Thüga Erneuerbare Energien (THEE) , the renewables group of the Thüga network of municipal utilities, and private equity group CEE have signed a memorandum of understanding to jointly build and operate about 500MW of ground-based solar PV arrays in Germany without subsidies.

The two Hamburg-based companies stressed that a decline in solar production prices and Thüga as partner for long-term power purchase contracts help making such developments possible.

“In regards to the Energiewende [energy transition] it is remarkable that large ground-based solar farms meanwhile can be operated without state support through long-term power purchase agreements,” said Björn Keßel, director for business development at CEE.

Germany has been at the core of a solar power revival in Europe, following price declines and a lifting of EU trade measures on Chinese-made solar panels, adding nearly 3GW in capacity last year.

As support levels for larger solar arrays are declining as a result of competitive tenders and subsidies are slated to end within one or two years, first subsidy-free solar farms are being planned in Germany. Utility EnBW in February announced plans for the construction of a 175MW PV array in the north-eastern state of Brandenburg without support.

“Solar energy due to nowadays very cheap production costs is the technology of choice when it comes to set up first support-free large projects in Germany with long-term power purchase contracts,” said THEE managing director Thomas Walther.

THEE’s development portfolio is being fed by projects of cooperation partners and own projects, for example on locations of wind farms operated by it, added Klaus-Peter Lehmann, managing director at the project development company of THEE.

THEE and CEE are already developing subsidy-free projects in the eastern states of Mecklenburg-Vorpommern and Brandenburg that are slated to be built as of next year.