaucratic reasons, finance minister Christian Lindner said, according to a report by newswire dpa carried by the Süddeutsche Zeitung. Lindner said the regulatory changes provided "a real, very strong additional incentive in the tax system" for citizens to install solar PV arrays on their roofs.

The government also agreed to relax a number of other regulations to give renewables a push in order to help save gas. "We allow additional feed-in of wind energy and photovoltaics, remove limitations and give additional incentives for electricity production from biogas," explained Federal Economics Minister Robert Habeck of the Green Party. Grid expansion is also to be accelerated and transport capacity increased, he said. The cabinet also approved a solar “crisis tender” with a total capacity of 1.5 gigawatts in January, where successful bidders must take their arrays online within nine months. The energy ministers of Germany’s states have called for making the installation of solar power mandatory for new buildings not only in the country, but also in Europe. 

Carsten Körnig, head of the German Solar Industry Association (BSW), warned the current "location corset," caused by tight restrictions at the state level for designating land to solar power plant construction, would slow solar extensions. Körning said the current framework "is out of date and is curbing the expansion of solar energy, while the lights could go out in Germany." Without an adjustment of the tender conditions, "future solar tenders are likely to be undersubscribed regularly," he said.

Auction volumes for solar and wind power installations were increased as part of Germany’s push to reach its goal of 100 percent renewable electricity by 2035, an aim that has only been strengthened by the need for greater energy independence following Russia’s attack on Ukraine. Wind power auctions have repeatedly been undersubscribed in recent years and only managed to fully auction off planned volumes in the past months. Solar power auctions on the other hand have so far mostly been oversubscribed, although an undersubscribed solar tender in August raised concerns that investor interest could lag behind projected levels.

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