Smart thinking delivers subsidy free solar in Germany
Setting the scene
Solar developments have, for some time now, enjoyed huge growth as costs have fallen and governments have increasingly embraced the now-established technology.
However, one of the challenges that remains is how to make smaller solar developments commercially viable, attractive to investors and crucially, if the first two goals are to be realised, subsidy free.
BayWa r.e. has already proved that grid parity is possible at scale – with its 175MWp Don Rodrigo solar park in Seville, Spain. But next we wanted to show that smaller installations could be built and run without the need for any state support.
Meeting the challenge
We know that it’s feasible to achieve grid parity with larger projects, but it’s important for the future of energy generation that we’re able to deliver the same subsidy-free commercial conditions for smaller installations. This is particularly important as we move more towards a world where decentralised energy models become more common, with a need for smaller generation sites.
Our Barth V development at Stralsund-Barth Airport on the shores of the Baltic Sea is a great example of this. What was needed, was some smart thinking up front, taking into account the other solar projects on the site and thinking ahead on what future projects would require.
This involved planning in future infrastructure such as laying cables in the construction trenches of the 9.9MWp Barth III solar park which was constructed in 2017. We also bundled the finance for the Stralsund-Barth site into one agreement. This meant that once our 8.8MWp Barth V project was completed, it would be able to operate without the need for any subsidy.
Getting the result
This forward thinking approach meant that although a much smaller site than its Seville cousin, Barth V was able to operate on a commercially-viable basis right from the outset, making it one of the first subsidy-free solar sites in the whole of Germany.
This is good news for both the taxpayers and government as they aren’t having to pay to support the site. Investors get to see earlier payback and of course, the site is generating clean, low-cost electricity for German households, which is great for consumers and the environment.
We absolutely believe it’s possible to deliver subsidy-free projects on a smaller scale if the conditions are right. We’ve demonstrated that it can be done if you apply a smart thinking approach from the start.