Strong interest in German solar PV auctions persists, but prices stagnate

Germany has held the second round this year of auctions for ground-mounted solar power plants. The volume of projects submitted continues to significantly exceed the auction volume, which may be primarily due to investors’ efforts to secure returns on their projects. As installed solar PV capacity grows not only in Germany, electricity prices on spot markets often fall sharply around midday in summer. Awarded prices have once again remained virtually unchanged from the previous round.

In Germany, another round of dedicated auctions for ground-mounted solar power plants took place in early July. One more auction will be held before the end of the year. As in the first round, developers could bid for just over 2.1 GW of capacity. In the end, they submitted 495 bids for projects with a total installed capacity of 4.2 GW, roughly twice the volume sought.

“The volume of projects submitted was almost twice the auction volume. Strong competition led to low awarded prices and, consequently, low financing requirements,” said Klaus Müller, president of Germany’s Federal Network Agency (Bundesnetzagentur).

In the end, developers secured support in the auction for 268 projects with a total installed capacity of 2.15 GW. The awarded minimum guaranteed prices ranged from 45 to 52.4 EUR/MWh, with a weighted average of 50.5 EUR/MWh. Compared with the average of 51.1 EUR/MWh in the previous auction, this represents another slight decrease of around half a euro.

As usual, Bavaria accounted for the largest number of successful projects (700 MW), followed by the federal states of Schleswig-Holstein (244 MW) and Brandenburg (231 MW).

The auctions changed following legislative amendments

According to the regulator, some changes related to the so-called Solar Package I, the new legislation, were already evident in this auction. For example, the option of building solar power plants on lower-quality agricultural land was extended to all federal states. According to the regulator, such facilities accounted for a total of 1 GW, almost half of all capacity awarded in this round.

Other planned changes, such as raising the maximum installed capacity of individual plants to 50 MW or setting a separate maximum bid price for special installations, are still awaiting approval and have not yet been applied.