Answers to Questions about Photovoltaic Systems in Germany

Since the implementation of the Renewable Energy Act in the year 2000, the solar power industry has gone through a lot of turbulent times. For example, before the collapse in 2012, a lot of German companies in the industry experienced ascension into the global leadership of solar power.

However, even as a country with the least amount of sunshine, Germany is one of the most productive in terms of solar power outputs. The capacity installed was over 49 gigawatt (GW) as at 2019. According to the International Energy Agency (IEA), Germany ranks fourth amongst the solar power producers in the world after being in the lead for several years.

Unlike the conventional energy system that focuses on big producers, numerous solar panel operators have become the pillar of the German solar energy system. About 8% of the country’s net power consumption was produced by companies like Evergieversum as well as other similar companies in the industry.

Is Photovoltaic (PV) Power Expensive?

Is Photovoltaic (PV) Power Expensive

The answer to this question is that it depends on what it is being compared to. When compared to fossil and nuclear power it is more difficult to give an accurate comparison. This is because risks and external costs such as climate, health and environmental damage are not taken into account when pricing.

The lack of addition of these extra costs causes a large percentage of subsidies to the pricing of fossil and nuclear power. The costs are generally made up of the two parts which are, fixed cost and marginal costs. The fixed cost covers power generation while the marginal cost covers fuel provision but does not cover the neutralization process of waste and pollution emissions such as CO2, NOx, Hg, SOx.

The renewable energy act was enacted for the promotion of the transformation of energy and stimulation of investments in photovoltaic systems. It is beneficial in helping an operator run the plant at a price that will generate good profit as well as certainty of making sales.

This Act also aims at the reduction of LCOE from RE by creating a big enough market for RE systems. In evaluating PV transformation cost, factors such as its generation capacity are considered. However, PV has gradually become system-relevant giving rise to new and different types of costs.

Therefore, in addition to the cost of generation of electricity, there are also costs for developing grid-serving storage as well as its conversion capacities, as well as tearing down of the nuclear and coal-fired plants. All of these add up to the cost of energy transformation and not the PV expansion.

Without the knowledge of the cost of an exempted energy transformation, it can prove difficult to evaluate the cost of energy transformation of a PV system. You can check here

Is Photovoltaic Power Subsidized?

Subsidy is considered to be a benefit gotten from public funds. Up until the year 2020, the generation of subsidy for PV did not come from public funds but from a selective consumption levy whose application is to self-produced and consumed PV electricity. The consumers of this energy make compulsory payments used for the transformation of the energy system.

The amount of payment does not represent the total remuneration, but the differential costs.  The total cost paid for the PV power fed into the grid up until 2020 is about a hundred million euro. For the first time in 2021, contributions are made by the federal government’s energy and climate fund.

Since the revenues from the energy and climate fund are from federal subsidies and emissions trading, a partial subsidy has been in place since 2021.

What is the Effect of PV systems on Ecologically Valuable Area?

One of the topics that is often talked about is whether the photovoltaic system has a bad effect on ecologically valuable areas. The answer to that question is no it does not; on the contrary, it aids renaturation. Take for example an area that was previously used for intense agricultural practices like energy crop cultivation.

If this area is converted to grassland and a PV system is mounted on it, then there is an increase in biodiversity. In the case of a ground mounted PV system, fertilizers are not used so that more fragile plants have a chance.

Since the areas surrounding it are properly fenced, the area is protected from unauthorized access, which makes it a good environment for ground breeders. By making little adjustments to the system, further improvements can be achieved.

The German Federal Agency for Nature Conservation says that, a peatland soil expands over 1.4 million hectares.

About 50% of this space is used as grassland and more than 25% is used as arable land. The draining process of peatlands for the purpose of intensive agricultural use has led to a significant rise in CO2 emissions. On the other hand, adapted PV power plants on used peatlands with low occupancy density could provide yield without intensive agriculture in the area.


The growth in the solar power industry in Germany cannot be over emphasized. This is despite the disadvantage of being one of the countries with the least amount of access to sunshine. However, with the increase in popularity of the use of photovoltaic there are also questions that need to be answered in order to have a better understanding of its effect on the human standard of living.