German Government May Implement Energy Storage Incentive

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Germany has impressed many with its low cost solar electricity and substantial solar industry growth, both of which are unparalleled, even by countries with more readily available sunlight.

The country which enjoys solar electricity at half the cost of the United States may implement an incentive to encourage the private installation of battery banks to store solar energy.

Microgrid energy storage system
Image Credit: Green Car Congress

It should offer this incentive for compressed air (CAES) and other types of energy storage systems too, although, I understand that it wants to concentrate its efforts and resources on batteries to really get the solar battery energy storage industry off the ground, as it concentrated on solar, and made great progress there.

According to Energy Matters, Germany drove down the cost of solar panels during its efforts to increase solar power production. This may be due to increased economies of scale caused by their increased solar panel demand.

They also said that Germany was the first to introduce feed-in tariffs (FIT), which it launched in 1991. The FIT scheme was expanded in 2000, and a seven-fold increase in solar power generating capacity took place within the next five years.

Battery energy storage systems can make solar power completely adjustable and dispatchable. The use of energy storage facilitates the addition of more renewable energy to the electricity grid. Natural gas and hydroelectric power plants can be adjusted to some extent, however, they are not as effective a backup solution as batteries.

After energy storage is implemented: For those that are unsure about the cost of generating additional solar power to charge batteries for use at night (i.e more solar panels), there is actually no net cost (excluding the cost of batteries).

For example, if twice as many solar panels are purchased to achieve this, twice as much electricity is generated, and the cost of the solar panels is twice as much, resulting in the same, exact cost of electricity per kWh. This is because the cost of electricity per kWh is the ratio of the cost of a given solar power plant to the amount of electricity it will generate over its lifetime.



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Nicholas Brown

Has a keen interest in physics-intensive topics such as electricity generation, refrigeration and air conditioning technology, energy storage, and geography. His website is:

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7 thoughts on “German Government May Implement Energy Storage Incentive

  • Well, here’s to hoping for a battery revolution! Not only would that greatly increase adoption of RE, it would also make the grid more efficient as well as help extend EVs and PHEVs!

  • “For
    those that are unsure about the cost of generating additional solar
    power to charge batteries for use at night (i.e more solar panels),
    there is actually no net cost (excluding the cost of batteries).”
    The example that follows shows that this is wrong. If you have to instal more panels system-wide to charge the batteries, that’s an additional cost on top of the batteries. This is entirely normal. However, there is no reason to think the increase in panels required will be proportional. In the near future in Germany, there will be an increasing number of hours when the combined output of wind and solar exceeds demand. There are holiday homes and offices not running air conditioning on every hot day. The excess would be thrown away without storage.
    Note also that batteries can and should also be charged at night from wind and nuclear sources. Germany lags in the smart meters and time-of-day pricing needed to create the right price incentives, but responsible homeowners owning batteries will do it anyway, as it won’t cost them anything.

    • How does my example show that it is wrong?

      I said that twice as many solar panels cost twice as much, however, they generate twice as electricity, therefore, the ratio of cost to electricity generation is the same, which is why the cost per kWh cannot increase.

      • Still wrong, batteries aren’t 100% efficient. Unless the batteries and Solar sites are co-located (the way it sounds like they are setting things up they won’t be) there will be additional transmission losses.

        But these are going to be small effects. Maybe 2-3%?

      • Yes there is loss in charge/discharge cycle. But you put it local micro grid. You load them off peak then peak use keeps dropping. Yes Time-of-day prcing would help. But if Germany is use peak hour to set a Biz rate, like some locations do. THen that biz, puts up panels (eats into the peak) and batteries that they charge at night and use during thier peak and the biz bills go way down.

    • Before you install batteries you need to ‘install’ flexible electricity pricing. At this point electricity is still cheaper at night than at day time for most electricity consumers. As long as this doesn’t change they will continue to run their flexible loads (e.g. electric hot water tank) at night even though it may be wiser to run them at noon.

      It simply doesn’t make sense to charge batteries with a loss at noon, just to use expensive battery power to run electric hot water tanks at night.

      Unfortunately, German utilities are not interested in flexible electricity pricing, because this would further reduce peak electricity prices (which they make most money with). But they do like it, when German households charge batteries at noon, since this does increase peak electricity prices.

  • Pingback: Germany's Energy Storage Incentive To Start May 1 | CleanTechnica

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