Germany's rooftop solar auction awards all offered capacity for first time since 2021

In June, Germany held its second auction round this year to support the construction of photovoltaic power plants on rooftops and noise barriers. The situation improved compared with the first round this year, with enough projects submitted to fill the auction. Even after several projects were excluded, enough bids remained for all the offered capacity to be awarded. This happened for the first time since the December 2021 auction.

Germany has struggled in recent auction rounds to attract enough projects for its auctions supporting the construction of solar power plants on rooftops and noise barriers. All three rounds last year, as well as the first auction this year, suffered from a shortage of projects, meaning that not all the capacity on offer was awarded.

One reason was rising project costs, driven by higher prices for materials and labour as well as rising interest rates. Power plant developers were also able to secure significantly higher prices last year through PPA contracts than the auctions could offer. However, in Germany the auctions currently guarantee developers a minimum sale price. If they subsequently sell their output on the market at a higher price, they do not have to pay back any revenue above the awarded price, unlike under two-sided contracts for difference (CfDs).