Auctions bring German solar power price to new record low
The cost of power generated by new solar PV installations in Germany dropped to a new record low in the third round of auctions in 2017, with average support falling below five euro cents per kilowatt hour (ct/kWh) for the first time ever. (BNetzA), costs fell to 4.91 ct/kWh from 5.66 ct/kWh in June. BNetzA head Jochen Homann commented that 鈥渆specially larger installations apparently benefit from economies of scale and can be built at relatively low prices鈥�.
In the auction with a final tendered volume of 222 megawatt (MW), the lowest accepted bid was 4.29 ct/kWh, and the highest 5.06 ct/kWh, the agency said.
At the first pilot auctions in 2015, the average costs for solar power installations still stood at 9.17 ct/kWh, and since auctions were introduced. In light of the substantial drop in support rates, the German Solar Industry Association (BSW) has called for removing the caps on the technology鈥檚 expansion.
鈥淚f the government wants to achieve its climate goals, it urgently has to increase the expansion goals for photovoltaic installations鈥�, said BSW head Carsten K枚rnig. Germany could 鈥渘o longer afford to not use the bulk of its annual sun harvest鈥�, K枚rnig said. The new price level necessitated a much more 鈥渄ynamic expansion鈥� of solar power, he added.
The expansion of solar power installations is currently capped at 2.5 gigawatt (GW) per year, which according to the solar power lobby group is due to the previously higher price levels of the technology. Power produced in large photovoltaic installations is now cheaper than that generated by new fossil power plants, eliminating any reason to limit solar power expansion, the BSW said.
鈥淓cologically and economically unexplainable鈥�
Germany currently has . This covers around seven percent of its electricity demand. The country would need an estimated 300 GW for its Energiewende, the dual shift from nuclear and fossil power to renewable energy sources, the BSW argued.
Since solar power plants can be built relatively quickly and get high approval from citizens, it would be 鈥渆cologically and economically unexplainable鈥� if the technology鈥檚 potential was not fully exploited, K枚rnig said. A swift expansion of solar power to replace carbon-intensive fossil power plants could even help Germany to still reach its endangered 2020 emissions reduction targets, he added.
The expansion of renewable energy sources is likely to figure prominently in the upcoming coalition talks to form a new German federal government, which are scheduled to start on 18 October. The members of a so-called Jamaica coalition of Chancellor Angela Merkel鈥檚 conservative CDU/CSU alliance, the pro-business FDP, and the environmentalist Green Party are bound to clash over climate and energy policy issues, such as the rapid phase-out of coal-fired power production, demanded by the Greens, or the lifting of the cap on renewables, which was introduced by the previous government that included the conservatives.
The fall in the cost of solar and wind power installations, as well as of biogas plants, has led renewable energy advocates to call for abandoning all restrictions on renewables expansion, which opponents argue is still too costly. The operators of solar power installations receive about one third of support payments made under Germany鈥檚 Renewable Energy Act (EEG).
