The document released by the German Ministry of Finance on Friday shows that the German coalition government will thoroughly reform the subsidy system for renewable energy, so that electricity producers can receive one-time support for their investment costs instead of guaranteed prices for the electricity they produce.
The shift towards investment subsidies marks a significant change in the German renewable energy market and will seek to reduce the industry's reliance on government support.
This means that operators will receive a one-time subsidy to build renewable energy power plants, but they will need to calculate the benefits of selling electricity based on their own situation and bear higher financial risks.
The document is part of next year's budget agreement reached by the ruling coalition on Friday, stating: "Our goal is to shift the expansion of new renewable energy towards investment cost subsidies."
The current subsidy system was implemented 24 years ago, making it easier for enterprises to make investment decisions and obtain preferential loans. The German government provides a 20-year guaranteed price for solar, wind, and natural gas energy producers to sell electricity to the grid, which promotes the expansion of renewable energy in Germany. Germany's goal is to meet 80% of its electricity demand with renewable energy by 2030.
The document shows that the specific timetable for the planned reforms has not yet been determined, and it is part of the government's goal to expand renewable energy and fully integrate renewable energy into the market without subsidies in the future.
These subsidies have long been criticized by the ruling coalition partner, the Liberal Democratic Party, which has stated that subsidizing renewable energy for 20 years is meaningless because it is expected that wind and solar energy will become dominant in the German energy market by 20 years.
Preliminary data released on Monday by the Public Utility Association BDEW and the Solar and Hydrogen Energy Research Center (ZSW) shows that the proportion of renewable energy electricity in Germany's electricity consumption increased to 58% in the first half of this year.
Economy Minister Robert Habeck stated that the government will test various subsidy transfer models, which has been criticized by the renewable energy industry and other partners in the ruling coalition.