In the year 2000, the German government first implemented the “Erneuerbare-Energien-Gesetz” (EEG), or German Renewable Energy Sources Act, to encourage the use and further development of renewable energies. By 2025, the share of renewables in the nation-wide power supply should be 40-45% and 55%-60% in 2035. Key components are the mandatory connection and intake of renewable energies through energy providers, as well as remuneration for energy fed into the grid. The latter is especially relevant for residential renewable energy sources, the most popular being photovoltaic systems.
According to the EEG, operators of public grids are obligated to take in energy generated by solar, wind, water, biomass and other renewable sources produced in Germany. Renewable energy is to be prioritized over fossil sources or nuclear energy. The owner of the renewable energy system, such as a PV system, who feeds electricity into the public grid receives a fixed payment for 20 years as of initial operation. In 2011, the payment for one kWh averaged at an all-time high of 40,16 euro cents. After drastic cuts in the mandatory payment, the number of newly installed PV systems decreased significantly (in 2013 -57% compared to 2012, in 2014 -43% compared to 2013). In 2019, the guaranteed remuneration for one kWh for a PV system up to 10 kWp taken into commission by August 1st 2019 is 10,48 euro cents. For comparable installations commissioned by January 1st 2020, the payment further decreased to 9,87 euro cents.
Further digression is planned with the imminent phase out of the state-guaranteed feed-in tariff. PV system owners are challenged with the question of how they can use their systems in the future. Even though the number of installations during the first years of the EEG remuneration was low, there are about 80,000 small PV systems under 10 kWp that will drop out of the EEG until 2025. The attractiveness of investing into a new PV system also decreases with the discontinuation of the guaranteed reimbursement of excess power.
Recently, EuPD Research published a study based on a survey of owners and planners of PV systems in Germany. The survey was conducted amongst users of the online platform “Photovoltaikforum”.
The results show that 28 percent of private households in Germany, who are currently planning to install a PV system, want to operate it exclusively for self-consumption. In addition to regular household consumption, these planners intend to use the generated photovoltaic electricity to charge an electric vehicle or to use a heat pump (figure 1). In fact, 37 percent of system planners see their own electric vehicle as a significant consumer for the use of the generated PV electricity. Compared to PV system owners in recent years this has significantly increased from 24 percent.
To ensure reliable supply in times of low sunlight, especially during night-time, residential energy storage systems are inevitable. Power generated by the solar panels is stored in the energy storage systems, which in turn supply the household in events of peak demand, exceeding the capacity of the PV system, or a lack of sunlight.
38% of the survey respondents stated that they already have a battery storage device installed or are planning to install one. Especially respondents who installed their PV system from 2017 onwards stated that they also own a storage system. This is a significant increase compared to PV system owners who had the system installed between 2009 and 2012, of which only 9% already have a storage system installed. In fact, 28% are not planning on installing one and 46% are undecided (figure 2). The hesitation or rejection of additional storage systems among owners of PV systems installed prior to 2008 is even more distinct. In other words; the owners of PV systems closer to the end of the 20-year period are more hesitant to install a storage solution to use the generated energy for self-consumption.
While the majority of planners who installed their PV system before 2010 have already dealt with the question on how to use their system after the EEG remuneration phase out, almost half of the surveyed PV system planners in Germany are either undecided or are not planning to install a storage system at all. This is largely due to the uncertainty about the developments still to come for battery storage systems, lack of information and guidance as well as framework conditions once the feed-in tariffs have phased out. One third stated that they would rather wait and see what happens to PV system owners without a battery storage system with tariffs phasing out before theirs will (figure 3). Nonetheless, to stop using the PV system or even dismantling it is barely considered an option. The vast majority states that they would want to consume the produced energy themselves.
In general, the trend for battery storage systems in residential applications is moving upward as of 2011. Compared to 2018, the number of such residential systems has increased almost 17-fold.
Concluding the findings, the future for residential PV systems in combination with battery storage systems after the phasing out of the EEG remuneration is shaped by a combination of the individual desire to reduce the carbon footprint, technological development and political framework settings. Electric mobility and charging of such vehicles is a significant driver for installing battery storage systems. However, uncertainty about frameworks after EEG is heavily influencing the decision making process and requires political action and guidance. Additionally, the dynamic technological development of battery storage systems leads owners to wait until the end of the EEG remuneration approaches, before making a purchasing decision.
Authors: Mona Guled and Hanna Schmole | Research Analysts at EuPD Research
More info: www.eupd-research.com
Please note, that this is an excerpt of the study “EndCustomerMonitor 9.0” conducted by EuPD Research. The study is based on a survey of PV system owners and planners and thus provides insights into the German PV market from an end customers’ perspective. If you are interested in the full version, please contact EuPD Research for more information.