Promotion of solar farms: Low amount of funding necessary

Competition through market-based auctions is effective: since being determined by way of auction, the amount of public funding to be provided for electricity generated from solar farms has continuously fallen. The last round of the pilot phase in December 2016 brought the amount of funding received to all-time low.

Competition through market-based auctions is effective: since being determined by way of auction, the amount of public funding to be provided for electricity generated from solar farms has continuously fallen.© Federal Ministry for Economic Affairs and Energy; data from Bundesnetzagentur

The pilot phase for solar farms which was finished at the end of 2016 has clearly shown that calls for tenders can lead to lower support costs for renewable energy: In the first auction round in April 2015, the average award level amounted to 9.17ct/kWh. In the sixth auction round in December 2016, the average award level fell to 6.90 ct/KWh. This corresponds to a reduction of approx. 25 per cent.

Auctions will now also be held for wind power and biomass

The market-based auctions which have been carried out regularly since the beginning of 2017 are also expected to help lower the cost of supporting renewable energy. The basis for this is the 2017 Renewable Energy Sources Act. Besides solar, the focus is on on and offshore wind power. In future, the amount of funding to be provided for biomass installations will also be determined by way of auctions (for more information on this, please click here).