German government set for U-turn over plan to scrap storage incentive

In a reversal of earlier plans by energy minister Sigmar Gabriel, Germany's government is preparing to extend an incentive programme for PV storage systems, but in a modified form, according to legislators and the energy ministry.

The programme, supported by subsidised loans from German development bank KfW and introduced in 2013, is scheduled to run out at the end of this year.

In a letter to lawmakers much criticised by the solar sector, Gabriel earlier this month had said he plans to end the successful programme as it already had fulfilled its purpose of supporting a market introduction of PV battery storage.

But as the German PV industry is just in the course of recovery and the power market in the need of flexibility options, the economics ministry is intensively discussing incentives for battery-based storage, Social Democratic (SPD) lawmaker Thomas Jurk said in parliament on Thursday.

"The result will probably be a new programme that is adapted to current requirements of the electricity market," he said during a speech.

The SPD is the junior coalition partner in the government of Chancellor Angela Merkel, a Christian Democrat (CDU). The energy ministry confirmed to Recharge that it is working on a modified programme, but couldn't tell yet for how long it will be in effect, or when exactly it will kick in.

Julia Verlinden, a member of parliament from the opposition Green Party, welcomed the turnaround, and stressed that thanks to 10,000 storage systems aided by the current incentive programme prices for domestic electricity storage have already fallen by 25%.

"Each euro from the incentive programme mobilises seven euros in investments," Verlinden said.

Germany's solar federation BSW had also lobbied for a continuation of the scheme that costs tax payers a mere €25m ($26.5m) per year.

"Germany now has a chance to expand on its system leadership in this giant global market of the future," BSW managing director Carsten Körnig says.

The BSW in recent weeks had called upon lawmakers to extend the incentive programme for another three years.

The German storage programme is one of only a few public programmes across the world to support solar storage, and has been hailed as a success by increasingly successful Germany-based storage specialists such as Younicos.