With oil prices set to stay at a high level the world is being forced to recognize that fossil fuels may not only be damaging the environment, but also losing their competitive edge regarding price. Germany is pioneering solutions to this problem. It has demonstrated that renewable energies can play an important role in a sustainable industrial policy - providing jobs, returns to investors, and carbon emission reductions.
Germany’s recently approved “climate package” is its latest step in securing the country’s position as a leading investment location in renewable energies.
This legal framework encourages Germans and foreign nationals alike to invest in PV products, creating a long-term and sustainable domestic market. Favourable tax treatment of income from PV producers is another bonus for investors.
Germany wants to be the world leader in all renewable energies by 2020. This will mean a worldwide market share of over 20%, EUR 20 billion in domestic investments, and over EUR 80 billion in exports. Furthermore, networks of research institutes and universities work with industry to develop new technologies. For example, the Fraunhofer Institute in Freiburg, Germany is a leading location for the study of photovoltaic technologies.
Germany’s favourable legal regime, strong workforce, and network of scientific experts all contribute to the renewable energy industry’s impressive statistics: EUR 23 billion in revenue in 2006 plus EUR 6 billion in exports and EUR 9 billion in domestic investments.
Many American firms are taking advantage of Germany’s leading position. General Electric, First Solar, and Nanosolar have all made major new investments in Germany within the past two years.
Energy efficiency is becoming a major branch in the German economy. For example, energy-efficiency technology includes Light-Emitting Diodes (LED). These technologies can be used in homes and in streetlamps; they drastically reduce the amount of energy required to disseminate light, in comparison with traditional light bulbs.
Germany combines a tradition of scientific excellence, and solid government that have established a favourable legal framework to encourage new investments in renewable energies and energy efficiency.
Germany’s legal framework also favours investors in clean technologies. As part of the German federal government’s Market Incentive Programme (MAP), funds available for investments in heat-saving technologies, such as solar thermal systems and heat pumps will increase to EUR 500 million in 2009.
This program complements the already successful Renewable Energies Sources Act (EEG) that pays “feed-in tariffs” to owners of renewable energies systems, such as solar panels, creating an incentive to own renewable energy systems, and increasing demand for such products.
The German parliament (Bundestag) has agreed to new laws that strengthen conditions for renewable energies investments. The laws are part of the government’s “Climate Package,” the goals of which are saving 250 million metric tons of CO2 by 2020, with renewable energies contributing to 30% of electricity production by the same year. These legal changes strengthen Germany as an investment location for renewable energies and energy efficiency technologies.
By 2010 revenues from production of PV products will have nearly doubled from 2007 levels in Germany and investment volumes will have increased by 67%. These are the assessments, based on surveys with 345 companies, of the research institutes Ifo in Munich and EuPD in Bonn.
Germany is the world’s largest PV market and its projected growth will secure this distinction. The organization PHOTON Consulting expects that by 2010 Germany will have over 6.5 Gigawatts (GW) of installed PV capacity, double the amount of any European competitor and the largest worldwide. Germany’s increasing potential combined with growing worldwide demand means there are numerous possibilities for new entrants into the German market.
Furthermore, as the EEG does not have a cap; there is no set limit to the amount of electricity that could be produced from PV sources and therefore benefit from the “feed-in” tariff. PV products also have growing export potential as interest in PV increases in other countries. The IFO and EuPD study predicts that sales coming from exports will increase from a current 37% to 50% by 2010.
The falling tariffs in Photovoltaic energy are evidence to investors that Germany is making significant progress in reducing the cost of electricity generation from PV sources, therefore making subsidized prices less necessary to attract investment. The subsidies and tax incentives are enshrined in law now for the astute investor to take advantage of.
Click the Investors Guide link below to see more information on how we can help you have your own renewable energy project in Germany making you money and reducing CO2 emmissions, or email us at info@propertyinvestor.ie
