Germany Ups Ceiling Tariff by 25% After Poor Response to Renewable Auctions

A higher tariff cap is expected to attract more participants in 2023 auctions


The underwhelming response to solar and wind auctions in 2022 has prompted the Bundestag (German Parliament) to allow the Federal Network Agency (Bundesnetzagentur) to raise the tariff cap by up to 25%.

The country has set a ceiling tariff of €0.1125 (~$0.12)/kWh for rooftop solar systems and €0.0735 ($0.078)/kWh for wind project tenders for 2023.

“The new maximum values ​​allow for adequate income for systems that take part in the auctions in the coming year. I hope that the significantly reduced number of bids will increase again, and that competition can develop again,” said Klaus Müller, President of the Federal Network Agency.

“The increase in the maximum value for open-space solar systems is currently being prepared in order to create stable conditions for achieving the expansion targets in this segment as well. An increase in the maximum values ​​for the innovation tenders will also be examined at the beginning of the coming year,” Müller added.

The recent tender for onshore wind energy received fewer bids than in earlier auctions, despite the capacity being reduced to 604 MW from 1,190 MW. Only 14 bids with a combined capacity of 203 MW were accepted, corresponding to one-third of the floated capacity.

Similarly, the 202 MW tender round for solar systems on buildings and noise protection walls was also undersubscribed. It corresponded to the average of the bid volume of the accepted bids from the bidding rounds on April 1, 2022, and August 1, 2022, and was thus significantly below that of the previous round.

The tender in June for 1.126 GW of solar projects was undersubscribed by 412 MW, which means a whopping 37% of the tendered capacity did not find any takers.

In September this year, the European Commission approved three additional measures to support electricity production from renewable energy sources in Germany under EU State aid rules.

The Germany federal legislative council recently approved a law under which renewables must be at least 80% of the country’s power capacity mix by 2030. Germany must install 215 GW of solar capacity by 2030, with 22 GW of capacity additions per year under the new law.