Lessons from Germany

And what they mean for the United States

A case study in unleashing wholesale distributed generation

Germany provides a real-world example of how the United States can unleash the vastly underserved wholesale distributed generation (WDG) market.

Starting in 2000, Germany enacted a national Feed-In Tariff (FIT) that propelled the country to become the world’s clean energy leader. The nation experienced tremendous growth of local renewable energy because their FIT unleashed the WDG market segment. The German FIT targeted the WDG market by making it easy to build smaller local renewable energy projects in the built environment (on preexisting homes, buildings, and structures), connect them to the grid, and sell power to the local utility at a fixed rate using a standardized, long-term, and guaranteed contract. Germany’s solar deployments are almost entirely sub-2 megawatt projects in built environments and interconnected to the distribution grid:

To date, Germany has integrated more than 40 gigawatts of solar photovoltaics into its grid . By 2016, the country had  the most solar capacity anywhere in the world:

FITs grow renewables: Renewable electricity generation in Germany, 1990-2015 | Source: Germany BMU

During the 10-year period following the introduction of its national FIT, Germany ran laps around the United States, including deploying over ten times more solar capacity than California:

Germany deployed over 10 times more solar than California in the decade from 2002 to 2012

Using FITs, Germany has removed obstacles and uncertainties from renewable energy’s path. FITs can easily reduce costs by 20% by preempting bureaucracy alone.

Predictable, streamlined procurement and interconnection radically reduced the costs to build local renewable energy projects in Germany. Replicating Germany’s scale and efficiency in California would result in rooftop solar costing between 4-6 cents/kilowatt-hour (kWh), due to California’s better solar resource and applicable tax treatments. No source of energy we’re procuring is in that low price range when you consider the costs of transmission delivery; FIT projects do not use the transmission grid, which alone has a price of 3 cents per kWh in California.

Replicating German scale and efficiencies would yield rooftop solar today at only between 4-6 cents/kWh to California ratepayers; figures are from 2016. Source: Wind-works.org

In addition, a significant percentage of Germany’s renewable energy installed under the country’s FIT is in the hands of the people.

Ownership of renewables installed capacity in Germany, 2010

The world owes Germany a debt of gratitude for instituting its fit. The German FIT achieved economies of scale, bringing down the price of solar. In large part because of its FIT, solar prices have plummeted since the German FIT was enacted in 2000.

Learn more about Feed-In Tariffs

The only approach that has been proven to unleash wholesale distributed generation (WDG) in the United States.

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