Bundestag to vote on EEG

Germany's lower house of parliament, the Bundestag, is slated to vote on a reform of the Renewable Energies Act (EEG) that next to annual caps for the expansion of wind and solar also introduces the much-criticised payment of a levy on self-consumed energy that may hit the PV industry hard. 

After some last-minute fine-tuning, Chancellor Angela Merkel's Christian Democrats (CDU), her Bavarian allies from the Christian Social Union (CSU)  and the Social Democrats (SPD) of energy minister Sigmar Gabriel today agreed on a final version of the legislation.

Under the draft, operators of new renewable installations with a capacity of more than 10kW will for the first time have to pay part of a surcharge to finance the expansion of renewables (EEG surcharge) also for energy they consume themselves, a levy dubbed "solar tax" by the industry.

Under the latest and probably final version of the EEG reform, operators of renewables installations until the end of 2015 will have to pay 30% of the EEG surcharge that now stands at €0.062 ($0.084) per kilowatt hour, in 2016 35%, and from 2017 on 40% of it, or about €0.025 per kWh.

"We are shocked and deeply dismayed how the Energiewende and the common good is being trampled on," says Carsten Körnig, managing director of Germany's solar industry federation BSW.

"Instead of protecting citizens from the consequences of climate change and push ahead with the Energiewende, politics is protecting the interests of some few fossil energy corporations."

Coalition parties in their last meeting reintroduced an exemption for installations of up to 10kW, which in practice means that most rooftop PV won't have to pay the solar tax.

The levy could, however, severely slow down the development of a growing market for PV for self-consumption by businesses and industry.

The BSW now appeals to the Bundesrat, the less-influential upper house of parliament in Germany, to stop the reform in its current form.

It is unlikely, however, that the Bundesrat will be able to do that as a two-thirds majority would be required. But the upper house could slow-down the passage of the proposal and impede it from becoming law on 1 August, as the government envisages.

Next to the solar tax, the proposal also includes an annual cap of 2.5GW for the expansion of onshore wind, as well as a reduction of onshore feed-in tariffs (FITs).

The reformed EEG for the first time also stipulates a cap on the expansion of renewables' share of Germany's electricity output of 45% by 2025, and of 60% by 2035, up from around 25% now.

The legislation also lowers the target for offshore wind to 6.5GW in 2020 from 10GW previously planned, and to 15GW in 2030, down from 25GW previously targeted.

On the upside for offshore wind, it also extends the so-called compression model for offshore FITs for another two years until end-2019.

That gives operators of offshore parks the possibility to opt for higher FITs for the first eight years of operation in order to meet elevated initial investment costs.