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Germany introduces new incentive program for ground-mounted solar farms

Germany’s Federal Network Agency (Bundesnetzagentur) has announced its first-ever tender process for ground-mounted photovoltaic systems. The pilot tenders, which were approved late last month through an executive order by Angela Merkel’s cabinet, are designed to act as a test for auctions for other renewable energy technologies until 2017.

The tenders mark the beginning of a new chapter for German clean energy, which has historically flourished with the help of government-sponsored incentives. The tender process will largely eliminate government subsidies in favor of market-driven incentives, meaning newly built solar farms will no longer receive fixed subsidy support under the country’s feed-in tariff.

German energy minister Sigmar Gabriel believes tendering will not only make use of otherwise idle agricultural areas but also help drive down PV prices across the country. The model has not, however, been as warmly received within certain segments of the renewables industry. The Bundesverband Solarwirtschaft (BSW), Germany’s solar industry federation, believes the volume to be tendered is too low to reach the government’s goal of 7.5 GW in new solar capacity by 2017. The BSW has also criticized tendering because of the limited number of agricultural areas in Germany where the solar arrays could realistically be built.

Over the coming three years, a total of 1.2 GW worth of solar farm projects will be awarded by the German government. The first three trial auctions this year will award 150 MW, 150 MW and 200 MW, respectively. Each tender will be announced on the Agency website approximately eight weeks prior to the bid date.

First-round bids are being accepted by the Agency up until April 15. The order volume for the tender is 150 MW. Bids cannot exceed €0.1129 per kWh, and contracts will be awarded preferentially to bids offering the lowest power sale rates until the tender’s total volume has been reached.

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