Comparison of the Austrian and German renewable energy expansion laws for solar PV with an evaluation of the incentives for residential PV

Abstract

To reach the targets of the Paris climate agreement, Austria and Germany need to expand their share of renewables in the energy sector. This task can only be achieved if private households back this transition to a sustainable energy system. Austria set out an ambitious plan with the new Erneuerbaren-Ausbau-Gesetz (Renewable Energy Expansion Act, “EAG”) in 2021. Austria aims to become climate neutral by 2040 with a 100% electricity supply from renewable technologies already by 2030. This master’s thesis compares the new Austrian Renewable Energy Expansion Act with the German Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act,“EEG”, the latest amendment “EEG 2023” was passed in 2022) with regards to the effects on residential solar PV from a political, economic, and legal perspective. Furthermore, a case study including NPV calculations for solar PV systems (6 kWpand 11 kWp) is conducted in three scenarios: scenario 1, whose values refer to electricity prices to the second half of 2021, scenario 2, whose values refer to electricity prices of the second half of 2022, and scenario 3, whose values refer to electricity prices to the second half of 2019. An average Austrian or German 4-person family household is selected as the operator and the subsidy schemes of the EAG and EEG are applied and compared. As Austria and Germany are member states of the EU, both the EAG and the EEG show similarities as EU energy policies drive them. Recent EU policies oblige EU member states to introduce more market-integrating support schemes, such as market premium schemes instead of feed-in tariffs. In both countries, the operating support for solar PV has declined significantly in recent years. Nonetheless, high electricity prices and therefore higher proceeds of feed-in electricity for operators of solar PV installations have led to a boom of residential solar PV. However, it remains unclear if more private households will acquire solar PV installations when subsidies are relatively low compared to market prices – as it is currently the case in the EAG and EEG as of 2022. Therefore, it is doubtful that Austria and Germany will meet their climate targets. One significant finding of the here presented thesis is that market conditions are crucial for a feasible residential solar IIIPV investment. An important aspect concerning the impact of the subsidy scheme is if the operator can profit from high electricity market prices with the subsidy. As of 2022, operating a solar PV installation has become increasingly profitable in Austria and Germany. However, not due to low support schemes but due to high electricity prices.