Energy Masterminds: German PV Power Costs 50 Cents To Produce, Gets Less Than 4 Cents On The Market!

Photovoltaic: Germany’s cost driver

(Translated/edited by P Gosselin)

Germany’s Federal Ministry for Commerce And Energy (BMWi) presents a brochure every year with the feed-in act in figures. The brochure lists the costs of the Energiewende (energy transition) in detail. Germany’s EEG feed-in act total subsidy for supporting the Energiewende and expanding renewable energies in 2014 cost approx. 24 billion euros. In 2015 the cost is projected to be some 27 billion euros. From the BMWi figures, it is clear that the major cost driver in Germany’s Energiewende is photovoltaic power.

The following table lists the photovoltaic (PV) power produced in the years 2000-2015 (which was subsidized by the EEG), the average EEG subsidy per kilowatt-hour of solar energy 2000-2015, and the total EEG subsidy for solar energy for PV power ín billions of euros 2000-2015.

The total EEG subsidies paid for PV power rose from 0.015 billion euros in 2000 to almost 11 billion euros in 2015! This is increase is completely due to the installation of total PV capacity shown by the blue bars in the following chart.


The red bars in the above chart show the total subsidies paid each year for PV power. 2015 will see close to 11 billion euros paid in subsidies to support solar power. The heavy black line shows the amount of new installations. New PV installations have trailed off since subsidies for solar energy were scaled back in 2012.

Total installed photovoltaic capacity in Germany has risen from 1 GW in 2003 to almost 40 GW today. The average EEG subsidy for PV power has fallen from 50 cents per kilowatt hour to 30 cents today. Thus the addition of PV capacity continues to surpass the significantly reduced EEG subsidy for PV power, which means total subsidies doled out continue to rise.

With 11 billion euros, PV is the major cost driver of the Energiewende, and accounts for 40% of the total EEG subsidies of 27 billion euros to be paid out this year.

For the 11 billion euros in subsidies, about 1 billion euros of power is actually marketed. That means the subsidies cost a net 10 billion euros annually, which power consumers are forced to pay. That turns out to be about 2.5 cents per kilowatt-hour. For an average household that means about 90 euros per year in extra costs.

For the photovoltaic producers, it’s a great business: Many get 50 cents per kilowatt hour (guaranteed 20 years) while the same kilowatt gets sold for only 3 to 4 cents on the market.


Read here to see the impact this has had on German CO2 emissions (none). Is this insanity, or not?

17 responses to “Energy Masterminds: German PV Power Costs 50 Cents To Produce, Gets Less Than 4 Cents On The Market!”

  1. Mike Haseler (Scottish Sceptic)

    Back in 2000, it was well known that the only form of solar power that was sensible was solar hot water heating – something so good that in many cases it didn’t need any subsidy at all.

    But that was the problem – because how could the sharks who use “green=gullible” energy to line their pockets, line their pockets from solar if it meant solar hot water heating which needed next to no subsidy.

    It would have been cheaper to cover every house with PV with gold leaf – and it would probably have been far more environmentally beneficial.

    1. cementafriend

      Mike, You may have been mislead about solar hot water. It is very expensive, still needs backup, and has a relatively short life time. I met a green inclined chap in Sydney Australia who tried solar again after the first one broke down just out of warrantee after eight years. The second one was no better and he decided to go for reverse cycle electric -cheaper in capital, cheaper in operation over a year and more reliable. I have two instant gas systems for different parts of the house. These have been operating for 20 years and if I was to replace them it would be similar gas or reverse cycle electric. I do not know anyone in NSW or Qld that has solar hot water. For the swimming pool I use a solar blanket mainly to keep out the leaves. This gives about 7-8 months of swimming (water temp over 20C)In summer often have to keep the blanket off as the pool gets too hot over 25C.
      I can not imagine solar hot water or solar PV working in the winter of Scotland when they are not economical in Australia.

  2. Mikky

    Reading reports from solar enthusiasts makes it clear that they are only in it for the subsidies, paid for by the poor and elderly who can’t milk the system. Hopefully battery storage will develop soon to the point where surplus electricity can be stored locally, no need to sell it to the grid, i.e. no need for payment. Go Elon Musk, make my day!

    1. DirkH

      Oh, a Muskian. Well Lithium Carbonate prices just shot to the moon. So good luck with that.
      BTW Musk develops nothing of note. Li-Ion is old tech. I’ve been helping in a German project that developed a Lithium battery rack for home solar storage in 2009/2010 (subsidized of course). It’s a boring old battery and some inverters. Nothing of what Musk does is new. He’s just the most successful subsidy tycoon, probably through political connections.

      1. Green Sand

        In with a bang, out without even a whimper!

        ‘Tesla Discontinues 10-Kilowatt-Hour Powerwall Home Battery’

        “The economics for backup power alone just aren’t that attractive.

