Solar power for tenants: Major potential for expansion, particularly in Berlin, Hamburg and Munich

By: German Solar Association, GdW, Mieterbund, eaD

Housing industry, tenants’ association, solar industry and energy and climate protection agencies present calculations for Germany’s 20 largest cities

The 20 largest German cities hold the potential for installation of up to 33,000 photovoltaic systems on large residential buildings, enough to supply approximately 1.4 million tenants with inexpensive solar power. This is the central finding of a potentials analysis for landlord-tenant solar power that was presented today by the Federal Association of Germany Housing and Real Estate Companies (Bundesverband Deutscher Wohnungs- und Immobilienunternehmen - GdW), the German Tenants’ Association (Deutscher Mieterbund - DMB), the German Solar Association (Bundesverband Solarwirtschaft - BSW-Solar) and the Federal Association of German Energy and Climate Protection Agencies (Bundesverband der Energie- und Klimaschutzagenturen Deutschlands e.V. - eaD).

The four associations are working in unison to ensure the rapid proliferation of landlord-tenant solar power models. Together they are pursuing the objectives of getting as many tenants as possible to enjoy the cost benefits of photovoltaics, informing the housing and energy industries about opportunities offered by landlord-tenant solar power models, providing a dynamic impulse to photovoltaic expansion and reducing greenhouse gas emissions with the help of the urban energy transition.

Carsten Körnig, Chief Executive Officer of the German Solar Association (BSW-Solar): "Finally progress is being made in the area of solar power for tenants in Germany’s cities. The rapid decline in photovoltaic prices and the Federal Government’s new landlord-tenant PV legislation are now making it possible. We are seeing a growing number of market players becoming active in the implementation of tenant PV projects."

Axel Gedaschko, President of the Federal Association of German Housing and Real Estate Companies (GdW): "Tenant PV projects are an important building block for a successful energy transition in the residential housing sector. In order to make full use of this potential, however, there are still barriers which have to be removed. Housing companies that want to generate electricity locally from renewable energy sources such as photovoltaics or combined heat and power (CHP) face considerable tax disadvantages. As soon as they feed the electricity they produce into the grid or make it available to tenants, rental activity becomes subject to trade tax, even though it is actually supposed to be exempt from that tax. Here there is an urgent need to adjust trade tax law."

Lukas Siebenkotten, Director of the German Tenants’ Association (DMB): "Tenant electricity models allow tenants, for the first time, to actively and deliberately choose clean energy and promote environmental and climate protection. The success of tenant electricity, however, will depend primarily on how attractive the electricity price is. The existing potentials can only be fulfilled if tenant electricity brings with it significant cost advantages."

Michael Geißler, Chairman of the Board of the Federal Association of German Energy and Climate Protection Agencies (eaD): "We need as many unused rooftop surfaces as possible if we are to reach local climate protection targets in the cities. Tenant electricity is a good place to start, and in the future we will need additional creative solutions for services and direct marketing. This way we can increase the participation of broad segments of society in the energy transition and ensure its widespread social acceptance."

The four associations are in agreement that it would be much easier to build solar power plants in Germany’s urban centers if the next Federal Government would exempt tenant electricity, which is not routed through the public electricity grid, from the EEG surcharge. Furthermore, landlords should not have tax disadvantages in their core business area if they supply their tenants with electricity from their own facilities. This would finally put tenants on equal footing with homeowners, who have long been able to enjoy the advantages of self-supply.

Background According to potentials analysis in the 20 largest German cities, it would be feasible to install additional photovoltaic plants with an output of up to 1.1 GWp, which would lead to CO2 savings of 500,000 tons/year. The estimates are based on the assumption that the “Landlord-to-Tenant Electricity Act,” which entered into force last summer, and the funding mechanism contained therein, will be adopted and jointly implemented by all market participants in coming years. Landlord-tenant PV is electricity generated on one or more buildings through solar power and supplied to residents by way of direct marketing. Since this electricity reaches the customer outside of the general supply network, the price does not include state levies such as grid use fees, concession charges, CHP surcharge or electricity tax. However, the VAT obligation and the full EEG surcharge, currently at around 7 cents per kilowatt hour, also apply to tenant PV electricity. In order to increase the competitiveness of tenant PV models and to promote solar expansion in cities, the new Landlord-to-Tenant Electricity Act guarantees operators of tenant PV systems a surcharge of up to 3.8 cents/kWh, depending on system size and the current EEG feed-in tariff. Eligible systems are restricted to 100 kWp, however. The annual expansion of tenant electricity has been capped at 500 MWp. The legislator has also stipulated that the maximum price for tenant PV electricity must be at least 10 percent below the respective local basic supply tariff. More information on the topic of tenant electricity, a free guide and information on the new Landlord-to-Tenant Electricity Act is available at the website, which is funded by the German Federal Environmental Foundation (Deutsche Bundesstiftung Umwelt - DBU).

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