05/08 German renewable energy feed-in tariff

The German FIT has been a huge success – and is generally regarded as the best example of an effective FIT law. The German FIT law has been in development since 1979, and has enjoyed sustained support from the German Bundestag, and from the wider population – a fact that has contributed considerably to its success.

The result of the law has been that, while Germany’s energy use has remained relatively stable, renewables have accounted for an ever greater portion of the electricity consumed, helping to limit Germany’s greenhouse gas emissions. It has been estimated that the feed-in tariff itself has directly saved more than 33 million tonnes of carbon dioxide from being released in to the atmosphere.

In 2006, renewables accounted for 11.8% of total electricity consumption in Germany – up from 10.2% in 2005. From 2000 to 2004 the volume of electricity produced from renewable sources supported by the EEG increased from about 13.6 terawatt hours (1TWh = 1,000,000 MWh) to 34.9 TWh. While energy produced from wind and biomass more than doubled in this period, there was also a nine-fold increase in electricity generated from PV systems in Germany.

The solar sector in Germany has grown considerably thanks to the Feed-in Laws. Germany is the largest solar heating producer in the world with a 47% share of the global market. There are now over 40 companies in Germany that produce solar system components, and the industry employs more than 20,000 people, and has a turnover of €1.7 billion per year. The renewables industry as a whole in Germany had a turnover of €21.6 billion in 2006, up from €16.4 billion in 2005, and employed about 214,000 people – more than the nuclear and the hard and brown coal industries combined. It is expected that by 2020 the renewable energy industry will employ 500,000 people.

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