        Tesla has quietly removed all references to its 10-kilowatt-hour residential battery from the Powerwall website, as well as the company’s press kit. The company’s smaller battery designed for daily cycling is all that remains.

        The change was initially made without explanation, which prompted industry insiders to speculate. Today, a Tesla representative confirmed the 10-kilowatt-hour option has been discontinued……”

        Did Musk get funding to develop ‘Powerwall’?

        1. DirkH

          Oh thanks! I missed that! That was fast! (by Musk)
          BTW I *like* his new Hyperloop scheme way better than his cars and his solar shtick.

          1. Green Sand
          2. Arsten

            DirkH: “BTW I *like* his new Hyperloop scheme way better than his cars and his solar shtick.”

            Don’t. The big folly that HyperLoop is trying to get in on in California is fraught with issues.

            The first reasons are foremost social ones: The paved road is the technology used for mass transit in the US and living spaces are spread out as a result. Second, any place that tries to densify living immediately out-prices anyone who might have benefited from sacrificing a car for public transportation.

            On top of that, you have just a gushing hydrant of problems: Planners don’t even expect enough ridership to pay for the O&M, meaning it will require a subsidy. It’s going to/has started causing a fairly large loss of housing for the poor and middle class via eminent domain. The number of stations that need to be present to even appeal to people and get them within striking distance of their homes jumps the advertised transport time from ~30 minutes to one to two hours. TSA is/has threatening/-ed to force screening on passengers. Each locality has to give individualized approval to the project that touches their sacred ground, driving up costs and adding features and payola to those localities.

            Hyperloop sounds good until you actually try implementing it. 🙁

  3. John F. Hultquist

    My bold:
    Hopefully battery storage will develop soon

    “The first known electric car was built in 1837″ …. Wiki source

    We now have decent electric cars — sort of.

    What does ” soon” mean?

    1. yonason

      “soon” = when “then” becomes “now”

      Just a word of advice, don’t hold your breath while waiting.

  4. DirkH

    The warmunists are not happy. They want MORE.
    Top PIK villain “economist” Edenhofer, known for admitting that warmunism is nothing but a wealth redistribution scheme, is hopeful he’ll be able to use low oil prices to ram a CO2 tax through, he hopes globally.

    Never forget: they’re mad and they hate us.

    1. DirkH

      …just watching that Tim Ball video where he points out in the Q&A that at Copenhagen COP15 they already wanted a global CO2 tax to fund their desired world government… So maybe they’re now hopeful as the West slides into NIRP (and necessarily will collapse) that they can use their new financial crisis to putsch the remaining national governments away.

      I don’t think they stand a chance. Looks more like flies in search of a (Chinese-made) windshield.

  5. DirkH

    Candle industry celebrates their annual “Earth Hour”, where they lobby governments to switch off electric lighting of landmark buildings and send front groups like WWF to replace them with candles for one hour.

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  7. sod

    “For the photovoltaic producers, it’s a great business: Many get 50 cents per kilowatt hour (guaranteed 20 years) while the same kilowatt gets sold for only 3 to 4 cents on the market.”

    I think that this statement is misleading.

    Those who get 50 ct are the pioneers that invested in solar PV 10 years ago. They will only get those 50ct for another 10 years. After that, their PV system will provide free electricity, possibly for another 20 years. That is not factored into this equation.

    At the same time, any price of 3 or 4 cent per kw (what source are you actually talking about?) is by old plants, that already have surpassed their “payback time”. so if you want to compare a PV price to the price from old coal plants, you will have to compare the price of those PV systems, that were installed 20 years ago (we can not make that comparison, because the EEG law is younger than that).

    I think that it is a little bit misleading, to have this article with only average prices given. The important graph is this one:

    Solar PV “price” (Einspeisevergütung) dropped like a stone.

    It dropped to about 10 ct and some roof systems are now even below 10 ct.

    here you can see the data for this year (adjustments are now made every month, to prevent end of year building activity):

    Looking at the averages gives a very misleading picture, as at some point the most expensive systems will drop from 60ct to 0 ct in an instant. So you can celebrate those figures or use them to misleading the uneducated, but the all of this will start to end soon.

    1. cementafriend

      As is normal SOD does not know what he is talking about.
      A ten year guarantee is being offered for PV solar systems but many fail well before 10 years but that is no use because the local installers and equipment suppliers (who are mainly Chinese) have gone out of business. The inverter in my system started playing up after 3yrs and yes the manufacturer had gone out of business. The when I expanded the system (to take advantage of the contracted feed-in tariff of $0.45/kWhr) I had to purchase a new inverter Even with the feed-in tariff now $0.47 I get so little rebate and save so little I will not have a return on capital for more than 15years. I suppose that is better than putting money in the bank at zero interest as in Germany but here in Australia buying shares in a bank gets you a franked dividend of 7% (worth 9% with tax rebate) plus a capital gain. So my PV solar was not a good investment as at the end of its life of 10 to 15 years it will be scrap metal which will cost to take it to a waste tip.

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