German Industry Embraces Rooftop Solar – CleanTechnica

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Lots of things changed in Europe when supplies of cheap methane gas from Russia were cut off more than two years ago. Suddenly the cost of electricity soared as supply declined, which had a significant negative effect on businesses all across the Continent. But while losing access to Russian methane was painful, it spurred a pivot to renewable energy systems like rooftop solar that astonished skeptics. The changeover to clean energy has been encouraged by robust policy support from European governments, with Germany being a leader in that area. It is pushing forward with plans to obtain 80% of its electricity from renewables by 2030 — one of the most ambitious targets of any industrialized nation. Part of that initiative is a feed-in tariff that pays renewable energy providers €9.3 for every kWh of green electricity supplied.

That feed-in tariff — coupled with low prices for solar panels — has helped create a boom in rooftop solar installations by small and medium sized businesses in Germany. Industrial and commercial solar installations were up 81% in the first quarter of 2024 and applications for large rooftop solar systems to get connected to the electrical grid are up 107% year over year. Businesses consumed almost 70% of Germany’s national electricity in 2023, according to data by BDEW, the German utilities association.

“As electricity prices in Germany show no signs of decreasing as previously anticipated, companies are increasingly recognizing the economic viability of installing solar panels,” said Marie-Theres Husken, an energy expert at BVMW who specializes in small- and medium-sized businesses. Although Germany has Europe’s biggest capacity of solar and wind power generation, those companies have yet to benefit from lower electricity prices because of high grid fees and taxes they must pay. By generating their own solar power, they can avoid those fees and taxes and gain the benefit of stable prices for electricity.

Tridelta is a German company located in the German state of Thuringia that specializes in technical ceramics, magnetism, sintering technology, and toolmaking, skills it uses to develop innovative and exacting products for special customer needs and supply sectors such as the automotive, electrical, or chemical industry. According to Reuters, Philip Matthias said he recently tried for months to convince his father to install solar panels on the roof of the company in order to reduce the cost of electricity and cut carbon emissions at the factory. That plan involved a major investment — €2.3 million, to be exact.

But when his father did the math, he immediately decided to double the size of the proposed system so it could not only meet all the needs for electricity for the company but also power 900 households in addition to the factory. “The PV systems amortize after about 7-1/2 years. The manufacturer gives a guarantee of 20 years. That means this is an extremely lucrative investment,” Matthias told Reuters. The feed-in tariff of €9.3 per kilowatt-hour is higher than what Tridelta currently pays for electricity, which makes it cheaper for the company to sell future generated electricity to the grid and buy it back later, Matthias added. 

“There’s a high correlation between the feed-in tariffs and the build-up of solar PV roof top projects,” Hugo Willink, Executive Director at solar roofs developer Sunrock told Reuters. Sunrock won an order from Mercedes-Benz in May to build a 23-megawatt solar project on the carmaker’s factory roofs — one of the reasons it sees Germany as its core market for the coming year.

A drop in solar panel prices globally since last year has spurred companies to embrace solar energy. “The market is overrun with cheap but good panels from China. That means that the system that we are building now is about 20% cheaper than a year ago,” Matthias said. A German legislative package passed in April eased regulations and increasing subsidies for large rooftop systems and included a proposed tax investment reform for real estate funds operating rooftop solar panels. Once fully implemented, those policies are expected to drive demand for rooftop solar for businesses even further.

State feed-in subsidies for large scale rooftop photovoltaic projects, introduced in 2021 and which are selected via tender, have also boosted the trend. A study conducted in May by YouGov showed more than half of German companies with suitable roofs planned to install solar power systems in the next three years. BVMW forecasts that nearly all manufacturing companies in Germany will use solar energy by 2030.

In response to increasing demand, Germany’s largest residential solar power developer, Enpal, said in April it was expanding into the commercial sector. “The demand was not as instant… but the growth is going to be very sustainable,” Melchior Schulze Brock, CEO of commercial and industrial solar startup Enviria. While rooftop solar installs were up strongly in the first four months of this year, residential installs were up by a barely noticeable 1%.

An April study by the Institute for Applied Ecology, which is located in Freiburg, Germany, showed there was the potential to install up to 287 gigawatts of solar capacity — more than enough to meet the German government’s 2030 target of 215 GW — along German roads, railways, parking lots, and industrial areas. Doing so could significantly reduce reliance on agricultural land where permitting and planning approvals can take up to a decade.

The Takeaway

This is all wonderful news. There are millions of square feet of industrial and commercial roofs that could be use to support solar systems. But there is more to this story than may meet the eye at first glance. First, this interest in rooftop solar by corporations is being driven by federal government policies and cheap solar panel prices. Either or both of those factors could evaporate overnight with a change of government. Just ask Emmanuel Macron how things are going for his government in France.

Feed-in tariffs are all well and good, but the California Public Utilities Commission just pulled the rug out from under similar provisions. The government giveth and the government taketh away. Low prices for solar panels may be good for some, but bad news for local manufacturers, who may one day in the not too distant future demand protection from panels that are heavily subsidized by the Chinese government. Both the EU and the US have recently imposed significant new tariffs on Chinese-made electric cars. Who’s to say the same could not happen in the solar panel industry one day?

At CleanTechnica, we celebrate any good news about renewable energy, but events in America in the past few days show that government policies can change rapidly. What would really make us smile would be news that all those rooftops in Germany were supplying clean energy to the people working inside, making them self sufficient when it comes to their needs for electricity. Local consumption will be one of the keys to the clean energy revolution.