Renewable Energy Sources Act 2021: Making On-Site Consumption Attractive

News – February 22, 2021

The German Solar Association (BSW Solar) recently reported that the number of solar roofs installed in Germany in 2020 had risen by 25 percent compared with the previous year. The driver of this boom are lower investment costs for PV and storage systems as well as the fact that on-site consumption, including for charging electric cars and operating heat pumps, is an attractive option.

The amended German Renewable Energy Sources Act (EEG), which came into force on January 1, 2021, makes on-site consumption even more worthwhile, especially for smaller and medium-sized PV installations. Under the revised law, operators of new installations of up to 30 kilowatts (kW) no longer have to pay the EEG levy on the electricity they use themselves, as long as the annual own consumption rate does not exceed 30 megawatt hours. The new EEG even exceeds the specifications of the EU’s Renewable Energy Directive (RED II)by providing operators with remuneration for excess electricity.

In contrast to the government’s original plans, on-site consumption remains an option for larger commercial installations ranging in size from 300 to 750 kW should the operator choose not to participate in tenders. However, the EEG payment is only available for half of the electricity fed into the grid, a decision which has been criticized by BSW Solar. Systems with a very high own consumption rate are especially profitable, since they are not affected by this restriction. Operators of rooftop systems with an installed capacity of more than 750 kW are required to participate in tenders, where they will be eligible to win a market premium. On-site consumption is prohibited in this case.

Following amendments by the German parliament and federal council, the EEG 2021 now includes reliable regulation for the continued operation of systems that are over 20 years of age and no longer eligible for subsidies. Operators can continue to feed electricity into the grid and will be compensated based on the annual market value on the electricity exchange. This regulation also benefits those who consume electricity on-site. Grid operators, who remain responsible for marketing, can deduct an allowance for expenses from the annual market value.

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