Germany Utilizes Performance-Based Incentives
The electric utilities administer Germany's solar incentive program. Incentives are based on actual energy produced over a 20- year period, paid through a utility "feed-in" tariff, similar to a long-term electricity sales agreement. The program initially provided low-interest loans, available at the applicant's bank of choice, and administered through the German Reconstruction Loan Corporation.
Like California, Germany seeks to reduce CO2 emissions.3 To that end, policymakers reinvigorated the solar program, now called 1,000,000 Solar Roofs. The government increased the feed-in tariffs, removed restrictions on system size, and removed participation caps in January 2004. Per kilowatthour (kWh) purchase prices vary by customer class, system size, and physical configuration. Prices for roof-mounted PV range from $0.70/kWh for residential customers to $0.55/kWh.for large commercial installations.4 Building-integrated systems receive an additional $0.06 /kWh bonus. The purchase price for solar kWh is scheduled to decline by 5% per year. Germany has no current plans to alter the feed-in tariff, but terminated the low-cost loans in 2004.
Average residential system prices are about $6.40 per Watt. The program installed 570MW between 1999 and 2004, at a cost to date for the purchased electricity of over $1 billion. About 75% of the systems were installed in the 2004, due to the increased feed-in tariff.
3 California proposes to reduce greenhouse gas (GHG) emissions to year 2000 levels by 2010; to 1990 levels by 2020; and to 80 percent below 1990 levels by 2050. Germany's goal is to reduce emissions to 40 percent of their 1990 values until the year 2020.
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