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Germany's solar industry back on track

Germany is second in terms of installed solar power capacity, trailing only global leader China. German solar industry experienced tremendous increase in installed power capacity in 2008-2012 period but since then the new solar power installations have been declining steadily.

But it looks like Germany's solar industry is back on track, this time characterized by steady and slower growth and not like in its prime years by meteoric rise in PV installations.

It is expected that German solar power capacity growth should reach the 2.5GW annual expansion target this year. A few years ago, Germany introduced subsidy degression dependent on capacity growth. As a result of this solar subsidies declined gradually, and in 2016 Germany decided to shift subsidies for solar installations above 750kW from a guaranteed payment model to competitive tenders.

This was the first factor towards resurfacing German solar industry, and the second one occurred in 2017 when Germany approved an additional subsidy scheme, covering residential solar panels in buildings occupied by tenants which produced electricity for self-consumption, with a 500MW annual cap.

After several dry years German solar power industry is finally showing major signs of recovery. Not only that, according to the recent study by Fraunhofer ISE the newly built German solar and onshore wind plants in good locations are cheaper than new fossil fuel fired plants because of the constantly developing renewable energy technologies.

New technologies and business models which are appearing will make solar even cheaper and more efficient, and Germany will likely remain one of solar front runners, not just in EU but on global scale too.

The lot of it will depend on policy makers. The laws and regulations need to facilitate the further development of solar industry in Germany by innovative and progressive policies.

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