By the end of this year, Germany’s Renewable Energies Act (Erneuerbare-Energien-Gesetz – EEG) will need to undergo significant change. A key reason for this are the more stringent climate targets now enshrined in law. By 2030 the share of renewable energies in gross electricity consumption in Germany will have to be at least 65 percent, while climate neutrality needs to be achieved before 2050. According to a cabinet decision, wind power and open-site photovoltaic plants are to make a hefty contribution here.

Nevertheless, merely continuing on the current trajectory with wind and photovoltaic (PV) energy will not enable the country to meet its goals, since one determining factor has been too frequently ignored: PV for rental properties and commercial buildings. “The potential of PV arrays on multi-storey building rooftops and on commercial or industrial sites is not given enought consideration in the current bill. The energy transition now has to incorporate this land potential,” demanded E.ON’s COO – Commercial  Karsten Wildberger recently during European Sustainable Development Week.

Moreover, it is important to maintain the potential already tapped for the generation of renewable energy. This concerns EEG plants that will no longer be eligible for funding after the 20-year period ends in 2021. These so-called post-EEG plants need a statutory framework to ensure they can continue to operate.

Post EEG – easing the way to on-site consumption solutions for small plants

At the end of the year, the first subsidized plants will lose the EEG funding they have enjoyed since 2000. For their operators, the question is: “What happens now?” The shift to on-site consumption is a suitable option for many plant operators, but under the framework currently in place this is almost impossible and the EEG 2021 draft also contains some set up some hurdles in this regard.

The Federal Ministry of Economic Affairs and Energy (BMWi) favours the principle of full feed-in to the mains network in the EEG 2021 draft and proposes an interim provision for on-site consumption of the energy generated by these plants. Until 2027 the old plants can continue to operate without having to meet any additional metrological requirements, and for the power they feed into the network they will receive the annual market value minus the marketing costs incurred by the network operator.

This at least means that the previous regulatory gaps are closed. Nevertheless, it leaves plant operators with a crucial disadvantage: The follow-up regulation under which no further metrological requirements have to be met only applies if all of the electricity generated is fed into the network. Customers who wish to use their post-EEG installations for their own consumption are required to install an intelligent meter system (iMSys) and if they fail to do so, then the power they consume themselves will be charged for with a punitive payment amounting to the kilowatt-hour rate.

This means the distribution system operators are forced into the role of the enforcing agency imposing these penalties on the customer. On top of this, there are the costs associated with customer monitoring to identify any violations. All this is likely to lead countless legal disputes. The proposed regulation would particularly penalize customers with small plants (< 7kW) not required to install a device under Metering Point Operation Act (Messstellenbetriebsgesetz – MsbG) as they would be burdened with disproportionate costs. As a result, the shift to on-site consumption would no longer be worthwhile in many cases.

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Mandatory bidding processes in the rooftop PV segment as a thorn in the side of medium-sized businesses

Alongside the major issue for plants whose funding will expire, the new EEG contains another regulation that may have far-reaching consequences for the energy transition: For rooftop installations, the new draft creates a separate PV segment by lowering the capacity limit for a mandatory bidding process from the current 750 kW to 500 kW.

What would be the consequence of that? More PV systems would have to commit to feeding all of their electricity into the network.  A medium-sized company wanting to implement a climate strategy with its own PV power would be unable to use any of its on-site power for its manufacturing processes and, on top of that, the company would have to take time out from its core business to participate in a highly bureaucratic bidding process. The motivation for this is likely to be very low, which is why bidding processes would most probably be permanently and significantly undersubscribed. In short, the PV potential among medium-sized companies would not be captured, and the path to a sustainable future made more difficult for these companies.

Using a sledgehammer to crack a nut – more stringent installation obligation for smart meters

Under the existing legal framework, it is not mandatory for plants generating less than 7 kW to be equipped with intelligent metering systems. However, the current cabinet draft dictates that in future even the smallest new plant with a capacity of just one kilowatt will have to be fitted with an iMSys so that its output can be curtailed in the event of a network bottleneck. For existing plants too, the cabinet draft provides for tightening of the rules and thus considerable expense for retrofits. While the draft acknowledges that there are no suitable iMSys devices on the market at present and therefore grants a five-year transition period until the smart metering technology is available, it fails to recognize that the high costs associated with these retrofits for plants producing just a few kilowatts would render them unprofitable, so as a result PV potential would remain untapped.

A bolder approach to PV in Germany

If the PV potentials in cities are to be exploited and to make an actual contribution to the energy transition, the legislation needs to create the appropriate framework. The changes currently envisaged do not go far enough.

Karsten Wildberger, COO - Commercial

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