How did Germany become one of the largest producers of solar energy?

SAARBRÜCKEN, GERMANY. For years, we have watched the world looking for renewable energy alternatives and ways to reduce the impact on the environment, but much still needs to be done so that the ideal goals are achieved. 

Since the 1970s, with the oil crisis, a non-renewable and exhaustible source of energy, research in the renewable energy sector, such as wind and solar, has increased. Furthermore, nuclear accidents, such as Chernobyl, made Germany rethink other sources of electricity.  

At the end of the 1980s, photovoltaic energy was intensely studied by countries such as Germany, the USA and Japan, but this form of production was still considerably expensive. 

However, as a means of driving changes in the energy system, these countries began to invest in government subsidies, increasing the possibility of investment in renewable resources and, consequently, accelerating growth in the sector. 

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Going back a few decades, in Germany, before the fall of the Berlin Wall, the country was divided into two sides, a rupture that also affected the way the population consumed energy. 

If the main coal plants were located on the East German side, a fossil material used as one of the country's main sources of electricity, on the Western side, the country maintained nuclear energy. 

Decades after the fall of the Berlin Wall and the reunification of the country, Germany seeks to gradually eliminate what were once the main means of generating energy in the country: coal and atomic energy. 

From that moment on, Germany began its energy transition project, which was called “Energiewende”. This change aimed to reduce the frequent use of fossil energy sources, such as coal, oil, natural gas and nuclear, in addition to investing in renewable sources, such as wind, hydroelectric, solar, geothermal or biomass. 

Photovoltaic installations: from decline to rise

At the end of the 90s, the German government launched the 1000 “roofs” photovoltaic program, which aimed to finance the solar energy sector. In a four-year period, between 1991 and 1995, around 2000 photovoltaic systems were installed on residential roofs. 

With an average size of just 2.6 kWp and a cost of over 12 thousand euros, the installations were subsidized at 70% by the German government and the other part covered by the companies responsible for the installations. 

However, with the implementation of the incentive that provided a benefit of just 8.6 cents per kWh, a cost much lower than the production cost, which was 90 cents per kWh, the number of installations began to decline. 

Despite the decline, the sector followed a different path from 1998 onwards, when the country encouraged support for renewable energy policies, aiming to replace, by 2050, energy supply in Germany with sustainable energy; photovoltaic, wind, hydroelectric and biogas. The intention is that these sources will be responsible for up to 80% of the electricity generated in the country. 

In 2000, the Renewable Energy Law (EEG) came into force, which determines the end of nuclear sources and enhances the incentive for sustainable energy. The expansion of renewable energy is a central pillar of the energy transition in Germany.

Within the new law, incentive programs were created for companies, such as determining a fixed value of approximately 51 cents, for 20 years, for each solar kilowatt-hour produced for the public grid. Another alternative was to obtain credit through the “100,000 roofs” program, which was part of the credit for reconstruction.

After the end of the incentives under the Renewable Energy Law, discounts were also allocated to consumers who purchased solar panels at the beginning of 2004, receiving from the government an amortization rate of 5% for the next 20 years, in the energy feed-in tariff, which had a positive effect on the photovoltaic sector.

Since it came into force, the Renewable Energy Law (EEG) has been continuously developed, undergoing changes in 2004, 2008, 2012, 2014, 2017 and, finally, in 2021. In the last reform, the expansion of the use of renewable energy (RE) in the electricity sector: by 2030, 71 GW of onshore wind energy, 100 GW of photovoltaic energy and 8.4 GW of biomass plants will be installed. This means that 65% of electricity consumption should come from renewable energy by 2030. 

Nowadays, Germany offers federal and state subsidies for the installation of photovoltaic systems in private homes and companies. These incentives can range from energy feed-in tariffs, where the price per kWh remains the same for a period of 20 years, to low-interest loans, as well as subsidies for energy supply companies. 

Among the incentive programs, not all are available to individuals or legal entities, it is necessary to analyze which subsidy offer best fits a given project. 

With the gradual closure of nuclear plants and the reduction in fossil energy consumption, renewable sources have become one of the country's main means of energy production. According to Fraunhofer, Europe's largest solar energy research institute, Germany has almost 2 million solar installations that provide around 10% of the electricity produced in the country. 

From 2018 onwards, the solar market began to recover from the collapse experienced by the sector in previous years and, in 2020, the capacity of photovoltaic systems increased. 

The growth in the use of this renewable energy prevented almost 30 million tons of carbon dioxide from polluting the environment in 2019 alone, according to data released by the German Federal Ministry of Economic Affairs and Energy.

Green policy

Increasingly, the German population demands public policies that seek to reduce the impact that society is having on the environment. Therefore, climate issues have constantly become one of the main political discussions within the country. 

It is no surprise that the party “Die Grünen” (The Greens) has managed to reach a considerable number of voters and supporters, with relevant agendas on the climate, even competing with the CDU (Christian Democratic Union), the party of the current Federal Chancellor Angela Merkel. 

The green party is a great enthusiast of renewable energy sources, even encouraging the use of solar energy as a clean source of electricity. 

Among the party's goals is the construction of 1.5 million rooftops with solar installations by 2022, from public to commercial buildings, in addition to the construction of new solar plants close to highways, railway lines, parking lots or in conjunction with the agricultural industry .

With the recovery of the solar sector, mass awareness of climate issues, public policies and investments, Germany is able, despite having fewer hours of sunshine than Brazil, to be one of the largest producers of solar energy per capita. 

With the fall in installation costs, the photovoltaic system has become one of the attractive means for those who wish to invest in renewable energy and generate their own electricity, in addition to cost and benefit issues, within a country where spending on heating, during the months cold, it is considerably high. 

According to “EMBER”, a non-profit group that provides data, analysis and policy solutions to accelerate the global electricity transition, the supply of solar energy in the European Union in 2021 reached a record 10% of the total electrical energy produced in bloc countries.

Of the 27 countries that are part of the Union, eight broke their own record, including Germany. The data shows that the country maintained the highest solar energy production in the region, reaching 13.4 TWh, which represents 17% of all energy produced in the summer of the current year.