German solar industry ramps up

06/23/2023

Source: Federal Ministry of Economics and Climate Protection

For companies that want to establish or expand production capacities in the solar industry in Germany, the Federal Ministry for Economic Affairs and Climate Protection (BMWK) would like to launch a subsidy.

In the run-up to the planned subsidy, a so-called expression of interest procedure starts today as a first step: Companies that manufacture solar modules or key components required for this in Germany or extract, process or recycle raw materials required for this or plan to do so, can signal their interest in investment cost support for their project. The details will be published in the Federal Gazette this afternoon.

Federal Minister of Economics and Climate Protection Robert Habeck: "We need our own manufacturing capacities in Germany and Europe for key transformation technologies. This is not only a question of economic sense, but also a question of economic security. The EU's new state aid framework offers opportunities for this, and we want to take advantage of them. We are starting with photovoltaics and want to support our industry in establishing photovoltaic production in Germany on a permanent basis by providing financial support for lighthouse projects. This not only strengthens our technological sovereignty, but also our energy policy sovereignty."

In concrete terms, the BMWK wants to grant lighthouse projects, especially in structurally weak regions, subsidies under the so-called matching clause up to the amount that an equivalent investment project in a third country would demonstrably receive. This is intended to prevent distortions of competition to the detriment of Germany as a business location and to keep the country attractive as a location for PV producers."

More closely to the classification

In order to promote transformation technologies, the EU Commission significantly expanded the Temporary Crisis and Transition Framework (TCTF) in March and created new opportunities for state investment cost support for producers of PV systems and components as well. The BMWK intends to make use of this framework.

Prerequisites for the planned funding are, in perspective, proof of a concrete funding commitment from a third country outside the European Economic Area (EEA) for an equivalent investment, as well as co-financing from the federal state in which the corresponding project is planned. When evaluating the outlines, particular consideration is given to the planned production capacity as well as technological, climate and environmental standards. Possible funding must be notified individually to the European Commission as well as approved by it on a case-by-case basis.

The expression of interest procedure will run until August 15, 2023. The funding that is to follow the expression of interest is subject to the still ongoing state aid and appropriation law reviews and budget negotiations.

Promotion in the photovoltaic sector is to focus on a few lighthouse projects. In parallel, the BMWK also intends to support the development of production capacities in other areas such as wind turbines, electrolysers and large-scale heat pumps. To this end, a federal framework regulation is currently being drawn up to promote the establishment of production in all transformation technologies, which will also enable the states to set up their own supplementary subsidies.

The announcement of the expression of interest procedure can be found here .