Energy company BayWa Re says it will build Germany’s first large-scale solar power installation to be operated outside the system of state-mandated incentives. The company says the project near Stralsund on the Baltic Sea will prove that “solar energy can now compete against conventional energy sources in Germany without any financial subsidies.” BayWa Re says construction of the solar farm with a capacity of 8.8 megawatts will start in June and electricity sales will be based on a long-term PPA (purchase power agreement) with industrial partners. However, BayWa Re board member Matthias Taft says that while it is possible to operate some solar power projects without support, guaranteed remuneration through Germany’s Renewable Energy Act (EEG) will still be needed to keep the market moving forward in general.
Support payments for solar power under the EEG have fallen constantly over the past years and, according to research institute Fraunhofer ISE, solar has now become the country’s cheapest technology for power generation with costs between 3.71 and 11.54 eurocents per kilowatt hour (kWh). Utility EnBW in February announced to build Germany’s largest solar farm with a capacity of 175 MW and also operate it completely without support payments.