Germany's Photovoltaic Surge Necessitates Better Integration, Says DIW

The latest report from the Deutsches Institut für Wirtschaftsforschung (DIW Berlin) reveals that Germany's photovoltaic (PV) expansion is outpacing federal government projections. The current "traffic light monitor" for the energy transition highlights that while the growth in solar power is robust, several challenges need addressing to ensure continued progress.

The report notes that no other electricity generation technology is experiencing such rapid global growth and investment as photovoltaics. In Germany, the increase in solar capacity has been driven significantly by new rooftop systems. However, to meet the 2030 expansion target of 215 gigawatts, the pace of growth needs to accelerate further. Although open-space PV systems are on the rise, there remains considerable potential for expansion in this area. Felix Schmidt, a study author, suggests that increasing tender volumes for open-space projects could help reduce costs, as these systems are generally cheaper than rooftop installations.

The study also highlights the impact of self-consumption incentives, which have been a major driver for rooftop solar installations. In the past year, 94% of new rooftop solar projects benefited from self-consumption advantages coupled with feed-in tariffs.

The traffic light monitor also notes a sharp increase in balcony power plants, with around 600,000 systems installed in the past two years. However, these systems contribute only 0.5% of Germany's total photovoltaic output, and their distribution remains uneven across the country, with Bavaria leading and the city states of Berlin, Hamburg, and Bremen lagging behind.

Challenges identified in the report include:

• Integration into the Electricity System: The falling prices for solar power on the wholesale market indicate that the flexibility of the electricity sector has not kept pace with the growth in solar output. Alexander Roth, a study author, points out that existing storage systems are insufficient and need better price incentives to operate effectively.

  
  

• Dependence on Imports: The heavy reliance on imported solar modules, particularly from China, poses a risk. Wolf-Peter Schill, another DIW economist involved in the study, suggests that creating a module reserve could help mitigate potential supply bottlenecks. The current global oversupply of modules provides an opportunity for increased expansion.

  
  

Despite these issues, the global demand for solar energy and modules continues to soar. Technological advances, economies of scale, and high production capacities have driven down module prices, making photovoltaics a highly attractive and rapidly growing technology worldwide.