Little investor interest in solar auction dampens Germany's hopes for rapid buildout

Investors have shown only limited interest in Germany’s most recent call for solar installations on buildings and noise protection walls, further dampening hopes of speeding up the roll-out of renewables in the short term. The tender was “significantly undersubscribed”, with bids covering little more than a quarter of the capacity on offer, the country’s grid agency said. “Like in the previous auction round, this is because of the very high auction volume of 767 megawatts (MW). In 2021, only 300 MW were auctioned in total.” Investors offered only to build projects with a total 214 MW in 115 bids, a level similar to the previous auction. Another solar auction in late June was also heavily undersubscribed.

The agency accepted 106 bids totalling 201 MW, which offered to sell the electricity generated by their proposed installations for between 8.2 and 8.91 cents per kilowatt-hour (KWh). The average successful bid was 8.84 cents/KWh, an increase over the previous auction’s 8.53 cents/KWh. Germany will conduct its next auction for solar arrays on buildings and noise protection walls on 1 December, this time with a reduced capacity of 202 MW.

Auction volumes for solar and wind power installations had been increased in the context of Germany’s renewed push to reach its climate targets and make progress towards 100 percent renewable electricity by 2035, an aim that has only been strengthened by the need for greater energy independence following Russia’s attack on Ukraine. While wind power auctions have repeatedly been undersubscribed in recent years and only managed to fully auction off planned volumes in the past months, solar power auctions have so far usually been oversubscribed.