Germany's Photovoltaic Dissemination Policy and Its Historical Background (2003)

Germany's Photovoltaic Dissemination Policy and Its Historical Background (2003)

In 2003, Germany was positioned as a global pioneer in the field of renewable energy. This was due to the Renewable Energy Act (EEG) enacted in 2000, which was amended in 2003 to further strengthen the feed-in tariff (FIT) system. At the time, greenhouse gas reduction was a growing political issue in Europe as a whole in anticipation of the Kyoto Protocol coming into effect, and Germany in particular had made it a national policy to phase out nuclear power generation and reduce its dependence on fossil fuels. This led to solar power generation being positioned as part of a national industrial strategy, rather than just an environmental measure.

On the institutional side, a system was put in place that guarantees the price at which solar power is sold for 20 years, creating an environment in which households and businesses can introduce solar power with little or no investment risk. This stable profit structure has spawned a nationwide installation boom, especially in rural areas and regional cities, where farmers have rapidly installed panels on the roofs of their barns and warehouses. Local governments and citizen energy cooperatives also actively participated, creating a model for distributed energy supply.

In terms of technology, while crystalline silicon panels were the mainstream, research and development of thin-film solar cells also progressed. Progress in inverter technology and the development of safety standards for grid interconnection have enabled stable power transmission from small-scale power plants. In addition, Germany's domestic solar-related manufacturing industry (cell/module manufacturers, frame manufacturers, and power conditioner manufacturers) grew rapidly in the international market, driven by the introduction of the FIT, and greatly expanded its global market share.

This combination of institutions, technology, and society helped Germany become the world's largest PV market in the mid-2000s, and served as an international model for later policies to expand renewable energy.