Feed-in tariffs in Germany

Feed-in electricity tariffs have been introduced in Germany to encourage the use of new energy technologies such as wind power, biomass, hydropower, geothermal power and solar photovoltaics. Each technology is eligible for a different feed-in rate. The aim is to meet Germany’s renewable energy goals of 12.5% of electricity consumption in 2010 and 20% in 2020. The policy also aims to encourage the development of renewable technologies, reduce external costs, and increase security of energy supply.

In 2005, 10 per cent of electricity in Germany came from renewable sources and 70 per cent of this was supported with feed-in tariffs. The Federal Environment Ministry estimates that this will save 52 million tonnes of carbon dioxide by 2010. The average level of feed-in tariff was €0.0953 per kWh in 2005 (compared to an average cost of displaced energy of €0.047 kWh). The total level of subsidy was €2.4 billion, at a cost per consumer of €0.0056 per kWh (3 per cent of household electricity costs).

There are about 170,000 people working in the renewable energy sector in Germany, which has an industry turnover of €8.7 billion.