Germany continues to register a significant increase in solar power installations as the country reduces its reliance on natural gas from Russia. Owing to the record high prices of energy following Europe’s energy crisis, people are rushing to purchase solar panels for their residences and businesses. According to the German Solar Association, the installations of solar systems for private residences and solar farms climbed 22% during the first half of 2022 over that in 2021.
Solar Power Generation in Germany
According to GlobalData, power generation from solar PV in Germany grew from 10.97 TWh in 2010 to 48.71 TWh in 2021 at a CAGR of 14.51%. Solar PV power generation is expected to increase to 269.06 TWh by 2035 at a CAGR of 12.98% during 2021–35. German renewable power generation mix was led by the onshore wind power with generation of 86.86 TWh as of the end of 2021. The solar PV power market is expected to surpass onshore wind power to lead the renewable power generation in 2035.
Supply Chain Barriers
According to European industrial and energy giant, Schneider Electric, the demand for its solar-powered heating systems in Germany nearly doubled so far in 2022 over that in 2021. Consultancy requests for the company’s sustainability division, which offers guidance to companies on the procurement of clean energy, also reached an all-time high. Even though the increase in solar power led to an increase in sales for businesses in the renewable energy sector, it exerts increasing pressure on supply chains. The industry is experiencing severe shortage of labor, and lack of raw materials and production capacity.
Outlook
Germany depends heavily on low-cost natural gas imports to power its industries. After Russia reduced gas supplies to Europe, Germany unveiled measures to conserve natural gas by planning to restart coal-fired power plants. The German government is also making efforts to accelerate the development of renewable energy sources to reduce the country’s dependency on natural gas from Russia. Recently, Germany set a target of generating 80% of its power from renewable sources by 2030, up from its earlier target of 65%. The plan calls for tripling solar power generation by 2030 and includes policies that will speed up the approval of renewable projects and increase incentives for rooftop installations and small solar arrays.
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