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Over on Politics.SE there's an interesting discussion about "grid parity": "If grid parity has already been reached, why is it so expensive to switch to renewable energy?".

The discussion has centered on Germany and the costs of PV there compared to use of fossil fuels for generating electricity. Much has been made of government subsidies for PV -- up to 1.33 cents/kWh according to this answer which cites a paywalled research article.

However, a few sources indicate that Germany also subsidizes fossil fuels:

  • "Germany provided at least €29 billion a year in subsidies to fossil fuel consumption" -- ODI
  • "22 fossil-fuel measures benefiting the upstream activities (extraction of coal) and downstream activities (agriculture, manufacturing, and transport of fossil fuels) were identified by Germany in its self-assessment" -- OECD

These sources ultimately link to German government documents which I am unable to read.

Obviously, if PV subsidies are included in the discussion on grid parity, then fossil fuel subsides should also be discussed.

To what extent is PV subsidized in Germany (in €/kW, €/kWh, or something similarly straight-forward), and how does this compare to fossil fuel subsidies?

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The European Court of Justice (ECJ) ruled in March 2019, that there is - legally speaking - no subsidy of renewable energies in Germany: see here.


What actually happens is the following: Power producers get a fixed and guaranteed price per kWh they feed - or could feed - into the grid. This money comes from the consumers, who pay currently almost 7 €-cent/kWh to finance the renewable energies. Naturally, there are exceptions and tariff ceilings and a lot of administrative paperwork, all legally defined under the Renewable Energy Sources Act.

Currently the fixed remuneration (for newly built renewable power sources) is 8.3 €-cent/kWh for PV, and 6.2 €-cent/kWh for wind-turbines (see the Bundesnetzagentur for more details, remunerations on the site are not updated yet).


Whether or not the Renewable Energy Sources Act is treated like a subsidy in public discourse is something mostly up to the intent of who is speaking.

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  • How does that fixed remuneration for wind/solar compare to what a fossil fuel plant is paid in the market? Also, legal definitions of subsidy are a bit silly. If solar is paid more than wind just because it's solar, then it's subsidized. – LShaver Jan 8 '20 at 14:32
  • "Usual" energy has to be sold at the energy stock EEX, where prices vary wildly: Today from 2.455 to 4.776 €-cent/kWh. I also heard of times when energy had negative prices. Solar is paid more than wind because it costs more per kWh to produce the energy, so I'd like to argue with you, though I still get why you say "subsidy". – Erik Jan 8 '20 at 15:05

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